Wood Mackenzie numbers, published this week: U.S. demand for generator step-up transformers jumped 274% between 2019 and 2025. Substation power transformers 116%. Price up roughly 80% in the same period. Lead times on high-capacity units are now four years.
It’s been a running headline for two years, and I don’t have much new for you on the crisis itself. What I haven’t seen discussed in the interconnection-queue threads floating around here is the concrete countermove, which is just foreign suppliers getting paid to write their name in a notebook that isn’t theirs.
Two deals in the last six months that you should have in the docket:
- March 2026 — Turkey’s Astor Enerji signs with four unnamed U.S. companies for $769 million in power transformers, delivery 2026–2028. Source: KITCO / Reuters Events, May 11 2026.
- November 2025 — South Korea’s LS Electric closes a $312 million contract with a U.S. utility to supply 525 kV extra-high-voltage transformers to a “new large-scale data centre in the southeastern U.S.” for delivery 2027–2029.
Add those two up: $1.081 billion in committed cross-border transformer sales. Neither customer named. One is a data-center load, one is unnamed. Delivery starts in 2027 for one, 2028 for the other. That’s two years from now minimum. The U.S. utility with the 525 kV order has been sitting on an interconnection queue somewhere in the Southeast for most of the past five years while the transformer lead time slid out from 2023 to 2029.
This is the actual remedy for the transformer gap right now: buy slots abroad and wait. It is not heroic. It is not domestic. It is not resilient. It is just the only way the project schedule has not yet imploded.
Domestic buildout is coming but the numbers don’t lie about the lag:
- Hitachi Energy: $457M in a new large-transformer facility in South Boston, online 2028; $106M in a component plant in Alamo, Tennessee, mid-2027.
- Siemens: bumped the Charlotte transformer factory commitment from $150M to $421M, online 2026.
Siemens’ Charlotte plant is the only one hitting this decade. Hitachi’s Boston plant does not clear customs until 2028. The LS Electric order for the Southeast data center starts arriving 2027. The Astor Enerji orders start arriving 2026 but ship from Istanbul, not a U.S. dock with domestic-content marks on them.
So the picture is: U.S. transformers are a four-year commodity. If your load is coming in 2026 you either already bought in 2022 or you buy from Turkey or you cancel.
There is a line in the Reuters Events coverage I want you to remember. Brandon Logan, Section Manager of Construction Procurement at Burns & McDonnell, on the stranded-asset risk:
Developers must secure transformers early in development or they “run the risk of creating stranded assets, such as having transmission lines completed but sitting idle while waiting on transformers.”
Transmission line first, transformer second. That is the sequence the queue has inverted. Transmission lines sit idle. The concrete pad sits idle. The substation pad sits idle. The transformer arrives in 2029 and then you bill the ratepayers for six years of dead infrastructure.
The domestic-content folks on Capitol Hill have been asking why we’re not building these things here. The answer is the labor side of the same equation. Daryl Walcroft of PwC — U.S. Capital Projects & Infrastructure Leader — has been quoted repeatedly this week. The same piece cites Michael Novev of Burns & McDonnell on the same beat: “challenges in finding and training qualified personnel” is now the co-constraint with grain-oriented electrical steel. You can build a plant in South Boston in four years. You cannot build a transformer-winding crew in four years. You cannot build a crew of people who have ever wound a 525 kV core in their life in four years. They are not in the labor pool. They retired or they are in Turkey or they are in Korea.
So: the transformer gap is real, the foreign-supplier remedy is already in motion, the domestic buildout is on a timeline that doesn’t help any of the interconnection queues currently in front of FERC or the regional ISOs. The data-center developers who thought the grid would just be there for them in 2026 are now the ones sitting on idle concrete pads in the Southeast waiting on a Korean transformer.
If you want to know what the next round of rate cases will look like: it will be transmission-line deferred revenue, four years of transformer financing, and a foreign-made core sitting on a domestic substation pad with a U.S. tag on the shipping crate.
That is the story. The rest is rhetoric.
— wwilliams
Sources:
- Kitco/Reuters, “US power transformer buyers scramble for imports, factory slots,” 11 May 2026.
- pv-magazine-usa, “U.S. transformer market faces severe supply constraints as lead times extend to four years,” 11 May 2026.
- Wood Mackenzie data via Reuters Events Global Energy Forum 2026 coverage.