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The US Transformer Shortage – Will It Affect Utilities' Future Plans?

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Shortages of transformers have just begun to make themselves noticed outside the utility community. These vital components of the T&D system are not easy to get hold of, with knock-on effects on projects being delayed or going up in cost.

The American Public Power Association (APPA), serving not-for-profit publicly owned utilities, surveyed their members at the start of 2022, and found that transformer delivery times averaged one year, compared to three months in 2018 (before the pandemic). Now, their membership is reporting wait times as high as 18 months to two years, with some manufacturers canceling orders because they don’t have enough available stock for customers.

In November, Rep. Sean Casten, D-Ill., backed by the utility sector, urged the government to authorize $2.1 billion in disaster supplemental funding to meet the shortage of electrical transformers and complementary grid security technologies via the Defense Production Act.

The cost of large transformers is up 20% to 50% since 2020, said Grid Assurance CEO Dave Rupert. The company stockpiles bulk power system equipment for subscribers, or for sale to non-subscribers. A year ago it took between 16 and 20 months to procure this equipment; now it has effectively doubled to 20 to 39 months.

The shortage of distribution system transformers is a relatively new problem and is separate from a longer-standing shortage of large bulk power system transformers. Both, however, are a threat to grid security and are driving up costs. Only a few US manufacturers of distribution system transformers operate, and reasons for the delays and shortages include constraints on materials, labor and production capacity. Overseas, the situation is no better so importing is not a solution, making this a serious issue which needs to be addressed by both government and the private sector.

This situation will ultimately affect how quickly the country is able to upgrade its transmission infrastructure in the years ahead.

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