Leading the change

The rapid shift to cleaner energy sources, the electrification of traditionally carbon-intensive sectors, and the urgent need to modernise ageing grid infrastructure are redefining the requirements for performance, resilience, and sustainability. By 2040, over 80 million km of grid infrastructure will need upgrades.¹

An essential part of grid infrastructure is power transformers. The critical components for reliable, efficient, and scalable power delivery are vital in ensuring that the grid can meet today’s challenges while preparing for the future.

Amid the increasing demand, utilities face another significant challenge: managing an ageing fleet of power transformers. They operate under different conditions that no longer match their initial design specifications. Replacing these assets is expensive, time-consuming, and logistically complex. In response, utilities and grid operators are adopting transformer lifecycle management strategies to improve the performance and reliability of their existing transformers. This approach bridges the gap between operational excellence and long-term sustainability objectives.

To gather deeper insights on how Hitachi Energy is addressing these challenges, Energy Global (EG) sat down with Bruno Melles (BM) for a one-on-one discussion on the company’s approach to advancing transformer technology and driving innovation in transformer solutions.

Looking towards the global power system of 2050, it is anticipated the world will needing approximately four times the current power generation capacity, and transfer-ring up to three times as much electrical energy compared to 2020. Electricity will become the backbone of the entire energy system. Consequently, the demand for transformers is expected to rise significantly across all applications in the coming years. This growth will vary depending on markets and applications, with annual growth rates estimated to range from 1 – 2% globally to 5 – 10% in fast-growing markets and segments such as renewables and data centres.

Hitachi Energy is at the forefront of this transformation, driving innovation through an integrated strategy that anticipates future demands and accelerates the shift towards a decarbonised future. A key component of the company’s strategy is the expansion of its global manufacturing capacity and the strengthening of supply chains – both critical to ensuring the timely delivery of transformer solutions.

The strategy is deeply rooted in innovation and sustainability. The company is developing eco-efficient transformer designs, integrating digitalisation, and providing end-to-end transformer lifecycle support. By leveraging new technologies and ensuring operational excellence, Hitachi Energy is not only addressing today’s grid challenges but also future-proofing grid infrastructure.

As the world’s largest transformer manufacturer, Hitachi Energy is working closely with customers, suppliers, and other industry stakeholders to address the increased demand for transformers. It is focusing on understanding the market needs across geographies, segments, and applications, and translating that into market demand. In addition, it is closely collaborating with its customers to understand their long-term needs for transformers.

To meet the market demand effectively, Hitachi Energy is leveraging its global transformer footprint, which includes 60 transformer factories and 30 service centres worldwide. The company is investing in its existing factories to increase capacity through productivity enhancements, investments in new machinery and personnel, expansions, and eventually, new factories, product lines, and expanding the service organisation’s footprint and offering. In fact, the company has committed to a US$1.5 billion investment until 2027 to significantly grow capacity.

Throughout its full value chain, the company is securing the availability of necessary materials by maintaining a high level of vertical integration in its transformer manufacturing process. Hitachi Energy’s global footprint allows it to leverage its strategic supplier base to serve multiple markets across geographies.

To specifically address customers’ needs, the company is working together on long-term planning and discussing the best ways to fulfil their transformer needs, including potential investments and co-operation if economically viable for all parties. Additionally, it is investing in its people, expanding its workforce, and ensuring they are trained and properly qualified. This investment in people is essential to keep pace with innovation and the growing demand.

In summary, the approach is centred around people, long-term partnerships, and building the right dimensions and capabilities to address the increased demand while leveraging global footprint. Hitachi Energy has record investments underway to expand its capacity and build new factories. To put that in context, all the company’s 60 manufacturing facilities globally are impacted by the announced US$1.5 billion investment in the transformer business.

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