The electric transformer shortage

The podcast explores the reasons behind the extraordinary lead times in the transformer market, which have persisted and worsened since 2020, unlike other supply chains that recovered post-COVID. Tim Mills, CEO of transformer manufacturer ERMCO, explains that initial COVID-related disruptions were compounded by increased infrastructure spending, electrification, the rise of EVs, renewable energy integration, and more frequent severe storms. Expanding manufacturing capacity is challenging due to saturation, labor shortages, equipment lead times, and dependence on a single US supplier for grain-oriented steel. The potential shift to amorphous steel, driven by proposed DOE efficiency standards, introduces further uncertainty and could exacerbate supply chain issues. Despite these challenges, capacity expansion efforts are underway, with single-phase pole transformers expected to see relief soon, while pad-mounted and three-phase transformers may remain constrained for another 12-24 months.