February 19

A new North Carolina factory will build large power transformers. How do they help the clean energy transition?

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Big boxes of steel, iron, and mineral oil.  

That’s how John Gajda, a long-time utility engineer and professor at North Carolina State University, describes the power transformers Siemens Energy plans to build in Charlotte. 

The hunks of metal are named for their vital function: transforming the electricity produced at power plants to a voltage suitable for transmission, then transforming the voltage again for use in our homes and businesses.  

“Transformers are the key technology that allow us to carry power over a distance,” Gajda said. 

Central to the intricate network of cables, wires, and scaffolding seen at power substations, transformers have long played a critical — if not flashy — role in our electric grid.  

“It’s maybe not the sexiest part of power generation,” said Richard Voorberg, president of Siemens Energy’s North America hub. “Everybody likes to talk about the generation side — big wind turbines or solar panels or nuclear plants. But this is one of those quiet backbone things that are necessary.” 

Transformers come in all shapes and sizes, from the 200-ton version at a power plant switchyard to the small green box outside a home.  

Siemens Energy plans to build the former, highly specialized pieces of equipment whose lead times have ballooned from about 18 months to up to five years, thanks to a global shortage. 

One factor leading to more demand: large power transformers in this country are about 40 years old on average, according to the U.S. Department of Energy, and brushing up against their expiration dates.  

“Some units in the grid are even more than 70 years old and still operating,” the agency says in a recent report. “Aging [large power transformers] cause higher failure risk.” 

The worldwide push to electrify transportation and heat, combined with the transition to renewables from fossil fuels, has also created a surge in need. 

“We need to build a lot more wind and solar,” said Luke O’Dea, vice president of engineering at Durham-based Cypress Creek Renewables, “and we need one or more of these transformers at every site where we want to build a new project.” 

The U.S. Department of Energy says the country bought about 750 large power transformers in 2019. Three years from now, the figure will grow to 900, the agency predicts

Compounding the problem, only about a fifth of U.S. large power transformers are produced domestically. Much of the rest are produced in Eastern Europe and Asia. 

“We’ve got to be making these more in our country,” Voorberg said, “not only because of political instability in certain regions — but also plain old logistics issues.” 

Siemens Energy’s new investment in North Carolina will help. The company will expand and refit its existing factory in Charlotte to produce 57 large power transformers and bring in another two dozen for service each year, adding 475 jobs. It will mark the energy giant’s first such facility in the United States. 

To be sure, the transformers will serve the entire country, not just the Carolinas. But the equipment will be vital for Duke Energy, which is required by law to zero out its carbon emissions by midcentury, and is planning now for transmission upgrades required to interconnect more solar, wind, and battery storage.

“We’re building a lot of new substations,” said spokesperson Jeff Brooks. “That’s part of growing capacity on our system to support not only new business and industry, but also the dynamic power flows required to add more distributed technologies across the grid.” 

Siemens Energy will also confront another challenge posed by the clean energy transition: Transporting renewable electricity hundreds of miles from where it’s readily produced to where it’s needed, such as from large wind farms in the Midwest or in the Atlantic Ocean to the populous East Coast. 

“To transfer it that long distance, you need to convert it to DC,” said Voorberg, referring to direct current as opposed to alternating current. “Otherwise, you’re getting way too many losses going on.” 

That’s why the company will add 84 jobs in Raleigh to design and test high-voltage DC transmission systems. “It’s more like a lab in Raleigh,” he said, “and a factory in Charlotte.” 

North Carolina Gov. Roy Cooper, a second-term Democrat who has long championed the state’s clean energy economy, helped bring about the investment along with a host of government partners.

“Bringing production of these high voltage transformers onshore not only creates American jobs but makes our electric grid more resilient and ready for the transition to clean energy,” Cooper said in a statement.

Gajda, part of the Future Renewable Electric Energy Delivery and Management research center at N.C. State, certainly agrees. But when he saw the news, he said, he first viewed it through the lens of a professor.

“I can tell my students, ‘Hey, here’s another cool place where you can go to work,’” Gajda said. “I’m just excited about what it does for the energy ecosystem in North Carolina.”

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