The Global Transformer Shortage and Future of Power Infrastructure
The global supply of transformers has become increasingly constrained in recent years. According to Wood MacKenzie’s energy analytics, the waiting period for new transformers has expanded from 50 weeks in 2021 to approximately two years in the present day. Large power transformers (LPTs), which are essential for stepping up voltage from power stations to transmission lines, now have wait times extending up to four years. The cost of transformers has also risen substantially, with increases of 60-80% since 2020.
This shortage has led to adaptive strategies in the renewable energy sector. Some engineering firms have implemented proactive ordering systems, securing transformers years in advance of their projected need. Companies like Silicon Ranch in Nashville have established dedicated transformer pipelines to prevent supply chain disruptions from impacting their solar projects.
The impact of the transformer shortage extends globally. Wood MacKenzie reports that approximately 25% of worldwide renewable energy projects face potential delays due to transformer availability issues. In India, the waiting period for 220-kilovolt transformers has increased from 8 to 14 months, potentially affecting the development of nearly 150 gigawatts of new solar capacity.
The shortage affects multiple sectors beyond renewable energy, including utilities, residential construction, businesses, rail systems, and EV charging infrastructure. The impact has been severe enough to affect basic infrastructure development. For instance, Clallam County, Washington, implemented a moratorium on new home construction approvals in May 2022 due to insufficient pad-mounted transformers. The county resorted to using refurbished transformers, known as “ranch runners,” as a temporary solution, though these units typically have shorter operational lifespans than new equipment.
The transformer shortage has significant implications for both policy implementation and infrastructure security. The inability to quickly replace failed transformers, whether due to normal wear, weather damage, or other causes, increases the vulnerability of power systems to outages. This situation particularly threatens initiatives like the European Green Deal, which aims to dramatically expand Europe’s transmission network by 2030 to support increased electrification.
Technical Understanding of Transformers
Transformers, invented in the 1880s, operate on fundamental electromagnetic principles. Their core design consists of a two-sided iron or steel core wrapped with copper wire on each side. These wire wrappings, termed windings, transfer current through electromagnetic induction across the core. The voltage transformation is achieved by varying the number of wire wraps on each side of the core.
Transformers exist in various sizes to serve different purposes. LPTs, which can weigh as much as two blue whales, are used to step up electricity from power plants (typically thousands of volts) to transmission line voltages (hundreds of thousands of volts). Power substations use transformers to step down transmission voltages to tens of thousands of volts for local distribution. Smaller distribution transformers further reduce voltage to levels suitable for residential and commercial use.
The current crisis has catalyzed innovation in transformer design. Engineers are exploring new materials, enhancing longevity, incorporating power electronics for AC-DC conversion, and moving toward more standardized designs. One notable development is the concept of solid-state transformers, such as the modular controllable transformer (MCT).
The MCT, developed by researchers including those at the Georgia Tech Center for Distributed Energy, uses semiconductors and active electronic components to transform voltage levels and convert between AC and DC in a single stage. This design includes advanced insulation and protective measures against lightning strikes and power surges. The modular approach could potentially streamline manufacturing processes.
However, current semiconductor limitations present challenges. Today’s semiconductors can only handle loads up to approximately 1.7 kV, while grid applications require minimum tolerances of 13 kV. This necessitates stacking multiple transformer modules, which introduces complexity in ensuring synchronized operation and reliability across the entire system. At Oak Ridge National Laboratory’s Grid Research Integration and Deployment Center, or GRID-C, Madhu Chinthavali is also evaluating new technologies for next-gen transformers. Adding power electronics could enable transformers to manage power flow in ways that conventional ones cannot, which could in turn aid in adding more solar and wind power. It could also enable transformers to put information into action, such as instantaneously responding to an outage or failure on the grid. Such advanced transformers aren’t the right solution everywhere but using them in key places will help add more loads to the grid. Equipping them with smart devices that relay data would give grid operators better real-time information and increase overall grid resilience and durability, says Chinthavali, who directs GRID-C.
New kinds of power-electronic transformers, if they can be made affordable and reliable, would be a breakthrough for solar energy, says Silicon Ranch’s de Vries. They would simplify the chore of regulating the voltage going from solar plants to transmission lines. At present, operators must do that voltage regulation constantly because of the variable nature of the sun’s energy—and that task wears down inverters, capacitors, and other components.
Why Is There a Transformer Shortage? Driving the transformer shortage are market forces stemming from electricity demand and material supply chains. For example, nearly all transformer cores are made of grain-oriented electrical steel, or GOES—a material also used in electric motors and EV chargers. The expansion of those adjacent industries has intensified the demand for GOES and diverted much of the supply.
On top of this, transformer manufacturing generally slowed after a boom period about 20 years ago. Hitachi Energy, Siemens Energy, and Virginia Transformers have announced plans to scale up production with new facilities in Australia, China, Colombia, Finland, Germany, Mexico, the United States, and Vietnam. But those efforts won’t ease the logjam soon.
At the same time, the demand for transformers has skyrocketed over the last two years by as much as 70 percent for some U.S. manufacturers. Global demand for LPTs with voltages over 100 kV has grown more than 47 percent since 2020, and is expected to increase another 30 percent by 2030, according to research by Wilfried Breuer, managing director of German electrical equipment manufacturer Maschinenfabrik Reinhausen, in Regensburg. Aging grid infrastructure, new renewable-energy generation, expanding electrification, increased EV charging stations, and new data centers all contribute to the rising demand for these machines.
Compounding the problem is that a typical LPT doesn’t just roll off an assembly line. Each is a bespoke creation, says Bjorn Vaagensmith, a power-systems researcher at Idaho National Laboratory. In this low-volume industry, “a factory will make maybe 50 of these things a year,” he says.
The LPT’s design is dictated by the layout of the substation or power plant it serves, as well as the voltage needs and the orientation of the incoming and outgoing power lines. For example, the bushings, which are upward-extending arms that connect the transformer to power lines, must be built in a particular position to intercept the lines.
Such customization slows manufacturing and increases the difficulty of replacing a failed transformer. It’s also the reason why many energy companies don’t order LPTs ahead of time, says Laveyne at Ghent. “Imagine you get the transformer delivered but the permitting process ends up in a stall, or delay, or even a cancellation [of the project]. Then you’re stuck with a transformer you can’t really use.”
Less customized, more one-size-fits-all transformers could ease supply chain problems and reduce power outages. To that end, a team at GE Vernova Advanced Research (GEVAR) helped develop a “flexible LPT.” In 2021, the team began field-testing a 165-kV version at a substation operated by Cooperative Energy in Mississippi, where it remains active.
Ibrahima Ndiaye, a senior principal engineer at GEVAR who led the project, says the breakthrough was figuring out how to give a conventional transformer the capability to change its impedance (that is, its resistance to electricity flow) without changing any other feature in the transformer, including its voltage ratio.
Impedance and voltage ratio are both critical features of a transformer that ordinarily must be tailored to each use case. If you can tweak both factors independently, then you can modify the transformer for various uses. But altering the impedance without also changing the transformer’s voltage ratio initially seemed impossible, Ndiaye says.
The solution turned out to be surprisingly straightforward. The engineer added the same amount of windings to both sides of the transformer’s core, but in opposite directions, cancelling out the voltage increase and thereby allowing him to tweak one factor without automatically changing the other. “There is no [other] transformer in the world that has a capability of that today,” Ndiaye says.
The flexible LPT could work like a universal spare, filling in for LPTs that fail, and negating the need to keep a custom spare for every transformer, Ndiaye says. This in turn would reduce the demand for these types of transformers and crucial materials such as GOES. The flexible LPT also lets the grid operate reliably even when there are variable renewable resources, or large variable loads such as a bank of EV charging stations.