Hitachi Energy has secured a contract worth up to $700m (SFr563.85m) with network operator E.ON to supply transformers for Germany’s electricity grid to enhance the country’s energy security, resilience and affordability.
The announcement coincides with the new German Government’s declaration of a €500bn ($587bn) fund aimed at enhancing infrastructure, with a significant emphasis on energy.
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The agreement is part of a new procurement initiative by E.ON aimed at core grid expansion components.
The new initiative comes after German elections highlighted concerns over energy prices and reliability.
With living costs rising, 70% of Germans are worried about escalating energy expenses, according to Reuters.
The country anticipates that electricity demand will surge from 96 terawatt-hours (TWh) in 2024 to 236TWh by 2035 due to advancements in AI, data centres and the electrification of industries such as vehicles, heat pumps and hydrogen, as per Barrons.
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By GlobalDataUnder this long-term partnership, Hitachi Energy will use its resources and collaborations to secure capacity and spearhead industry efforts to tackle the global shortage of transformers, which are essential for power grid infrastructure.
The Bundesnetzagentur, along with various German utilities and grid operators, is in urgent need of transformers to avoid grid connection delays, obstacles to new routing and potential setbacks to expansion plans aimed at promoting clean energy and electrification.
Hitachi Energy is implementing an investment plan totalling $9bn to scale up manufacturing capacity worldwide, including the expansion of its Bad Honnef factory in Germany.
Under the framework agreement with E.ON, Hitachi Energy will provide a significant portion of the transformers by allocating manufacturing capacity to facilitate the rapid expansion and modernisation of the German power grid.
Hitachi Energy CEO Andreas Schierenbeck said: “The growing importance of power grids demands bold investments and breakthrough innovations to shape the energy systems of the future.
“Our expansion goes beyond business – it reflects our responsibility as a global leader to accelerate capacity and deliver the critical equipment our customers urgently need. Strategic partnerships like this one empower TSOs, utilities and industry to build a more sustainable, secure, resilient and affordable energy system for Germany.”
In February 2025, E.ON called on Germany’s new government to improve returns on energy grids. The company highlighted that competitive margins are crucial for increasing investment in the sector.
