Hitachi Energy to invest more than $100 million to manufacture transformers in Canada

To help meet the demand for transformers, the Government of Quebec is helping with funding of a testing facility as well as an engineering and design center.

April 29, 2024 Anne Fischer

Image: Hitachi Energy

Hitachi Energy today announced plans to upgrade and modernization of its power transformer factory in Varennes, and other facilities in Montreal, Canada to help address the great transformer shortage in North America.

More than $100 million includes funding from the Government of Quebec through Investissement Quebec to establish a state-of-the-art testing facility for large power transformers and a high-voltage direct current (HVDC) engineering and design center. Hitachi expects the expansion to create around 70 jobs.

The transformer shortage is felt in countries across the globe but is especially acute where clean energy and energy storage systems are expanding rapidly. Other causes of the shortages include shortages of raw materials, backlogs after the pandemic, labor constraints, shipping issues and more.

The Varennes facility is Hitachi Energy’s main manufacturing location for large power transformers in North America. The facility has been in operation since 1971, covers over 300,000 square feet and employs around 330 people.

The company sees the establishment of a new 130,000 square foot transformer testing facility on the manufacturing site in Varennes as a critical element of the company’s efforts to meet growing demand in the province for sustainable energy solutions. The testing facility is expected to be completed before the end of 2027.

This initiative aligns with Quebec’s broader strategy to meet its ambitious energy goals, including the need for more than 150 TWh of additional energy to achieve carbon neutrality by 2050 – around twice what Quebec consumes today.

“Globally, demand for transformers and electrical equipment continues to grow at an unprecedented scale… In addition to our global investments, the support of the Quebec Government will help to address North America’s rising demand for transformers to support fast-growing sectors like renewable energy, data centers, and industrial electrification, as Quebec strengthens its role as a key player in the energy transition,” said Bruno Melles, business unit transformers, managing director at Hitachi Energy.

The investment in transformer facilities in Canada follows closely after the company investments of over $1.5 billion to ramp up its global transformer manufacturing capacity to keep pace with the growing demand and support the long-term plans and electrification efforts. About $180 million of that investment, for example, will go to build a new state-of-the-art transformer factory in the Vaasa region, Finland.

In the U.S. Hitachi Energy recently announced plans to invest more than $37 million in expanding and modernizing its power transformer manufacturing facility in South Boston, Virginia. In addition to its own funds, Hitachi Energy has received financial support from the Commonwealth of Virginia and Halifax County where the facility is located. The company also plans to invest more than $10 million in the expansion and modernization of its 50-year olf distribution transformer facility in Jefferson City, Missouri to provide additional capacity and enhance its manufacturing capabilities.

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