The Device Throttling the World’s Electrified Future | A shortage of transformers is causing delays to power projects everywhere, holding trillion-dollar industries hostage—and that was before tariffs.

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1. Probably the key passage:

   > That’s particularly true in the US. Eva Gonzalez Isla, researcher for grids and utilities at BloombergNEF, says that transformer companies made investments in the early 2000s to expand manufacturing capacity in the US while anticipating a rise in electricity demand. Then came the financial crisis of 2008, after which electricity demand did not bounce back quickly. Many companies were unable to recover their investments.

   > Now those firms are seeing a rise in demand for transformers alongside the buildout of data centers for AI, but remain unsure if the trend will continue, says Gonzalez Isla. “Transformer companies aren’t going to open new plants only to shut it down after 10 years of business,” she says. 

2. Yup.

   And we’ve seen this coming for a decade. It’s been blatantly obvious that this is coming down the road.

   One of the things that I knock Biden for all the time.

   We tried to get transformer sourcing and supplies added to the IRA / NEVI, CHIPs, BBB, etc.

   Because you can’t build any of that stuff without transformers, but raw materials are constrained and US transformer companies are ridiculously risk adverse.

   Lots of people were asking Biden to pre-buy lots of the raw material to create a strategic material supply for them to enable fast build-outs, and also to include significant subsidies for expanding some transformer plants to ensure capacity.

   But nope. Didn’t make it into the bills.

3. The issues around large size transformers are that transformers are not one-size fits all as they are specifically ordered for each load supplied. New transformers have to be special ordered years in advance because of the critical manufacturing & testing processes. Add to that fact that existing transformers can be very old & have operated under higher loads & temperatures than designed for initially. These old transformers fail & there are no spares readily available. Politics don’t factor into the supply & demand chain. There are few manufacturers & they only have so much capacity. If a new transformer fails initial testing they have to start over.

4. Obviously higher energy prices allow for more control over citizens. Tarriffs help keep control while govt profits. Its how it all works people.

5. What companies are manufacturers for these kind of transformers?

6. The utter stupidity of this trade war never ceases to amaze me. The US will painfully realize that the modern economy is global and protectionist perspectives cannot thrive in it. I’m 22 years in power generation, I know that even with global supply chains and all the money in the world transformers are a scarce resource by the very nature that there is no one size fits all.

7. ComEd of Illinois delayed my new building being completed by several months because of a transformer shortage in 2023. It turns out that they had switched to a lower cost supplier in Brazil that was having problems keeping up with demand post-covid. They had burned bridges with their US supplier so they were unable to us them to filll the gap.

8. This is one issue I don’t hear enough about when it comes to all of the jobs and industry coming back to the US. Do we currently have the infrastructure to support it. And, if it needs to be built or rebuilt, who will pay for it?

9. You know I’m sure we’re all at least a little bit leery of industrial subsidies but I think especially for critical things like transformers or other grid-level electrical generation and transmission maybe it’d be better to build here and prop them up during the slow times. But that’s just me

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