Hitachi Energy invests $250m to boost production of critical transformer components

Hitachi Energy announced at CERAWeek that it will make a significant additional investment of more than US$250 million by 2027 to increase global production of critical transformer components. This complements the recently announced US$6 billion investment across the company’s portfolio and addresses the growing shortage of transformers.

As the electrification of various industries, particularly the growth of data centres and artificial intelligence, drives unprecedented demand for electricity, the need for transformers has far exceeded initial forecasts. To keep pace with this trend, Hitachi Energy is intensifying its commitment to expanding production and strengthening supply chains in the US and around the world.

These investments will expand Hitachi Energy’s manufacturing capabilities in the US – at the company’s transformer facilities in Virginia, Missouri and Mississippi. This includes transformer components such as bushings and insulation components, as Hitachi Energy is a key supplier to other transformer manufacturers.

This important step will also help alleviate the ongoing transformer supply shortage on a broader scale, increasing production capacity and supply chain resilience. The global investment programme, currently one of the largest in the industry, will also strengthen Hitachi Energy’s manufacturing capabilities in Asia, South America and Europe.

Demand for transformers and grid infrastructure is growing at an unprecedented scale and pace. As the world’s largest transformer manufacturer, we have a responsibility to increase our production capacity and accelerate the delivery of this equipment and key components to help the industry scale up and deliver critical infrastructure projects faster, said Andreas Schierenbeck, CEO of Hitachi Energy

The transformer investments are part of a wider multi-billion dollar investment plan that Hitachi Energy is implementing across its manufacturing, engineering, digital, R&D and partnering businesses. These are being implemented in all major markets around the world to enable the company to deliver on its commitments to customers and meet demand. Hitachi Energy is also making improvements in supply chain management, digitalisation and automation to increase capacity and speed up product launches.

Transformers are key to the clean energy transition, enabling the efficient transmission and distribution of electricity. They are essential for integrating renewable energy sources, expanding interconnections, powering data centres, electrifying transport and facilitating the decarbonisation of energy systems.

Transformer insulation and components such as bushings, tap changers, insulation materials and components and other accessories are essential for the smooth operation of transformers. As the world’s largest manufacturer, Hitachi Energy has more than 60 factories and 30 service centres offering the world’s broadest portfolio of insulation and transformer components.

The investment just announced follows the $6 billion commitment announced for 2024, of which $1.5 billion will be used to increase global transformer production. This expansion is essential to meet growing demand and support long-term decarbonisation and electrification efforts.

All of the announced capacity investments will use sustainable and state-of-the-art manufacturing technologies to ensure operational efficiency while maintaining high safety and quality standards. They accelerate Hitachi Energy’s efforts to become a carbon-neutral company in its own operations by 2030 and are expected to support positive economic and social impacts on local communities wherever the company operates.