How many years will it take to restore transformer supply in the United States after Trump returns?

The United States is facing an unprecedented supply-demand imbalance in power transformers, which makes the energy industry anxious and uncertain about the future stability of the grid.

To address this shortage, a new report from the National Infrastructure Advisory Council (NIAC) examines the current state of the power transformer shortage in the United States and makes several recommendations on how to overcome this obstacle.

The report—Addressing the Critical Shortage of Power Transformers, Ensure the Reliability of the U.S. Grid, notes that transformer manufacturing has experienced "significant" supply chain issues during the coronavirus pandemic, and the impact of these disruptions is intensifying. Power companies or generators may have to wait two to four years to deliver new transformers, compared to just a few months in 2020. In one extreme case, a large power transformer manufacturer in the United States revealed the waiting time for new transformer orders is up to five years.

A recent report released by the National Renewable Energy Laboratory (NREL) shows that something needs to change because electricity supply is so tight. NREL estimates that by 2050, the supply of distribution transformers may need to increase by 160% to 260% from 2021 levels to meet residential, commercial, industrial and transportation energy demand. NREL said demand growth was primarily driven by aging transformers and electrification.

The growing demand for transformers is driven by increasing global electrification, the growth of renewable power generation, and the growth of high-load customers such as data centers. The growing demand for transformers has also led to significant price increases that could have a knock-on effect on the cost of electricity for commercial and residential customers, the report said.

In the report, NIAC pointed out that in addition to demand growth, the domestic transformer manufacturing industry is also struggling to attract and retain qualified workers. In addition, due to the lack of standardization in transformer design, automation, assembly optimization plans and other large-scale production techniques have not made transformer production much more efficient.

"Despite rising demand, the industry's previous cyclicality has made manufacturers cautious about adding capacity. Although the recent transformer shortage is clearly more than a product of normal cycles," the report reads.

In its report, NIAC makes several recommendations aimed at closing the gap. It argues that increasing domestic production of transformers and key components is the best option from a national security perspective. Slightly riskier options include moving some production to Canada and Mexico, or moving production overseas and shipping it by merchant ship.

The report makes the following recommendations:

Establish federal policies and earmark funding for increasing domestic production capacity, such as tax credits, grants, accelerated depreciation, funding for new apprenticeship or training programs, and other incentives, modeled after the Creating Beneficial Incentives to Produce Semiconductors and Science Act;

Improve the accuracy of transformer demand forecasts by bringing together all parties driving demand to provide a more comprehensive outlook for the next 10 to 15 years;

Encourage long-term contracts/customer commitments between transformer suppliers and the industry sectors driving demand, and establish an enabling regulatory framework to support them;

Establish a strategic virtual reserve of transformers, with the U.S. government as the purchaser of last resort; 

Promote collaboration among design engineers from utilities, engineering firms, trade associations, and domestic and foreign manufacturers to standardize transformer designs, reduce the complexity associated with customization, and promote interoperability through standardized interfaces between transformers and other grid components;

Ensure adequate supply of electrical steel by coordinating domestic new supply incentives, government efficiency standards, and trade policies;

Increase the number of qualified workers by partnering with universities, community colleges, and vocational schools on training programs, while working with federal, state, and local governments to create tax incentives for workers entering the field.

At present, the transformer market has a great demand. ZTelec group is a professional manufacture of power distribution transformers, prefabricated substation, switchgear. Manufacture base located in Xuchang City, Henan Province China.

Our main products including :

* Transformer Iron core / Transformer windings

* Phase-shift rectifier transformer

* Dry type transformer

* Oil immersed transformer

* Box type Substation

* Pad-mounted Substation

* High voltage switchgear

* Low voltage switchgear

As a Chinese enterprise committed to the development of globalization, ZTelec group committed to promoting an open technology and partner ecosystem, and actively practicing the common values of meaning, inclusiveness and empowerment.

Our responsibility is to help customers create maximum value by providing highly reliable and appropriate products. Adhering to innovation based on customer needs, we accept challenges together with our customers.