Grid infrastructure giant Hitachi announces $1 billion investment plan, encompassing establishment of a transformer factory in Virginia.
In a significant move to bolster the U.S. power grid, Hitachi Energy has announced plans to invest over $1.1 billion in expanding its high-voltage components production facilities across the country.
The investment includes a $457 million transformer production facility in South Boston, Virginia, set to be completed by the end of 2025. Construction work on this new facility is scheduled to begin in the summer of 2023. Hitachi Energy already owns a transformer production facility in South Boston, and this expansion is a testament to their commitment to the U.S. market.
Besides the Virginia facility, Hitachi Energy will also invest $22.5 million for a capacity expansion at its dry-type transformer factory in Bland, Virginia, and a new supporting facility in Atkins, Virginia. Construction on the new facility in Virginia is expected to begin before the end of this year and be operational by 2028.
The investment is aimed at building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks. With the electrification of transportation and buildings, and an industrial expansion, there is a growing demand for electricity and a need to expand the power grid.
Data centers could be the source of 44% of U.S. electricity load growth from 2023 to 2028, and potentially consume 9% of the United States' electricity generation by 2030, double the amount consumed today. This increasing demand for electricity has led to lead times for utilities to procure transformers stretching from weeks to years due to grid expansion and a shortage of manufacturing capacity.
To address this issue, the President's National Infrastructure Advisory Council recommended the federal government should establish a "strategic virtual reserve" of electric transformers. Hitachi Energy's investment aligns with this recommendation, aiming to ensure a reliable and secure energy supply.
In addition to the Virginia projects, Hitachi Energy will make additional investments of over $500 million to meet the growing need for U.S. grid equipment. The company's planned investments are also in line with the Trump administration's AI action plan.
Secretary of Energy Chris Wright praised Hitachi's investment, saying, "The Trump administration looks forward to continuing to partner with private industry to ensure access to affordable, reliable, and secure energy and thousands of high-paying jobs."
The details of the Virginia production capacity expansion are commercially sensitive and cannot be disclosed. However, the investment by Hitachi Energy is a significant step towards addressing the growing demand for electricity and ensuring a robust and resilient power grid for the U.S.
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