Image courtesy Hitachi Energy
Hitachi Energy has announced an investment of more than $1 billion to expand its manufacturing capacity of critical electrical grid infrastructure in the US.
These investments, among the largest seen in the electrical industry in the US, include approximately $457 million for a new large power transformer facility in South Boston, Virginia, along with significant expansions of existing facilities throughout the country.
Commenting in a release was Chris Wright, US energy secretary: “If we are going to win the AI race, reindustrialise, and keep the lights on, America is going to need a lot more reliable energy.”
Central to the investment plan is the establishment of the facility in Virginia, which Hitachi Energy says will be a state-of-the-art manufacturing facility, used to produce large power transformers that will support applications like high-voltage transmission, power generation, AI data centres, and large-scale industrial applications.
This facility will be built alongside Hitachi Energy’s existing campus and will be the largest manufacturing site for large power transformers in the US.
AI demand and transformer shortages
Switzerland-based Hitachi Energy, in a release, says the investments will help meet skyrocketing energy demand driven by AI data centres, a key strategy for Trump’s White House, whose Action Plan looks to bring data centres online in droves while optimising the grid for their energy consumption.
To do so, the US is looking to promote domestic access to critical grid technologies, such as transformers, of which the US has been experiencing a severe shortage.
According to an August report from Wood Mackenzie, US supply shortages for power and distribution transformer is expected to hit 30% and 10%, respectively, in 2025. Since 2019, Wood Mackenzie estimates that US power and distribution transformers have seen demand surge by 116% and 41%, respectively.
This has been due to a confluence of new demand drivers, including a rise in electricity consumption, which has increased 7% since 2020, reversing a 1% decline from 2010 to 2020, the growing pipeline for clean energy projects, and ageing infrastructure, Wood Mackenzie notes.
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Said Toshiaki Tokunaga, president & CEO of Hitachi: “The United States is a key market for Hitachi, and this investment reflects our commitment to powering America’s energy future to meet the accelerating demands for reliable and sustainable solutions to benefit the nation.
“Leveraging our expertise in IT, operational technology, and advanced products, we are supporting American manufacturing, the development of critical infrastructure, and the rapid expansion of data centres driven by AI adoption.”
Added Andreas Schierenbeck, CEO of Hitachi Energy: “Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race.
“Bringing production of large power transformers to the US is critical to building a strong domestic supply chain for the US economy and reducing production bottlenecks, which is essential as demand for these transformers across the economy is surging.”
These projects are part of a more than $9 billion global investment programme, under which Hitachi Energy is expanding its manufacturing capacity, R&D, engineering, and partnerships.
