Siemens Energy has revealed plans to produce transformers in the US from 2025 to keep up with rising electricity demand.

The German energy giant will invest $150m to expand its power manufacturing facility in Charlotte, North Carolina, and will develop its first transformer production facility there.

The investment will generate 600 local jobs.

The construction of the new factory is scheduled to commence in 2024, with the initial batch of power transformers rolling out in early 2026.

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Present domestic supply in the US fulfils only 20% of the country’s large power transformer needs and procurement lead times are extending to up to five years.

Siemens Energy executive board member Tim Holt stated: “The US energy transition is in full swing, with $3.9bn pledged to expand and update the US grid within the next two years. However, renewable projects and grid expansion can only happen with the availability of transformers.

“The US market today is mostly served by the Americas and Europe, but as global demand for this critical technology increases we see the long-term potential to increase our US footprint, building on our long-standing presence in North Carolina, where we have had operations since 1969.”

The US has set a target to cut its emissions by between 50% and 52% from 2005 levels by the year 2030. Achieving this goal hinges on the decarbonisation of the US grid, which is heavily reliant on the availability of power transformers.

Of global renewable energy projects, 25% are at risk due to prolonged lead times, supply chain issues and a shortage of global transformer production.

Siemens Energy aims to mitigate these challenges and enhance US domestic transformer production capacity with its latest investment.

In August 2023, the company stated that its wind turbine units would cost the company up to €2.2bn, adding to a net loss of €4.5bn for the year.