Transformer Shortage Threatens AI and Clean Energy Expansion
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There is a severe shortage of electrical transformers needed for AI data centers, with wait times up to 4 years. Prices are up 70% since 2020.
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Years of underinvestment and consolidation in transformer manufacturing is colliding with surging demand from AI and renewables.
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Domestic manufacturers supply only 20% of US demand. Key materials like copper and electrical steel have doubled in price since 2020.
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Biden administration allocated aid for the industry but no funding has materialized yet. More investment in manufacturing is urgently needed.
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Possible solutions include small nuclear reactors, solar power, using AI to balance electrical loads, and offshore wind farms. But new capacity will take years to come online.