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Siemens Power Transformer Investment May Have A Powerful Impact

Photo Courtesy Siemens Energy

Power transformers play a critical role in electricity generation, and when you don’t have enough of them, it’s a problem. That’s the case right now in the United States. According to Siemens Energy, the country is facing a national shortage of power transformers — so much so that the current supply can only meet one-fifth of the demand for large power transformers in the U.S.  

Siemens aims to help fix the program by investing $150 million to expand its operations in Charlotte, North Carolina.

In February, the energy technology company announced the selection of Charlotte for its advanced manufacturing facility to produce large power transformers.

According to a February press release, as part of the investment, the company will add to its existing operations by building its first energy transformer production factory in the U.S. The plant will deliver the “vital infrastructure” needed to continue the country’s energy transition. 

Photo Courtesy Siemens Energy

As Siemens noted in its release, power transformers provide the link between electricity generation and distribution. They are a “crucial part of distribution networks” by converting high-voltage electricity into lower voltages. The transformers are custom-built and about the size of a standard school bus. Siemens calls them “essential components in any grid expansion” by enabling the reliable transmission of electricity over long distances and helping stabilize electrical transmission across regions.

Power transformers are expected to play a significant role in the nation’s goal of cutting emissions by roughly half from 2005 levels by 2030. Siemens’ investment will address challenges related to lengthy transformer lead times, supply chain bottlenecks, and a lack of global power transformer production.

“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,” Tim Holt, Siemens executive board member, said in a press release.

“However, renewable projects and grid expansion can only happen with the availability of transformers.”

“The U.S. market today is mostly served by the Americas and Europe, but as global demand for this critical technology increases, we see the long-term potential to increase our U.S. footprint, building on our long-standing presence in North Carolina, where we’ve had operations since 1969,” he continued.

Photo Courtesy Siemens Energy

In an interview with the Energy News Network, John Gajda, a North Carolina State University professor and engineer, referred to power transformers as “big boxes of steel, iron, and mineral oil.” But those boxes are essential to the nation’s power grid.

“Transformers are the key technology that allow us to carry power over a distance,” Gajda said

As Energy News Network noted, transformers come in “all shapes and sizes,” from highly sophisticated models located at power plant switchyards to the small boxes you can put outside a home. Siemens will (obviously) build the former.

New transformers are needed because of aging infrastructure in the U.S., where power transformers are about 40 years old on average, according to U.S. Department of Energy data cited by Energy News Network. That’s the age when they start “brushing up” against their expiration dates. Some units still in operation are more than 70 years old, meaning they are at a high risk of failure.

Photo Courtesy Siemens Energy

North Carolina Gov. Roy Cooper, who has led efforts to boost the state’s clean energy economy, helped bring about the Siemens investment, along with a “host of government partners,” Energy News Network reported.

“Siemens Energy is bringing even more great energy manufacturing jobs to the Charlotte community, and this latest expansion demonstrates once again their confidence in our state and its outstanding workforce,” Cooper said in a statement. “Bringing production of these high voltage transformers onshore not only creates American jobs but makes our electric grid more resilient and ready for the transition to clean energy.”


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