Dive Brief:
- Siemens Energy will spend $149.8 million to build a large power transformer factory in Charlotte, North Carolina, Gov. Roy Cooper announced Feb. 13.
- The site will be the company’s first power transformer manufacturing facility in the U.S. and will expand its Charlotte operations. The facility will also create 559 jobs in logistics, mechanics, assembly and other roles, with an average salary of over $80,000.
- Construction is expected to begin this year and production is anticipated to begin in early 2026, making 24 LPTs a year and later increasing to 57 annually once it’s at full capacity, Siemens Energy said in a Feb. 14 press release.
Dive Insight:
The new facility will help the shortage of large power transformers in the U.S., a critical source used to power the electric grid, the company said.
“The U.S. energy transition is in full swing, with $3.9 billion pledged to expand and update the U.S. grid within the next two years,” Siemens Energy board member Tim Holt said in a statement. “However renewable projects and grid expansion can only happen with the availability of transformers.”
In addition to producing transformers, the facility will also be able to repair and refurbish 12 transformers a year, with plans to increase to 24 at full capacity.
As the demand for renewable energy grows, the need to upgrade or replace aging power infrastructure grows along with it. In the U.S. alone, 2.1% of transformers are retired a year and over 70% of the power grid is over 25 years old, according to analyst firm PTR.
However, lead times for producing transformers range from 80 to 210 weeks, analyst firm Wood Mackenzie reported.
In January, the National Electrical Manufacturers Association and other trade groups sent a letter to Senate leaders pushing for the inclusion of $1.2 billion for transformer manufacturing in an energy appropriations bill. The legislation would help shore up transformer manufacturing.
“Our nation is facing a distribution transformer shortage and backlog of more than two years,” Debra Phillips, president and CEO of the National Electrical Manufacturers Association, said in a Jan. 4 statement. “This funding will help ensure that these and other critical grid components are more readily available so that community resilience is not jeopardized and the country’s energy transition does not stall.”
