Electrical transformer manufacturing is throttling the electrified future
bloomberg.com
bloomberg.com
The build teams aren't that big - 30-50 people. The main barrier to entry is that it takes people who know how to hand-build big transformers. Utility buyers want a supplier who's going to be around half a century from now, since these things last that long.
Here's a summary of the market, from a transformer maker in China.[1]
Here's an AI-generated fake video of large transformer manufacturing. It's about half wrong.[2] But right enough to be worth watching. I'd like to see the prompts for this.
Virginia Transformer is the US's biggest maker of large transformers.[3] They advertise their "short lead times" of two years. The margins are low, and makers don't want to go idle between orders. This is a problem with much heavy machinery. It could be built faster, but when you catch up, everybody gets laid off and the factory sits idle. There goes your profit margin.
[1] https://energypowertransformer.com/2025-u-s-power-transforme...
Throwing more money at it does not work either, you need skilled workforse
Same is happening in EU with shipbuilding
That means that eventually the factory goes idle, when all the demand is serviced by the spares.
The problem expressed, I think, that it is not useful to scale up production quickly (or perhaps at all), because a factory catching up on all of their orders means that the factory goes idle. Idle factories can't afford to pay wages, so they lay off some or all of the workers -- and those folks go and find different jobs.
And when they leave, they take their institutional knowledge with them.
So the sustainable goal is to never be idle, and the way to accomplish this is to never catch up.
For an example of how idle factories can go sideways, look at the Polaroid film story: Polaroid closed. Everyone left. Some investors with a big dream eventually bought many of the physical assets that remained.
But owning some manufacturing equipment didn't help them much because the institutional knowledge of producing Polaroid film had already evaporated. They had to largely re-invent the process. (And they've done a great job of that, but it's still not the same film as the OG Polaroid was.)
---
So anyway, suppose the government steps in and simply artificially multiplies transformer orders x2, and pays them fairly for this doubled production. Since transformers are tangible things and we can't just spin up more AWS instances to cover demand, the immediate result is that the "short" lead time on new orders has increased from 2 years, to 4.
That's not seeming to be very ideal. It seems to amplify the problem instead of resolve it.
I suppose that the government could also offer safeguards that would help protect the businesses (including suppliers for parts) once they eventually catch up on orders, and that this might motivate them to scale production sooner instead of later (or never).
Which -- you know -- that isn't unprecedented. As an example: The Lima Army Tank Plant, in Lima, Ohio, is place where I've spent a fair bit of quality time. It still exists and continuously has employees largely because the institutional knowledge of how to build tanks (and a few other war machines) is considered to be too important to lose. During lulls, it mostly just sits there on its expansive site, loafing along repairing stuff that comes in, and waiting for the day when things to turn bad enough that we need to start increasing our number of tanks again.
It needs to keep operating (at any expense), and so with the magic of the government money-printing machine: It does. But it's one of the most actively depressing industrial sites I've ever been to; like the life just gets sucked right out of you before even getting past the entrance gate.
We can certainly extend that kind of thing to transformer production. But should we?
I mean: I've got some MREs in the pantry along with some other shelf-stable food, and I've got some water stored (primarily to fill empty space in the chest freezer for various practical reasons, but it exists). I keep some basic first aid and survival stuff in the car (bandages, space blankets, stuff to catch fish with, stuff to cook with). I've got my camping gear, including a small off-grid solar power system, stored in organized totes that can be loaded up very quickly. And I try to keep a minimum of a couple hundred miles worth of fuel in the gas tank at all times.
I do these things just in case. The bulkiest items see frequent use. None of this cost me very much to buy, or to maintain. And none of these things can replace the lifestyle I've come to expect, but they might be able to buy me some time.
Can we afford to have a spare copy of the hard-to-produce parts of the electrical grid sitting in a warehouse?
Would we even want to rebuild the grid in the same shape if the shit really hit the fan and we had to start it over from scratch?
But the knowledge is already being preserved. Unlike the singular army tank plant (which smells like a combination of despair and naphthalene), there are a plurality of transformer factories in the US...and they are always operating at 100%.
As long as that continues to be the case (there's no sign that it will change), then the expertise is actively being employed, refined, remembered, and transferred.
So even if we do nothing, we're good on that front.
We just aren't keeping up with present-day demand. (Hence, the article.)
But yet: The store shelves were empty while the janitorial and institutional supply chains had a surplus. We were incompetent at moving things from Pile A and putting them into Hole B.
So, sure: In the event of an unprecedented geomagnetic event destroying big chunks of the grid, we're hosed. I agree. And people will die. It will be awful. If I'm sure of one thing, I'm sure that we'll somehow manage to completely fuck this up.
So maybe we should focus less on stockpiling a bunch of ludicrously-expensive parts that we hope to never have a use for. Instead, maybe we should focus more on making the grid less reliant on centralization, and instead comprise it of smaller parts that that can be operated more-independently.
Both things are very expensive.
One of them is a reactive solution to a problem we've never had -- and that we hope to never have. The other is a proactive solution we can start using immediately, and also into the future.
(An ounce of prevention is worth a pound of cure, as they say.)
For that kind of sameness, it seems like it'd be easier to do nothing at all.
The IRA was a law passed by Congress. It set aside funds for grid upgrades, but did give some latitude to the President to deal with crises, because it was understood that Congress couldn't move quickly enough to deal with sudden supply issues. One thing that happened was the investments into grid upgrades created a demand shock, and transformer pricing and timelines surged upwards. So at that point the President invoked the DPA and used a chunk of IRA funding to try to unsnarl the transformer pipeline so the rest of the project could proceed. Then Trump (for basically arbitrary reasons) decided to screw it up. (He's also screwed it up in ways that probably just plain violate the law, but he doesn't care about that either -- which is why "run policy purely from the Legislative branch" doesn't fix any of this.)
Given the context -- a broad law duly passed by the slower legislative branch, a crisis dealt with (according to the law) by the more nimble Executive branch -- I am struggling to make your criticism sound reasonable, even with the absolute maximal dose of charity. This is basically the kind of governance that we want a functioning Legislative and Executive branch to engage in; it was screwed up on purpose; and your proposed solution/excuse does not produce better outcomes.
It's pretty straightforward...
> but did give some latitude to the President to deal with crises
All the President needs to do is say it's not a crisis. If you want it to stick past the current administration, pass a law after the crisis.
Anything that's at the discretion of the executive is at the desretion of the executive. I'm not saying it's great or smart but there's zero reason to be surprised and I'll not be surprised when a bunch of Trump's orders get reversed too.
But amplifying the orders just makes the problem worse.
Now that it's gone we're ultra dependent on a by-product of methane extraction and liquification for LNG transport. But most of the helium we extract as natural gas is not separated, as it just gets piped as gas. Helium is getting very very expensive.
https://commoncog.com/cash-flow-games/#3-pre-payments-in-the...
Liquidity is expensive. Selling a carrier one at a time is like a retail business where you're expected to hold onto stock. If you don't build up an inventory to sell from and just sell one unit, you have to markup the price to cover the cost of the factory when it is idle.
They have been:
https://www.energy.gov/oe/transformer-resilience-and-advance...
There’s plenty of economic solutions if companies are really that desperate. They can pay a premium to encourage more investment. They can invest themselves, or enter into partnerships, acquire their suppliers or even open their own facilities.
Companies often complain about shortages, but it usually comes with the caveat ‘at the price we’re willing to pay’
They replaced older versions that were NC winders.
So this "hand wound" story is just that.
Windings going into Oil Tank? I think you mean varnish tank... After the rotating assembly is balanced they go into a protective coating tank that is a varnish.
It's the usual cube-square scaling problem. Heat generation increases with the volume, while heat dissipation increases more slowly, with the surface area. For small animals, life is a struggle to keep warm. For large animals, life is a struggle to cool off.
>Here's an AI-generated fake video of large transformer manufacturing. It's about half wrong.[2] But right enough to be worth watching.
You probably got a lot from this video, because you know which half is wrong. I'd probably get negative knowledge from this video, because I don't.
This may be a new incarnation of the "curse of knowledge," where one over-estimates the value of AI slop if they already know the subject...
For comparison, here's the real deal - transformer winding at Virginia Transformer in the US.[1] That video provides a good sense of why these things take so long to make. All those wooden parts. All that slowly and carefully hand wound heavy wire. As they point out, if that wire can move at all, as the magnetic fields pushes and pulls on it, the vibration will, over time, wear out the transformer. It's a very fussy job to get the position and tension right, with wire firmly supported against movement in all directions. That's the difference between a lifetime of a few years and many decades.
It's a boring video.
Here's the whole manufacturing process at ETD in the Czech Republic.[2] This shows roughly the same sequence of steps as the fake video, but it's real. Big industrial bay with lots of transformers and overhead cranes. Sheets of lamination steel. Winding. The moving and shipping of the big transformer. All that is in both the real video and the AI slop. This is the real video from the manufacturer, and it assumes that if you're watching, you know what you're looking at. There's little narration.
It's a confusing video.
Here's a small open frame transformer.[3] If you've done much electrical or electronics work, you've seen one, and may have replaced or installed one. When you see the big ones being built, the process makes sense. Same concept, with a laminated core, windings, insulation, and lead wires. The big ones have the same key parts, just much bigger. But if you don't know a transformer from a transistor, the manufacturer videos are just wallpaper.
And there's the problem. The AI slop version will give the average viewer a general idea of the process. The accurate videos from manufacturers require more background knowledge to comprehend. The target audience is different. The manufacturers don't make those videos for the general public.
[1] https://www.youtube.com/watch?v=Bodj4f3L4RU
Dumb question: why can’t we mass manufacture smaller transformers and join them up?
If you’re really careful you could have parallel sets of series transformers feeding into a common feed.
At a much larger scale, that is exactly what the grid is, actually.
It just sucks dramatically from an operational perspective compared to having one correctly sized transformer.
Could you parallel two (or more) sets of three single-phase transformers into a single circuit on the secondary side assuming they were all identical and the conductors are all the same length? I assume it’s more economical to just have one three-phase transformer for instrumentation/control and switching reasons, just wondering on a theoretical level.
To an extent, you can do this, as long as you have systems in place to shed load and prevent the components from failing in quick succession by circuit breaking.
Also i believe transformers are much more graceful handling overcurrent than silicon. But everything has its limits.
And yes, you could parallel sets of even series transformers together. It will work fine, until something happens and then it doesn’t (or explodes). Making that not happen is relatively non trivial and is a lot of why keeping a working power grid working is non trivial and a lot of work.
At larger scales, when this goes wrong it can cause grid blackouts. Smaller scales, fires.
Since a single transformer rated for the load it will carry is pretty simple and ‘just works’ in almost all scenarios, it’s more economical just using a single one when you can.
No sane way to do that with two different power plants on opposite sides of the state, of course.
It’s the same kind of problem.
(And notably, it’s not that it’s actually completely impossible to do it that way - just impractical compared to the alternative. You could actually make something that kind of sorta worked for an aircraft carrier by joining tens of thousands of small pontoons and support ships. Operationally, it would just suck compared to the alternative.)
In fiction: "Tom Swift and his Ocean Airport" (1934) [1] In reality, a floating pontoon airport, with over 10,000 pontoons, was built during WWII, as "Project Sock".[2] It worked OK in a protected bay. Once large planes could cross the Atlantic, and small carriers with small planes were built for convoy protection, there was no military need. Floating airports have been tried a few times since, but it's never been worth the trouble.
Prefabricated pontoons were a big thing in WWII. Used for bridges, barges, docks, etc. Useful when you really need a temporary structure in a hurry, and aren't too concerned about its long term lifespan.
Putting multiple transformers in series is quite possible, but it's rarely done because it's less efficient than a larger transformer and takes up more space.
[1] https://www.tomswift.info/homepage/oceanair.html
[2] https://www.usni.org/magazines/naval-history-magazine/2024/f...
I'd like some sort of shared blocklist support for YouTube and Instagram. I'm sick and tired of content thieves and AI slop farms.
> At the end of the 19th century, when electricity was just starting to become a commercial source of energy, two businessmen fought to control its future in what came to be known as “the war of the currents.” Thomas Edison promoted the use of direct current (DC) and George Westinghouse, inventor and industrialist, was convinced that alternating current (AC) would prove more practical.
> In a clash of personality, finance and some genuine technical advantages, Westinghouse won out and the world has been mostly stuck with using AC as a means of generating and transmitting electricity. Transformers are necessary to make the AC system work.
This entire section is a glaring load of nonsense and needs to be removed. We had to start with AC for a variety of technical reasons, the main one being that boosting DC voltage pre-switching technology was impossible. DC cant pass through a transformer unless it is converted to some form of AC, usually in the form of PWM square waves these days. Before the invention of the mercury arc rectifier (And later valve) in 1902 you had boost DC using mechanical methods: generators. The problem there is physical, they did not have the ability to insulate the generator windings at high voltage potentials. They also had problems with DC voltages over 2000 volts on commutators [1] citing excessive arcing. Commutators are also a limiting factor in machine size as beyond several MW they dissipate too much power. So with all this the highest practical voltage for a DC grid using early electrical machinery is around 2 kV. Now imagine all that mechanical complexity on the distribution end. Meanwhile, early AC transmission was already in the tens of kilovolts: 11/22/33 kV (multiples of the early Edison 110 volt standard.)
As for the whole war of currents, I feel it is vastly overstated and was more a public spectacle than serious scientific dispute. It was already known from early on that AC was the future thanks to its ability to easily be transformed to higher voltages for transmission and back again with no moving parts. The "war" was likely Edison marketing to sell off the remaining inventory less desirable DC machinery.
What is a current (pun!) practical limit?
If a 100MW PV farm and a data center are separated by 1km (20 Olympic pools) - is there a way to avoid AC?
I know there are future solutions [1]
[1] https://techcrunch.com/2025/04/07/former-tesla-exec-drew-bag...
The rules are changing because of switchmode voltage conversion, using transistors to switch the voltage at a high frequency, where the magnetics (transformers, inductors) can be much smaller and more efficient, then converting back to DC. This is how virtually all smaller power supplies have been made for years, the only question (which I don't know) being how far along we are at reaching the voltage levels of long distance transmission in this way.
I'd think that hustling us towards DC with electronic voltage conversion would be a reasonable strategic goal for dealing with the transformer problem, worthy of support by a government.
However, DC does not make sense for a radial power distribution network. The article is propagating nonsense.
Why not? Pure geeky curiosity.
Point to point is just two nodes, but scaling that outward would be very expensive
AC transmission is relatively cheap in comparison
Radial DC is anachronistic thinking based on misunderstandings perpetuated by C-suite level just so stories like this Bloomberg nonsense.
Consider also that there is nothing existing in transmission and switching gear certified for HVDC it being rare one-off projects so far, while AC is ubiquitious, more-or-less mass-produced and many people are trained in its maintenance.
Not in any economical sort of way. A rectifier and two transformers is cheaper than directly switching HVDC. If you step up the voltage to 115kV, a 100MW three-phase AC circuit is only 500 amps.
Remember that the product has a typical lifetime measured in decades, there are huge numbers of large power transformers that have been in near continuous operation for over half a century. When one of those fails it is often more economical to repair it than replace it with a new one but that depends on there being institutions that understand what was done fifty years ago. All this requires the opposite of modern move fast and break things investing.
Capitalism is a fire - if you tend it well and regulate it, it serves a useful function. Let it burn out of control and it will consume everything.
Part of that is because most of the world's power grids are extremely dumb. There's no visibility anywhere, certainly not in real time - if you're lucky, there is some sort of alert monitor for overtemperature in local transformers, but no voltage/current monitoring on an individual consumer level and no current monitoring on both sides of a transformer.
Imagine a small pole transformer plus secondary-side distribution lines rated and fused for 100 kVA. Enough for a few farms. Now farm A and B each install an 80 kVAp solar panel set - and farm C, D and E consume 50 kVA each. Without the decentralized solar, the pole transformer fuse would have been triggered - but now, there's 150 kVA of consumption going on, fed by the 160 kVA solar panels, on a distribution line only supporting 100 kVA, that's now acting as a fuse. An immediate risk of damage, if not outright fire.
That is why large scale solar/wind or large consumers all need permits, plannings and sometimes dedicated lines and transformers.
The only other way to run a system without creating tons of new infra but still able to catch such dangerous situations is a detailed (!) network map on the utility side plus realtime monitoring of the transformer and all five farms input/output currents.
Sure you can. To everyone you run power lines to. Or did you mean you wanted a distribution system designed to profit you instead operate efficiently for everyone else?
While the actual economics of it may have been kneecapped, selling solar power back to the grid is very much a thing in 33 states. It's in the form of a credit and not cash. I'm not trying to nitpick, but I'm not sure what you're getting at.
Meaningful grid security means these items need rapid, standardized, domestic production capacity and cold spares distributed offsite and ready to be deployed should anything happen to ones in use. These are critical items that must not be neglected to reactive actions disaster recovery.
https://en.wikipedia.org/wiki/Metcalf_sniper_attack
https://en.wikipedia.org/wiki/Moore_County_substation_attack
https://en.wikipedia.org/wiki/Electrical_grid_security_in_th...
Which have days worth of backup generator power
> refrigerated food distribution
Do you think refrigerated trucks trail big long extension leads to a socket somewhere?
"Oh but we never get power cuts here!"
Yeah. Try living in a part of the world where 140mph winds for four weeks just just Normal January Weather.
"But if I got power cuts for more than a few hours I'd complain to the provider!"
Yeah. That sure is going to help rebuild 30 miles of blown-over 275kV power line that runs through some of the most inaccessible country even if it's not storm-force winds that prevent access by boat and fallen trees that prevent access by land. Complain all you like, but doing beats talking.
It's expensive these days but it's something I do across a few hundred sites about once or twice a year.
The water system shuts down because the tanks aren't reserve supply they're pressure support.
And solar plus storage will keep you running for maybe a week if you're conservative and mostly don't use anything...which doesn't help you if it's months till replacement.
But yes, unless you spend serious money (own sewer, water from underground etc), it's basically solution for "the power pole is down", not any grid wide problems.
You'd be better off with an air sourced hear pump for hot water anyway - the one in my house uses less power then my dehumidifier.
It is often the case (at least where I live) that having a septic system and well is far more economical than obtaining a property with access to city utilities.
They're off grid, and can be swapped out if the PV panels or immersion pumps fail.
Ideally you should be pumping into tanks in any case, for the buffer, and those tanks can be placed on a hill to gravity feed .. or pump with a motor.
Here's a typical setup, sans old windmill: https://youtu.be/iZAMm_S3GNQ?t=383
(same rough area (W.Australian wheatbelt) not our land)
Maybe the grid needs a multi-source agreement for equipment like the network industry has for optics.
DC switches (as in, just a power switch) are vastly more expensive because while in AC you have 100 breaks in current a second, DC is constant so it is far harder to break. So even if you had device that could use both (not hard with SMPS, they have rectification as first step), it's still essentially " replace everything".
I challenge you to name one that cannot and that also makes it into high school curricula or How Things Work.
https://mst3k.fandom.com/wiki/A_Case_of_Spring_Fever_(short)
https://m.youtube.com/watch?v=vzKfAFsbRSk
If you are not ready to lock yourself in a bunker after reading the article and watching that short, I strongly suggest you consider the inclined plane.
You’d better do it now. Very few locks work in the absence of transformers, springs and inclined planes.
E.g., https://lindahongli.en.made-in-china.com/product/SAapQolWVUY...
That's in the ballpark of the Heathrow transformer that blew, I think.
I understand they will be not cheap, with tariffs and all, but nothing the Magnificent 7 or Heathrow could not afford.
It seems to me that (as the article points out) that production facilities are pretty old and production COULD be much more automated, and products improved if there was a will.
However, "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."
And THAT seems to be the crucial difference here between the transformer industry and, say, NVIDIA.
https://evernewtransformer.com/pt/how-to-purchase-power-tran...
If I were to desperately need a power transformer, I'd consider going down this route in parallel to waiting for years for a "blessed" one.
What China does have is a very high carbon emission intensity of electricity generation thanks to over half capacity coming from coal.
This isn't quite wrong but the motivation is backwards: AC is necessary to make transformers work.
1. All grids need to move energy at high voltage and low current to minimize losses.
2. This requires a mechanism to step voltages up and down for transmission.
3. In 1890 the only such mechanism was the transformer.
4. Transformers only work on AC, not DC.
Hence our legacy grid is AC.
Nowadays we have an additional mechanism: Power electronics. Power electronics work on both AC and DC, so transformers with their huge requirements for copper and steel are no longer necessary.
We need to accelerate the transition of our grid to DC because DC grids are simpler and cheaper than AC grids.
smelting some copper and steel and wounding it up is far, far, far, far cheaper than replacing it with power silicon(which might be smaller, but overall needs tons more of energy to produce)
It will be also less reliable. Transformers deal with any overload far better and routinely run for like 50+ years
Think of it as analogous to USB-C power, on the megawatt/gigawatt scale. ;-)
But even fairly small standard specification distribution transformers are custom designs or very short runs. It's not economical to make the same design year after year because the relative prices of copper and core steel vary over time. A design made last year can be uneconomical to make this year because last year copper was relatively cheap so the designer used a lighter core and more copper to achieve the required efficiency. But if this year the copper price has gone up while the core steel price has gone down it would cost more to make the same design while the same specification could be achieved for a lower material cost by making a new design.
The new design is not a new type and for distribution transformers the effort required to design it is of the order of a man hour or two, far less than the difference in material costs.
For very large transformers (megavolt HVDC for instance) the situation is somewhat different and the design can take a very long time. But the opportunities for standardisation are relatively small because the quantity of units in the market is small and the manufacturers and regulators are always chasing ever greater efficiencies.
A far as specifications go there is already quite a lot of standardisation. But standards evolve over time and transformers can last for over half a century so you inevitably end up with a mixture of device types
Also, if one of your paralleled large power transformers fails you can't just buy an off the shelf replacement because no one keeps a stock of items that cost a million dollars each.
Switching to USB-C was trivial because most of the devices involved are essentially consumables with lifetimes measured in handfuls of years ad often much less so the old stuff withers away rapidly. That is not the case with large capital projects such as national electrical networks
Keeping a stock of million dollar items in case one fails once in fifty years is pretty poor use of capital. By the time you get to use it the standards will have changed. And how many different transformers will you keep in stock> You can't reasonably use 500 MVA transformers everywhere, some places only need a 250 MVA unit and might not have space for anything larger. Which voltages will you choose and what will you do with your 500 kV transformer when the backbone gets upgraded to 650 kV or 750 kV or 1 MV?
Do you think that the people who run electricity distribution systems don't think of these things?
Or is this a case of blind greedy investment outcompeting civilian life once again? Probably given that Bloomberg feels the need to throw it's voice for the cause.
But whenever it’s AI data centers being discussed, they’re not talked about as a tax, but that they don’t have enough power.
As if the former is a detriment to humanity and the latter is a benefit that deserves more resources, when the opposite is extremely true.
“Hello! I like money!” - Mr. Krabs
Or perhaps there’s even some Malthusianism at play?
Transformers are made in specialized factories and use specialized components made in even more specialized factories. Expanding production requires not just immediate demand but commitment to future demand because a factory is a very expensive thing. The big thing is that increased demand often involves a demand that won't continue for a long period of time.
You could see the same thing with both masks and vaccines during covid - ramping up ten factories to meet a temporary demand would be very expensive.
This is a problem in strategic reserve territory.