Germany-based energy giant Siemens Energy is investing $150m in a new factory in Charlotte, North Carolina, to address a shortage of power transformers across the US.

The new investment will result in Siemen’s first energy transformer production facility in the US. Part of the funding will come in the form of a Job Development Investment Grant from North Carolina. State Governor Roy Cooper announced the grant following approval from the state’s Economic Investment Committee.

Tim Holt, member of the executive board for Siemens Energy, said: “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.”

News of expanding operations at its North Carolina facility follows Siemens’ decision to invest $290m at three US sites in 2023. According to Siemens, the investment will ramp up production of critical electrical infrastructure equipment at its Dallas-Forth Worth facility, as well as bolster the electrification of its US data centres, battery plants, semiconductor facilities and electric vehicle charging operations.

Stepping up production of power transformers will also enable the US Government to reduce emissions by 50–52% compared with 2005 levels by the end of the decade.

However, energy experts predict that a quarter (25%) of global renewable projects are in jeopardy due to long transformer lead times.

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“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,” Holt added.

Power transformers link the generation and distribution of electricity and convert high-voltage electricity into lower voltages.