Explainer · Energy

The transformer shortage sets the pace of building

Updated October 21, 2026 · Numbers as published by each source on the date shown

Large power transformers now take two to three years or more to arrive in the United States, up from about a year in 2020 and 2021. Demand from new power plants, factories, data centers and grid replacements grew faster than factories could. Makers are adding capacity. Nearly $1.8 billion in new transformer production for North America has been announced since 2023, and several new US plants are under way.

What a transformer does

A transformer raises or lowers the voltage of electricity. Power plants use generator step-up transformers to send their power onto high-voltage lines. Substations, and smaller transformers on poles and pads, step the voltage back down for homes and businesses. When transformers arrive late, the projects that need them wait. Long lead times have led to project delays and cancellations, Wood Mackenzie reports.

How long the wait is now

In the second quarter of 2025, power transformers took an average of 128 weeks from order to delivery, and generator step-up transformers 143 weeks, according to Wood Mackenzie's September 2025 study for American Clean Power. By the first quarter of 2026, step-up transformer waits had passed 160 weeks, Wood Mackenzie analyst Ben Boucher told Reuters.

Utilities feel it directly. Roseville Electric Utility in California used to order equipment about a year before a project. With large substation transformers now past a three-year wait, it buys equipment for projects it knows are coming five years in advance, its chief executive, Dan Beans, told Reuters.

Why demand jumped

Wood Mackenzie points to several drivers.

• More electricity use. US demand rose an estimated 7% from 2019 to 2024, after falling 1% from 2010 to 2020.
• An aging grid. A Department of Energy study found that 55% of in-service distribution transformers, about 40 million units, are more than 33 years old.
• Storm damage. US weather events costing a billion dollars or more rose from 8 in 2014 to 27 in 2024.
• New power plants and factories. Demand for generator step-up transformers rose 274% from 2019 to 2025, and for power transformers 116%. Manufacturing construction spending rose 96% over three years.
• Data centers. US data center capacity is set to reach 110 gigawatts in 2030, up from about 24 gigawatts in mid-2026, according to Wood Mackenzie analysis reported by Reuters.

Why supply takes time to grow

Makers cite shortages of raw materials and skilled technical workers as limits on expanding, Wood Mackenzie reports. Copper wire for the windings has been a bottleneck, and prices for the special electrical steel inside rose by up to 20% over a couple of months in 2025.

How builders are working around it

• Ordering years ahead. Utilities and developers lock in production slots early, sometimes paying up front for an earlier date.
• Refurbishing. Older transformers are repaired and kept in service longer.
• More suppliers. Developers buy from several makers in different places and sign long-term supply agreements.
• Customers sharing the cost. Some utilities ask customers to pay in advance for long-lead equipment.

Reuters reported each of these steps in July 2026.

The new factories coming online

• Hitachi Energy, South Boston, Virginia. Construction began June 29, 2026 on a $457 million plant that the company says will be the nation's largest for large power transformers, with about 825 jobs. It is part of more than $1 billion Hitachi Energy is investing in US grid equipment.
• Siemens Energy, North Carolina. A $421 million expansion across the state, announced February 3, 2026, includes a larger large power transformer factory in Charlotte and 500 jobs statewide.
• Eaton, Jonesville, South Carolina. A $340 million plant for three-phase transformers, Eaton's third in the US, with production and hiring expected to begin in 2027 and 700 jobs.

The shortage is expected to ease. Wood Mackenzie projects the shortfall of generator step-up transformers to narrow from more than 700 units in 2025 to about 140 by 2030, as new factory capacity comes online and demand from new power plants levels off.

The Monday Haul tracks new factories and grid projects every week. Past issues are in the archive, and you can follow energy in every state on the live dashboard.

What to watch next

• Lead times. Wood Mackenzie publishes lead time surveys. Falling waits for power and step-up transformers would show new capacity arriving.
• Factory start dates. Eaton's Jonesville plant is due to begin production in 2027.
• Hiring. Each new plant plans hundreds of jobs, and makers cite skilled labor as a limit on expanding.

Common questions

Sources

• Making the connection: meeting the electric T&D supply chain challenge, executive summary, Wood Mackenzie with American Clean Power, September 2025. Lead times, demand growth, supply limits, investment, outlook to 2030.
• US power companies scramble to secure equipment as surging data center demand strains supplies, Kavya Balaraman, Reuters via Yahoo Finance, Jul 9, 2026. Lead times in 2026, Roseville Electric, workarounds, data center capacity.
• Hitachi Energy breaks ground on the nation's largest facility for the production of large power transformers, Hitachi Energy, Jun 29, 2026.
• Siemens Energy will expand operations in Mecklenburg County, Mecklenburg County, Feb 3, 2026; and Siemens Energy is investing $1 billion in the United States, Siemens Energy, Feb 3, 2026.
• Eaton invests in new South Carolina transformer manufacturing site, Eaton, Feb 12, 2025.