Across the US, new houses sit unfinished – construction can’t be completed until they are connected to the electricity grid. Utility companies worry about how quickly they can restore power after damage caused by hurricanes and other natural disasters. And nationwide efforts to modernise ageing electrical grids face delays of months or even years.
All this is happening because of a national shortage of electrical distribution transformers. These devices convert the high-voltage electricity from power lines into lower voltages suitable for homes and businesses, and, thanks to soaring demand from housing construction and electrical grid upgrades, they are much harder to come by.
The shortage could hamper communities’ ability to recover from natural disasters – a threat that looms ever larger as climate change causes more severe and frequent extreme weather events – and could derail the nation’s decarbonisation plans.
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Demand for transformers started surging around six years ago, owing to new housing projects, decarbonisation efforts tied to renewable power and electric vehicles, grid modernisation programs and extreme weather impacts on grids. “The demand shift probably started as early as 2017 and pushed the industry to full capacity in that 2020 timeframe,” says , CEO of ERMCO, a transformer manufacturer based in Tennessee. “And then the backlogs just started to grow and grow and grow, and now we have gotten to this point where we can’t get production out fast enough.”
Transformer manufacturers were not able to keep up with the heightened demand. This is in part because of shortages in skilled workers and global competition for a limited supply of grain-oriented electrical steel – a specialty steel with magnetic properties useful in transformers. The US has only one domestic producer of such steel.
Today, the average time for obtaining new transformers in the US has grown from about two months prior to 2021 to 12 months in 2022, according to a of public power utilities.
Already, the shortage has forced 20 per cent of utility companies to either delay or cancel electrical grid projects. in constructing new houses and apartments because of wait times for connecting with local electrical grids. “If we can’t electrify the area, how can we build out and grow that area?” says Cory Marshall at the American Public Power Association, a non-profit organisation based in Virginia that represents community-owned utilities.
Some developers are buying whatever distribution transformers they can get their hands on, even if they are not the ideal size, says at Power Engineers, a consulting engineering firm headquartered in Idaho. “In locations where some developer wants to come in and put down a couple 100-lot subdivisions, they don’t necessarily have the transformers to go out and facilitate that,” says Hennessey.
An especially troubling fallout of the crisis is the declining stockpiles of transformers used to replace those damaged by storms and other events, which will make it harder to restore power in communities hit by natural disasters. Domestic production is already running at maximum capacity.
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The 2022 hurricane season marked the first time that the American Public Power Association heard its members – community-owned utilities – warn that they might not be able to help each other recover from storms because of depleted transformer stockpiles. “There was a lot of concern about what will happen if a back-to-back storm happens,” says Marshall.
The need for transformers is only expected to go up as climate change causes more extreme weather events like hurricanes and wildfires.
Meanwhile, US government programs aimed at reducing carbon emissions to stop climate change are themselves adding to transformer demand. A from 2020 found that US electricity transmission systems may need to expand by 60 per cent by 2030 – and possibly triple current capacity by 2050 – to handle the increasing electrification of home heating and cooking systems, along with supporting more electric vehicles and accommodating new renewable power sources. This will require both more distribution transformers and more railcar-size power transformers sitting inside power substations, with the latter also being in short supply for US buyers.
“You’re going to need a lot more transformers to do that,” says , a transmission policy analyst at the Niskanen Center, an environmental think tank based in Washington DC. “If you’re already looking at a current shortage, that’s maybe a big barrier to improving the grid and getting to those decarbonisation targets.”
There is also the ongoing need to replace old transformers in ageing electrical grids, says , director of the Center for Electromechanics at the University of Texas at Austin. About 70 per cent of US electrical transmission infrastructure is already more than 25 years old. “Somewhere between 25 and 50 years, transformers are going to fail,” says Hebner.
The US Department of Energy has proposed tackling the transformer shortage with a new that would favour using amorphous steel in transformers. Amorphous steel is thinner than grain-oriented electrical steel and experiences lower loss of electrical power when used in transformers. There is currently also just one US producer of amorphous steel – but the Department of Energy says its proposal would help to encourage domestic steel production in this area in the long run without exacerbating short-term supply disruptions. The proposed rule is not actually slated to come into effect until 2027.
But a coalition of home builders, utilities and grid component manufacturers say the rule could actually in exchange for achieving a “mere tenth of a percentage point” improvement in transformer efficiency. The coalition also said the rule “would require manufacturers to transition to a different type of steel, which is largely untested, less flexible and more expensive”.
At the transformer manufacturer ERMCO, Mills believes that US suppliers and manufacturers can eventually figure out a solution to the transformer shortage. ERMCO is already in talks with US utility companies to try agreeing on more standardised transformer designs that would make it easier to scale up production. But he also warned that “it’s a problem, particularly in the short term, that may be in conflict with some of the other goals and objectives that our nation might have relative to carbon reduction” – meaning that American dreams of new homes and electric cars may need to temporarily hit the brakes.
