The US’s largest transformer factory is coming for the AI power boom
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- Hitachi Energy broke ground on a $457 million expansion of its South Boston, Virginia campus that will become the largest power transformer factory in the US, manufacturing large power transformers for high-voltage transmission, power generation, industrial facilities, and data centers.
- The project will create around 825 new jobs in Halifax County, nearly doubling the site's workforce of about 850, where Hitachi Energy has manufactured transformers since 1968.
- Hitachi Energy's expansion is part of a previously announced investment of more than $1 billion to expand US grid equipment manufacturing, with a significant portion of that money flowing into Virginia.
- An ICF report projects total US electricity demand will rise 21% by 2030 and 39% by 2035, with peak demand growing 14% and 25% respectively, driven by data centers, industrial development, and electrification.
- ERCOT (Texas) and PJM (13 states plus DC) — the US's fastest-growing electricity markets — currently have no excess generating capacity to reliably support additional demand growth, per ICF.
- Virginia hosts the world's largest concentration of data centers, with Northern Virginia handling an estimated 70% of global internet traffic; data centers already account for roughly a quarter of Dominion Energy Virginia's electricity sales, and the utility expects demand to nearly double over 15 years.
Why it matters: Transformer shortages have become one of the biggest bottlenecks slowing new US power projects, and the ICF report makes clear the challenge is now transmission and equipment capacity, not just generation. Hitachi Energy's $457 million bet directly targets that choke point at a moment when ERCOT and PJM have no spare capacity and Virginia — already handling 70% of global internet traffic through its data centers — expects electricity demand to nearly double in 15 years.
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