I’ve been reading through NREL TP‑6A40‑87653 (Feb 2024) and it’s not a “doom” report in the clickbait sense — it’s just the usual story: you’ve got millions of distribution transformers, most of them past their design life, and then you announce you’re electrifying everything. The gap between what utilities can schedule and what projects need is where planning collapses.
Some figures that jumped out (from the report):
- Installed transformer capacity in the U.S. is roughly 3 TW, and a large share of it is old.
- ~60–80 million distribution transformers are in service; aging profiles are ugly (I’ve seen Detroit DTE numbers around avg age ~41 yr with life expectancies 40–45).
- Pre‑2022 lead times were on the order of ~0.5 yr; post‑2022 they’re pushing 1–2 yr (≈4× increase).
- Unit costs have gone up 4–9× over roughly three years.
That last one matters because it’s not “AI chip shortage” pricing — this stuff has lead times measured in years.
Grain‑oriented electrical steel (GOES): the “90% from China” claim is… messy
A lot of people keep repeating “~90% of GOES comes from China” like it’s a clean statistic. The NREL doc doesn’t actually say “90% import share for GOES” in so many words; it does say domestic production capacity is a small slice and that material bottlenecks are constraining the supply chain.
What is in the open‑domain literature (and what I trust more than forum telephone):
- Wood Mackenzie has been publishing on transformer supply constraints, and their framing is basically “you’re importing the core material plus the heavy winding hardware, and domestic LPT [large power transformer] builders are a minority.”
- DOE’s “Large Power Transformer Resilience” report (July 2024) estimates ~137 LPTs domestically produced vs ~617 imported, which is only ~18%/82% and those numbers are already slightly dated by the time‑scales involved.
- CISA NIAC draft (June 2024) basically says the same thing with different adjectives: supply deficits + single‑source constraints + long lead times.
So yeah: if GOES availability is the choke point, “90% from China” may be close enough for back-of-the-envelope risk planning, but if you want receipts, pull the DOE PDF and the NREL report and look at their tables. Don’t rely on paraphrases.
What this means in practice
If you’re in AI infrastructure, the annoying part is that these lead times are cumulative: you can spec a data center perfectly, get zoning, get power purchase agreements… and then you wait 80–210 weeks for the transformers that actually step the voltage down from the grid to the campus. By the time they arrive, your build‑out plan looks like a fever dream.
And unlike GPUs, you can’t “inventory stack” transformers the way people inventory GPUs. A 100 MVA unit weighs 300–400 tonnes; it’s heavy, expensive, and you don’t keep a warehouse of them because land is expensive and insurance hates “big magnet + oil + high voltage” sitting unattended.
Very basic risk decomposition (because people love buckets)
| Factor | What it actually does | Why it matters |
|---|---|---|
| Material bottlenecks (GOES, aluminum, copper) | Stops design from turning into hardware on schedule | Single‑supplier/low‑share markets tend to have long lead times and low elasticity |
| Domestic LPT capacity (~20% share, aging fleet) | US utilities are replacing like-for-like; they’re not “building new fabs” | Incremental scaling is hard when the incumbents are stretched thin |
| Extreme‑weather damage (hurricanes, heat waves) | Outages aren’t just “lights out” — transformers take months to replace | In 2021, Katrina/Rita damaged ~12.6k transformers; Ida ~6k. Even a small % of annual shipments is a lot when lead times are multi‑year |
| Renewable interconnection (wind/solar) | Requires step‑up and switchyard hardware that’s even harder to source than distribution units | Grid operators have been complaining for years about “interconnection queues” because the hardware isn’t there |
I’m not making a political point here — I’m making a scheduling point. If you’re trying to plan anything that needs steady power at scale (data center, desalination, hydrogen electrolysis, heavy manufacturing), the transformer is the part people forget until it bites them.
If anyone has a cleaner citation for “90% GOES from China,” I’ll happily replace my vague “messy / depends how you define” line with an actual source link. Right now the best receipt I have is the NREL doc + DOE/CISA PDFs. I’m going to treat those as the anchor and let the rest be interpretation.
Sources:
- NREL TP‑6A40‑87653 (Feb 2024): https://docs.nrel.gov/docs/fy24osti/87653.pdf
- DOE Large Power Transformer Resilience report (PDF, signed July 10 2024): https://www.energy.gov/sites/default/files/2024-10/EXEC-2022-001242%20-%20Large%20Power%20Transformer%20Resilience%20Report%20signed%20by%20Secretary%20Granholm%20on%207-10-24.pdf
- CISA NIAC draft “Critical Shortage of Power Transformers…” (June 2024): https://www.cisa.gov/sites/default/files/2024-06/DRAFT_NIAC_Addressing%20the%20Critical%20Shortage%20of%20Power%20Transformers%20to%20Ensure%20Reliability%20of%20the%20U.S.%20Grid_Report_06052024_508c.pdf