A growing shortage of transformers is emerging as one of the largest obstacles to modernizing America’s aging power grid, delaying infrastructure projects as electricity demand surges from artificial intelligence, population growth, and expanding data center operations.
By yourNEWS Media Newsroom
The United States is facing mounting pressure to overhaul its electrical grid as demand for power accelerates faster than the nation’s ability to expand transmission infrastructure, with industry experts warning that shortages of key equipment could slow modernization efforts for years.
According to a report by The Epoch Times, transformers have become one of the most significant bottlenecks in the nation’s effort to rebuild and expand its electrical system.
Large sections of the American grid are decades old, with some infrastructure dating back to the late nineteenth century. Analysts estimate the United States will require approximately $1.4 trillion in grid investment by 2030 and more than $3 trillion by 2035 to meet future electricity needs and replace aging infrastructure.
At the same time, only a fraction of the transmission capacity required to support rising electricity demand is currently being constructed.
The growing strain on the system has intensified alongside rapid expansion in artificial intelligence infrastructure, large-scale data centers, and population growth in major metropolitan regions. Industry studies estimate the nation will need roughly 5,000 miles of additional high-capacity transmission lines annually to maintain grid reliability and reduce congestion.
On April 20, President Donald Trump designated portions of the nation’s electrical infrastructure and related supply chains as essential to national defense, citing concerns over the condition of the aging power system and the limited domestic capacity to manufacture critical components.
Trump said the country’s “aging and constrained” grid represents an “increasing threat to national defense” and warned that America’s ability to “design, produce, and deploy” infrastructure equipment such as transformers is “dangerously limited.”
The Department of Energy has also elevated grid reliability and supply-chain resilience among its strategic priorities as federal agencies respond to accelerating electricity demand. In March, the department announced a $1.9 billion funding initiative aimed at transmission upgrades and modernization projects.
Despite record levels of investment, major infrastructure expansion continues to lag behind projected needs. BloombergNEF estimated the United States spent approximately $115 billion on grid investment in 2025, the highest total globally.
Industry researchers say transformer shortages remain one of the largest barriers to translating those investments into operational capacity.
A July 2025 analysis by ICF International projected U.S. electricity demand could rise 25 percent by 2030 and 78 percent by 2050 compared to 2023 levels. Researchers warned that increasing demand may significantly affect both reliability and consumer electricity costs.
ICF analysts estimated electricity prices could rise between 15 and 40 percent by 2030 depending on regional markets, while some areas could see rates double by mid-century.
Transformer manufacturing disruptions that began during the COVID-19 pandemic continue to affect utilities, contractors, and developers nationwide.
The National Infrastructure Advisory Council reported in June 2024 that lead times for transformers had expanded to between two and four years, with at least one domestic manufacturer reporting waits as long as five years for large power transformers.
The emergence of large-scale artificial intelligence infrastructure has added additional pressure to the system. Goldman Sachs estimated in 2024 that AI-related growth could drive a 160 percent increase in electricity demand by 2030.
Andrew Phillips, vice president of transmission and distribution infrastructure at the Electric Power Research Institute, said expanding transformer production involves far more than simply opening new factories.
“Getting a new factory up to speed for transmission power transformers not only requires significant investment in facilities and lead times, but also requires training of staff and skills that often takes years to get to the acceptable standards for reliability at the transmission level,” Phillips told The Epoch Times.
Jerry Poon, principal engineer at Red Dog Engineering, said transformer shortages are increasingly delaying commercial and residential development projects.
“It’s not unusual to hear 12- [to] 18-month lead times for distribution transformers that used to be available in a fraction of that,” Poon said.
“In some cases, projects are ready to go except for that one piece of equipment. When that happens, everything downstream stalls—energization, inspections, tenant occupancy, all of it.”
Poon said the challenge is not necessarily the immediate collapse of the grid but the shrinking margin for error as aging infrastructure and supply shortages overlap.
“Utilities are having to plan further out, and in some cases defer noncritical upgrades or replacements because equipment simply isn’t available when they need it,” he said. “That’s manageable for a while, but it becomes a problem if multiple issues stack up at the same time.”
Researchers at the University of Wisconsin–Madison estimate nearly 70 percent of power transformers currently in operation are more than 25 years old and increasingly vulnerable to failure.
Phillips said utilities are attempting to extend the lifespan of aging transformer fleets through advanced monitoring systems, predictive analytics, oil dehydration technologies, and alternative insulating fluids designed to slow equipment degradation.
“Extension of life of the existing fleet is a good first step,” Phillips said. “Implementing advanced analytics, advanced monitoring, on-line oil dehydration, and using novel fluids are all relevant emerging technologies that are showing success.”
He also noted that many transformers are custom-built for specific applications, which further slows manufacturing timelines. Industry efforts are now exploring more flexible transformer designs that could be deployed across multiple applications more quickly.
Federal regulators and industry organizations are also expanding emergency equipment-sharing programs intended to reduce the risk of prolonged outages when transformers fail.
Officials from the Federal Energy Regulatory Commission said the agency is coordinating with the Department of Energy and industry groups to evaluate risks to the national power system and improve equipment availability during emergencies.
Programs operated by groups including the Edison Electric Institute and the North American Transmission Forum allow utilities and transmission operators to share or transfer spare transformers and related equipment during major outages or supply emergencies.
Dani Marx, spokesperson for the Edison Electric Institute, said electric utilities are continuing efforts to strengthen grid resilience while working alongside manufacturers and government agencies to expand domestic production.
“America’s electric companies are working closely with the government and manufacturers to expand domestic production of these key components,” Marx told The Epoch Times. “We’ve seen supply improve for distribution transformers, and work continues to expand manufacturing for the large power transformers, which continue to have long lead times.”
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