Transformer Shortage Crisis: Can New Engineering Solve It?

To Nick de Vries, chief technology officer at the solar-energy developer Silicon Ranch, a transformer is like an interstate on-ramp: It boosts the voltage of the electricity that his solar plants generate to match the voltage of grid transmission lines. “They’re your ticket to ride,” says de Vries. “If you don’t have your high-voltage transformer, you don’t have a project.”

Recently, this ticket has grown much harder to come by. The demand for transformers has spiked worldwide, and so the wait time to get a new transformer has doubled from 50 weeks in 2021 to nearly two years now, according to a
report from Wood MacKenzie, an energy-analytics firm. The wait for the more specialized large power transformers (LPTs), which step up voltage from power stations to transmission lines, is up to four years. Costs have also climbed by 60 to 80 percent since 2020.

About five years ago, de Vries grew worried that transformer shortages would postpone his solar projects from coming online, so he began ordering transformers years before they’d actually be needed. Silicon Ranch, based in Nashville, now has a pipeline of custom transformers to make sure supply chain problems don’t stall its solar projects.

The company isn’t alone in its quandary. A quarter of the world’s renewable-energy projects may be delayed while awaiting transformers to connect them to local grids, according to the Wood MacKenzie report. In India, the wait for 220-kilovolt transformers has
leaped from 8 to 14 months, potentially holding up nearly 150 gigawatts of new solar development.

And it’s not just renewable-energy projects. The transformer shortage touches utilities, homeowners, businesses, rail systems, EV charging stations—anyone needing a grid connection. In Clallam County, the part of Washington state where the
Twilight movies are set, officials in May 2022 began to deny new home-construction requests because they couldn’t get enough pad-mounted transformers to step down voltage to homes. To address the backlog of customers who had already paid for new electrical service, the utility scrounged up refurbished transformers, or “ranch runners,” which helped but likely won’t last as long as new ones.

The ripple effects of the shortage touch both public policy and safety. When a transformer fails from wear and tear, gets hit by a storm, or is
damaged by war or sabotage, the inability to quickly replace it increases the risk of a power outage. The European Green Deal, which plans for an enormous build-out of Europe’s transmission network by 2030 to accelerate electrification, is imperiled by the protracted wait times for transformers, says Joannes Laveyne, an electrical engineer and energy-systems expert at Ghent University, in Belgium.

For power engineers, this crisis is also an opportunity. They’re now reworking transformer designs to use different or less sought-after materials, to last longer, to include power electronics that allow the easy conversion between AC and DC, and to be more standardized and less customized than the transformers of today. Their innovations could make this critical piece of infrastructure not only more resistant to supply chain weaknesses, but also better suited to the power grids of the future.

How Transformers Work

A transformer is a
simple thing—and an old one, too, invented in the 1880s. A typical one has a two-sided core made of iron or steel with copper wire wrapped around each side. The sets of wires, called windings, aren’t connected, but through electromagnetic induction across the core, current transfers from one coil to the other. By changing the number of times the wire wraps around each side of the core, engineers can change the voltage that emerges from the device so that it is higher or lower than what entered.

This basic setup underlies transformers in a wide range of sizes. An LPT can weigh as much as two blue whales and might be used to step up the electricity that emerges from a fossil fuel or nuclear power plant—typically in the thousands of volts—to match the hundreds of thousands of volts running through transmission lines. When the electricity on those lines arrives at a city, it meets a power substation, which has transformers that step down the voltage to tens of thousands of volts for local distribution. Distribution transformers, which are smaller, decrease the voltage further, eventually to the hundreds of volts that can be used safely in homes and businesses.

The simplicity of the design has been its strength, says
Deepak Divan, an electrical engineer and director of the Georgia Tech Center for Distributed Energy. Transformers are big, bulky devices built to endure for decades. Their very durability shoulders the grid.

But they’re a little like the gears and chain of a bicycle—adept at their simple conversion task, and little else. For example, traditional transformers that work only with AC can’t switch to DC without extra components. That AC-DC conversion is important because a host of technologies that aim to be a part of the cleaner energy future, including the electrolyzers that create hydrogen fuel, EV charging stations, and energy storage, all require lots of transformers, and they all need DC power. Solid-state power electronics, on the other hand, can seamlessly handle AC-DC conversions. “Wouldn’t it be nice to have a power-electronic replacement for the transformer?” Divan says. “It gives you control. And, in principle, it could become smaller if you really do it right.”

The idea of a solid-state transformer has been
kicking around in academia and industry for years. Divan and his team call their version a modular controllable transformer (MCT). It uses semiconductors and active electronic components to not only transform electricity to other voltages but also invert the current between DC and AC in a single stage. It’s also built with novel insulations and other measures to protect it from lightning strikes and power surges. Divan and his team received an award in 2023 from IEEE Transactions on Power Electronics for one of their designs.

Divan’s modular transformer doesn’t have to be custom-built for each application, which could ease manufacturing bottlenecks. But as an emerging technology, it’s more expensive and fragile than a conventional transformer. For example, today’s semiconductors can’t survive electrical loads greater than about 1.7 kV. A device connected to the grid would need to endure at minimum 13 kV, which would mean stacking these transformer modules and hoping the whole group can withstand whatever the real world throws its way, Divan says.

“If I have 10 converter modules stacked in series to withstand the high voltage, what happens if one fails? What happens if one of them gets a signal that is delayed by 200 nanoseconds? Does the whole thing collapse on you? These are all very interesting, challenging problems,” Divan says.

Researchers at Oak Ridge National Laboratory’s GRID-C developed a next-generation transformer that is much smaller than previous generations and has the same capabilities. Alonda Hines/ORNL/U.S. Dept. of Energy

At Oak Ridge National Laboratory’s Grid Research Integration and Deployment Center, or GRID-C,
Madhu Chinthavali is also evaluating new technologies for next-gen transformers. Adding power electronics could enable transformers to manage power flow in ways that conventional ones cannot, which could in turn aid in adding more solar and wind power. It could also enable transformers to put information into action, such as instantaneously responding to an outage or failure on the grid. Such advanced transformers aren’t the right solution everywhere but using them in key places will help add more loads to the grid. Equipping them with smart devices that relay data would give grid operators better real-time information and increase overall grid resilience and durability, says Chinthavali, who directs GRID-C.

New kinds of power-electronic transformers, if they can be made affordable and reliable, would be a breakthrough for solar energy, says Silicon Ranch’s de Vries. They would simplify the chore of regulating the voltage going from solar plants to transmission lines. At present, operators must do that voltage regulation constantly because of the variable nature of the sun’s energy—and that task wears down inverters, capacitors, and other components.

Why Is There a Transformer Shortage?

Driving the transformer shortage are market forces stemming from electricity demand and material supply chains. For example, nearly all transformer cores are made of grain-oriented electrical steel, or GOES—a material
also used in electric motors and EV chargers. The expansion of those adjacent industries has intensified the demand for GOES and diverted much of the supply.

On top of this, transformer manufacturing generally slowed after a boom period about 20 years ago.
Hitachi Energy, Siemens Energy, and Virginia Transformers have announced plans to scale up production with new facilities in Australia, China, Colombia, Finland, Germany, Mexico, the United States, and Vietnam. But those efforts won’t ease the logjam soon.

At the same time, the demand for transformers has skyrocketed over the last two years by as much as
70 percent for some U.S. manufacturers. Global demand for LPTs with voltages over 100 kV has grown more than 47 percent since 2020, and is expected to increase another 30 percent by 2030, according to research by Wilfried Breuer, managing director of German electrical equipment manufacturer Maschinenfabrik Reinhausen, in Regensburg. Aging grid infrastructure, new renewable-energy generation, expanding electrification, increased EV charging stations, and new data centers all contribute to the rising demand for these machines.

Compounding the problem is that a typical LPT doesn’t just roll off an assembly line. Each is a bespoke creation, says
Bjorn Vaagensmith, a power-systems researcher at Idaho National Laboratory. In this low-volume industry, “a factory will make maybe 50 of these things a year,” he says.

The LPT’s design is dictated by the layout of the substation or power plant it serves, as well as the voltage needs and the orientation of the incoming and outgoing power lines. For example, the bushings, which are upward-extending arms that connect the transformer to power lines, must be built in a particular position to intercept the lines.

Such customization slows manufacturing and increases the difficulty of replacing a failed transformer. It’s also the reason why many energy companies don’t order LPTs ahead of time, says Laveyne at Ghent. “Imagine you get the transformer delivered but the permitting process ends up in a stall, or delay, or even a cancellation [of the project]. Then you’re stuck with a transformer you can’t really use.”

GE Vernova Advanced Research developed a flexible large power transformer that it has been field-testing at a substation in Columbia, Miss., since 2021. Cooperative Energy

Less customized, more one-size-fits-all transformers could ease supply chain problems and reduce power outages. To that end, a team at
GE Vernova Advanced Research (GEVAR) helped develop a “flexible LPT.” In 2021, the team began field-testing a 165-kV version at a substation operated by Cooperative Energy in Mississippi, where it remains active.

Ibrahima Ndiaye, a senior principal engineer at GEVAR who led the project, says the breakthrough was figuring out how to give a conventional transformer the capability to change its impedance (that is, its resistance to electricity flow) without changing any other feature in the transformer, including its voltage ratio.

Impedance and voltage ratio are both critical features of a transformer that ordinarily must be tailored to each use case. If you can tweak both factors independently, then you can modify the transformer for various uses. But altering the impedance without also changing the transformer’s voltage ratio initially seemed impossible, Ndiaye says.

The solution turned out to be surprisingly straightforward. The engineer added the same amount of windings to both sides of the transformer’s core, but in opposite directions, cancelling out the voltage increase and thereby allowing him to tweak one factor without automatically changing the other. “There is no [other] transformer in the world that has a capability of that today,” Ndiaye says.

The flexible LPT could work like a universal spare, filling in for LPTs that fail, and negating the need to keep a custom spare for every transformer, Ndiaye says. This in turn would reduce the demand for these types of transformers and crucial materials such as GOES. The flexible LPT also lets the grid operate reliably even when there are variable renewable resources, or large variable loads such as a bank of EV charging stations.

Avangrid’s mobile transformer has multivoltage capabilities and can be trucked to any of Avangrid’s onshore solar or wind projects within a couple of months. Hitachi Energy and Avangrid

Similarly,
Siemens Energy has been developing what it calls “rapid response transformers”—plug-and-play backups that could replace a busted transformer within weeks. And the renewable-energy company Avangrid this year introduced a mobile transformer that can be trucked to any of its solar or wind projects within a couple of months.

Transformers Designed for Longevity

There is room to improve, rather than replace, the century-old design of the traditional transformer, says
Stefan Tenbohlen, an energy researcher at the University of Stuttgart, in Germany. He cofounded the University Transformer Research Alliance, to connect international researchers who are tinkering with conventional designs. A chief goal is to make sure new transformers last even longer than the older generation did.

One approach is to try different insulation techniques. Copper windings are typically insulated by paper and mineral oil to protect them from overheating. New approaches replace the mineral oil with natural esters to allow the interior of the transformer to safely reach higher temperatures, prolonging the device’s lifespan in the process. Vaagensmith at Idaho National Lab has experimented with ceramic paper—a thin, lightweight, ultra-heat-resistant material made of alumina silicate fibers—as insulation. “We cooked it up to a thousand degrees Celsius, which is ridiculously high for a transformer, and it was fine,” he says.

Researchers at Oak Ridge National Laboratory built hollow transformer cores made of electrical steel using additive manufacturing. Alex Plotkowski/ORNL

Changing other materials used in LPTs could also help. Hollow-core transformers, for example, use far less steel. Scientists at Oak Ridge, in Tennessee,
have been testing 3D printing of hollow cores made of electrical steel. Switching to hollow cores and being able to 3D print them would ease demand for the material in the United States, where there’s just one company that produces GOES steel for transformers, according to a 2022 report from the U.S. Department of Energy.

Transformer Industry Faces Capacity Crunch

Transformer manufacturing used to be a cyclical business where demand ebbed and flowed—a longstanding pattern that created an ingrained way of thinking. Consequently, despite clear signs that electrical infrastructure is set for a sustained boom and that the old days aren’t coming back, many transformer manufacturers have been hesitant to increase capacity, says
Adrienne Lotto, senior vice president of grid security, technical, and operations services for the American Public Power Association, in Arlington, Va. She sums up their attitude: “If the demand is again going to simply fall off, why invest millions of dollars’ worth of capital into your manufacturing facility?”

But greater demand for electricity
is coming. The recent book Energy 2040 (Springer), coauthored by Georgia Tech’s Divan, lays out some of the staggering numbers. The capacity of all the energy projects waiting to connect to the U.S. grid amounts to 2,600 GW—more than double the nation’s entire generation capacity currently. An average estimate of U.S. EV adoption suggests the country will have 125 million EVs by 2040. The electricity demands of U.S. data centers may double by the end of this decade because of the boom in artificial intelligence. The National Renewable Energy Lab found that U.S. transformer capacity will need to increase by as much as 260 percent by 2050 to handle all the extra load.

Globally, electricity supplied 20 percent of the world’s energy needs in 2023, and may reach 30 percent by 2030 as countries turn to electrification as a way to decarbonize,
according to the International Energy Agency. India and China are expected to see the fastest demand growth in that time. India installed more solar capacity in the first quarter of 2024 than in any quarter previously, and yet, as mentioned, the wait time to get those solar projects running is growing because of the transformer shortage.

The world’s power systems are not accustomed to such upheaval, Divan says. Because longstanding technologies like the transformer change so slowly, utilities spend very little—perhaps 0.1 percent of their budgets—on R&D. But they must prepare for a sea change, Divan says. “Utilities are not going to be able to stop this tsunami that’s coming. And the pressure is on.”