A perfect storm is brewing: aging transformers along the grid, plus increased need for new transformers to also meet load growth from electrification efforts—and longer manufacturing lead times for transformers.

Experts detail both the problems and possible solutions to expedite the production of new transformers to meet the demand.

Of the roughly 60 million to 80 million transformers currently in use throughout the nation’s electric grid, around 55% are more than 33 years old and approaching end of life, according to a report by the National Renewable Energy Laboratory (NREL).

“We expect both aging assets and increases in loading to accelerate asset failure rates, particularly after 2030,” NREL wrote. “This is primarily because of a combination of in-service assets reaching end of life, accelerated growth rates and corresponding increased thermal loading impacts from electrification.”

The growth rate in annual required transformer capacity will outpace the growth rate in the number of transformers required as average transformer sizes increase, according to NREL. For replacement due to load growth, utilities are more likely to upsize smaller transformers and reserve load splitting—splitting existing transformer load across two assets—for larger transformers.

Overall, NREL expects the in-service distribution transformer capacity requirement in 2050 to be between 160% and 260% of 2021 levels, with annual transformer capacity demand increasing between 140% and more than 250%, depending on the scenario.

Unfortunately, manufacturing lead times for transformers have increased substantially, mainly due to several supply chain disruptions that occurred during the pandemic and that continue to affect production, according to a 2024 report from the National Infrastructure Advisory Council (NIAC). Currently, orders for new transformers take 2–4 years to be delivered, compared to a wait of just months in early 2020.

“Strong action is needed to increase the capacity of transformer production to ensure resiliency of national infrastructure, withstand storms, promote stability and growth of the U.S. electric grid, and to avoid the broad economic disruptions that would result from power outages and delays in connecting homes and businesses to the grid,” NIAC wrote.

More transformers will also be needed to meet state and national climate goals by successfully integrating clean energy on the grid, such as solar, wind and battery energy storage system generation, according to NIAC.

“The industry’s current dependence on foreign-made large transformers and key transformer components, such as electrical steel, presents a significant national security risk that must be addressed,” according to the NIAC report. “Increasing domestic production of transformers and critical components presents the best option.”

In addition to three policy recommendations, NIAC also had several suggestions that line contractors, utilities and their vendors could consider:

• Encourage long-term contracts and customer commitments between transformer suppliers and the industry sectors driving demand.
• Establish a strategic virtual reserve of transformers, with the federal government as the buyer of last resort.
• Promote collaboration between design engineers from utilities, engineering firms, trade associations and domestic and foreign manufacturers to standardize transformer design, reduce complexity associated with customization and facilitate interoperability through standardized interfaces between transformers and other grid components.
• Grow the pipeline of qualified workers by partnering with universities, community colleges and trade schools on training programs, while working with federal, state and local governments to craft tax incentives for workers who enter the field.

“While the emphasis of this report is on large power and distribution transformers, some of these seven recommendations also apply to other critical grid components such as conduit, smart meters, switchgear and high voltage circuit breakers, among others,” NIAC wrote. “More domestic or diversified production of this equipment is also needed.”