Idled West Virginia mill gets new life as a transformer plant

Cleveland-Cliffs, a US-based steel producer, announced that it will establish a new electrical distribution transformer production plant in Weirton, West Virginia at the site of an idled tinplate mill.

Cleveland-Cliffs says the investment will address the “critical shortage” of distribution transformers across the United States. The company will repurpose its Half Moon Warehouse in Weirton to commence production of three-phase distribution transformers used in electric power distribution systems.

The total capital investment is $150 million, of which $50 million will be granted by the state of West Virginia to Cleveland-Cliffs through a forgivable loan. Cleveland-Cliffs expects the new plant to come online in the first half of 2026. The investment will also result in reemployment opportunities for 600 USW-represented workers from the indefinitely idled Weirton tinplate mill, Cleveland-Cliffs said.

“Distribution transformers are critical to the maintenance and expansion of America’s electric grid. These transformers are in short supply, and that shortage stifles economic growth across the country,” Cleveland-Cliffs CEO Lourenco Goncalves said.

“The shortage will continue to be exacerbated by the widespread adoption of Artificial Intelligence in virtually all sectors of the economy, which will exponentially increase the consumption of electricity, in the United States and worldwide.”

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The efficiency standards for distribution transformers recently promulgated by the US Department of Energy support the long-term utilization of American-made Grain Oriented Electrical Steel (GOES), which Cleveland-Cliffs says ensures the viability of its investment in Weirton.

Weirton Steel Corp. was once one of the largest manufacturers of tin plate products, West Virginia MetroNews reported, but the company filed for bankruptcy in 2003. After several changes in ownership, the plant wound up in Cleveland-Cliffs’s hands in 2020, West Virginia MetroNews reported, but the company announced in February that it would shut down the plant, citing concerns over international trade.

The National Renewable Energy Laboratory (NREL) recently estimated distribution transformer supply may need to increase 160%–260% by 2050 compared to 2021 levels to meet residential, commercial, industrial, and transportation energy demands.

NREL says the demand increase is largely driven by aging transformers and electrification. NREL is also examining potential demand increases from extreme weather events and utility undergrounding and resilience programs that use various types of transformers.

NREL has completed the first phase of a study that quantified the number, capacity, age, and use of the nation’s current transformer stock — something it says has never been done before.

Most of the nation’s transformers are owned by over 3,000 distribution utilities across the country, which NREL said added some complexity to quantifying them.

Originally published by Sean Wolfe on power-grid.com