Humans are hungry for power. Everything in the world runs on electricity and power is in constant demand. To solve the geometric demand for more power, humans are reviving nuclear power plants, advancing fusion energy, investing in solar power, and building more traditional gas and oil plants. No matter how you make it, all these methods of creating electricity require a crucial piece of tech: transformers. According to IEEE Spectrum, there are not enough of them.
A transformer does what the name suggests. You run electricity into it and it transforms the voltage, either up or down, and outputs it somewhere else. It’s a critical piece of technology that’s been in use for more than 100 years. They’re everywhere. There are small transformers in your phone charger and enormous industrial transformers that take up space in warehouses.
And the world can’t make them fast enough. The industry has been signaling this is a problem for the past year. In April, energy analytics firm Wood Mackenzie released a report showing that lead time on transformers had jumped from 50 weeks in 2021 to 120 weeks in 2024. It’s worse if you need a larger transformer. With those, lead times can range from 80 to 210 weeks.
That means if you’re building a power plant or substation, you might need to join a four-year waiting list to get a critical piece of infrastructure. The National Infrastructure Advisory Council (NIAC), a DHS-linked government organization, published a report detailing the problem back in June. Multiple trade publications released warnings about the transformer shortage following the report.
So why the shortage? It’s simple economics. Demand is outstripping supply. Raw material costs have doubled since 2020. Many transformers use metals like copper and Grain Oriented Electrical Steel (GOES). Copper prices have risen 50 percent since 2020. GOES has doubled. The prices of both could increase even more after Trump takes office if he moves forward with proposed tariffs.
We import a lot of stuff we use to make transformers from out of the country. “In the US, only around 20% of transformer demand can be met by domestic supply,” the Wood Mackenzie report explained. “Despite President Biden signing executive orders In June 2022 to help domestic manufacturers increase their production, funding has yet to be specified in any subsequent bills.”
There’s only one plant in the U.S. that manufactures GOES. U.S. Senators Sherrod Brown (D-OH) and Bob Casey (D-PA) have both urged Washington to add GOES to existing steel tariffs to “shore up domestic production.” If that happens, it’ll make the transformer shortage worse.
Casey and Brown want to protect American jobs, but according to the NIAC report, there are not enough people taking the jobs that already exist. “The domestic transformer manufacturing industry faces labor shortages due in part to the demands of training, working conditions, and some of the manufacturing facilities being in rural areas that offer a limited regional labor pool,” it explained in its report on the transformer shortage. “Domestic manufacturers indicated that a lack of workers is one of the largest impediments to expanding capacity. With distribution transformers in particular, manufacturers have found it necessary to add shifts to meet higher demand.”
We’re building a lot of power-hungry things in the U.S. There are expensive crypto mines in Texas, data centers store online materials and fuel-hungry AI models, and cities are growing across the country. Demand for power isn’t going to shrink.
Big Tech thinks the answer is advanced nuclear power plants. Reformers want sustainable and renewable energy like wind and solar. Oil and gas companies want to build carbon scrubbers and sell people greenwashed versions of the old methods. But all of those methods rely on transformers and we simply aren’t building enough of them.
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