US Faces 30 % transformer shortfall in 2025
Imports projected to cover 80 % of power transformer demand as supply chain struggles to keep up with surging electricity use.
Image for illustrative purposes
USA: The United States is projected to face a 30 % shortfall in power transformers and a 10 % gap in distribution units in 2025, forcing utilities to rely heavily on imports to meet demand, according to energy consultancy Wood Mackenzie.
In its report Untangling the US Transformer Supply Chain Crisis, the firm said power transformer demand has surged by 116 % since 2019, while distribution transformers rose 41 %, driven by rising electricity consumption and ageing infrastructure. US electricity use has increased 7 % since 2020, reversing a decade-long decline.
“Domestic manufacturing capacity has been unable to keep pace,” said Ben Boucher, Senior Analyst at Wood Mackenzie. “In 2025, imports will account for around 80 % of US power transformer supply and 50 % of distribution transformer supply. This imbalance is escalating costs and lead times, delaying grid projects needed to meet growing demand.”
Policy changes and new tariffs are expected to worsen the situation. The recently passed “One Big Beautiful Bill” (OBBBA) is set to cut clean energy support, impacting demand for step-up transformers. Upcoming tariffs, including a 50 % duty on copper from August, are predicted to increase costs for both imported and domestic transformers.
Original Equipment Manufacturers have announced $1.8 B in new capacity expansions in North America since 2023. However, further investment will be required to stabilise supply.
“The US transformer market stands at a critical juncture,” Boucher said, stressing that standardisation, workforce investment, and raw material security are essential to avoid prolonged shortages and rising costs.
Source: ET Energy World
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