the globe. A large part is in the
Americas, where $1 billion has been
announced in the US alone, with ma-
jor investments in Canada and Latin
America. Other signicant invest-
ments have been announced in Europe
– Sweden, Finland, Spain, Germany
and Switzerland. In addition, there is
signicant investment going into
Türkiye. Looking to Asia, Hitachi
Energy has announced investments in
Thailand, Vietnam, as well as major
investments in China and India.
“All those investments are going to
serve domestic markets and also ex-
port markets because part of the key
principle that we adopted in trans-
formers is what we call exible
sourcing,” explained Melles. “We
want to give our partners the ability to
rely on supply from multiple facto-
ries. This brings exibility and resil-
ience to the supply chain.”
Another element that Melles says is
an integral part of its investment is
related to the fact that the transformer
business of Hitachi Energy is verti-
cally integrated.
“This means that all the components
that are used in a transformer are
manufactured internally. Starting
from tanks, going to insulation mate-
rial, bushings, tap-changers; our op-
eration actually supplies those com-
ponents to third-party partners. In a
way they are our competitors but are
an integral part of the transformer
eco-system, so we are glad to support
the market and our competitors who
in this case are partners on the compo-
nent side.
“So, in a nutshell it is quite a spread
of investment and follows the very
strong vertical integration that we
want to drive in the business unit be-
cause that also supports the growth of
the industry.”
The transformer market is growing
in all areas, in terms of deployment
in various industry sectors, trans-
former type and geography. Although
the market might be growing at dif-
ferent speeds in different countries,
the entire transformer market is
growing at pace.
“The rst wave of growth in the
market has been triggered by distribu-
tion and data centres – almost glob-
ally,” said Melles. “But now I can say
need for massive investment for grid
modernisation, especially for distri-
bution networks. “So, Europe is more
about renewables interconnection
and transmission and distribution
networks,” noted Melles.
In North America the drivers are
different. “The US is far less con-
nected from state to state, and there is
a very important race to modernise a
very aging network,” said Melles.
“The challenge in the US is how they
are going to add more power genera-
tion to feed the massive demand that
is coming from data centres and in-
creased manufacturing.”
India, he says, “is in the process of
a major energy investment wave”
that is linked to: power generation,
including more hydro; the need for
more transmission; and the develop-
ment of a more efcient mobility
network, i.e. a train system across
the different states.
“The [various] challenges,” said
Melles, “are related to the level of
maturity – the level of maturity of the
power generation piece, the level of
maturity of the transmission network,
and then how you are going to ensure
decarbonisation.”
But perhaps one of the biggest chal-
lenges to the entire transition is the
transmission system.
“One of the two biggest bottlenecks
today is the availability of gas turbines
needed to create the inertia needed in
the system, but the other big bottle-
neck is in transformers, particularly
[large] power transmission trans-
formers,” said Melles. “And this
where I am happy because Hitachi
Energy is the market and technology
leader in the transformer space. We
have announced major investments
globally, have a broad footprint and a
large amount of service centres.”
Melles said: “Since 2020, Hitachi
Energy has announced a total $9 bil-
lion investment, which includes
manufacturing capacity expansion,
R&D, engineering, and partnerships.
or transformers specically, we an-
nounced a $1.5 billion investment to
increase the footprint and manufac-
turing. And on top of that, we an-
nounced a further $250 million in our
insulation and components business.”
Those investments are spread across
T
he energy industry is certainly
far more interesting to the gen-
eral public today than, say, 20
years ago. With climate change and
the resulting ongoing transition to
clean, sustainable energy sources, the
sector has captured the world’s atten-
tion as never before.
“Everyone realises that the energy
transition to an electried world is the
only option if we really are serious
about decarbonising.” Bruno Melles,
Managing Director of Hitachi Ener-
gy’s Transformers Business Unit is
convinced that shifting from a society
that depends on fossil fuels for energy
production to one where electricity
represents the bulk of the world’s en-
ergy production and consumption is
the only way to achieve the carbon
reduction goals needed to save the
planet.
But that planet-saving energy tran-
sition is no small task. Indeed, there
are several challenges, which accord-
ing to Melles must be addressed at the
same time.
The shift calls for huge investment
in power generating capacity – pre-
dominantly wind, solar, hydro and
nuclear. The second challenge, he
says, surrounds mobility. With in-
creasing population and urbanisa-
tion, large cities are in the middle of
extensive planning to ensure ef-
cient and decarbonised forms of
transport such as rail, metro and
electric vehicles. The third, said
Melles, is digitalisation.
“On top of moving to energy from
fossil to electricity and placing a
massive focus on alternative forms
of energy production – in particular
renewables and nuclear – as well as
the mobility aspect, there is of course
all the elements connected to the
digitalisation and the articial intel-
ligence challenges that require even
more investment.”
He added: “So, all of these require
faster and more widespread moderni-
sation of the grid, as well as scalabil-
ity of the grid because energy con-
sumption will also increase. This is
not just a challenge for Hitachi Energy,
it’s a challenge for everyone – entities
in power generation, entities involved
in transmission and distribution, users
and all throughout the value chain.”
Several metrics can be uased to
measure the size and scale of the chal-
lenge. According to Hitachi Energy,
during the period to 2050, 80 per cent
of the global energy consumed will
come from electricity. “This is a 4x
acceleration compared to where we
are today,” said Melles. Another indi-
cator is the amount of investment that
every utility, developer, power gen-
eration company is making. “We’re
talking about tens and tens of bil-
lions,” said Melles. Other simple
metrics include, for example, those
connected to the data centre market
being driven by the growth of AI.
Melles explained. “According to the
International Energy Agency, global
data centre electricity use could reach
945 terrawatt-hours by 2030, equiva-
lent to the total annual consumption
of Japan or Germany.”
The challenges and drivers will ob-
viously differ from region to region.
Europe is making massive invest-
ments in renewables such as offshore
wind and is therefore building strong
interconnections, including HVDC
links between countries, to make
grids more resilient. There is also
Transforming the
energy sector
Special Supplement
THE ENERGY INDUSTRY TIMES - OCTOBER 2025
Without urgent action to modernise, expand and scale grid infrastructure, including addressing shortages of critical
components like transformers, the world will not only fail to meet its increasing energy demands it will also be
unable to undergo a successful energy transition. Junior Isles speaks to Hitachi Energy’s Bruno Melles to get his
perspective on the situation around transformers and how the company plans to address the challenges.
11
Melles: “… the energy
ansn an eece
s e n pn
we really are serious about
ecansn
The South Boston facility will
be the largest manufacturing
site for large power
transformers in the US
question is how to speed up trans-
former delivery. It is one that Melles
has recently been discussing with
customers. He stressed that Hitachi
Energy, like any of its competitors,
cannot simply react to requests.
“The times of customers calling for
equipment and getting a response
[that aligns with their schedules] are
gone. Today, in the transformer mar-
ket, we are in a world where proper
planning is fundamental,” stressed
Melles.
The company is investing in capac-
ity to reduce lead time. Last month
Hitachi Energy announced a historic
investment of more than $1 billion to
expand the production of critical
electrical grid infrastructure in the
US. These investments, among the
largest seen in the electrical industry
in the country, include approximately
$457 million for a new large power
transformer factory in South Boston,
Virginia, along with signicant ex-
pansions of existing facilities
throughout the country.
The South Boston facility will be
the largest manufacturing site for
large power transformers in the
country and will produce transform-
ers of up to 500 kV and 500 MVA. It
is signicant in that, as well as sup-
porting efforts to improve grid resil-
ience in the US, it will be located in a
state that boasts the largest number of
data centres in the country.
“It is the largest transformer invest-
ment seen in the US for a very long
time. It will have all the latest tech-
nologies we have introduced in terms
of manufacturing, engineering, as-
sembly, quality control and health
and safety.” said Melles. “We are
very proud to work with the governor
because we also need to attract people
to the factory so the federal and state
[governments] will support that by
building houses for the workers. This
is a very important step as we are
going to create around 800 new jobs.”
Governor Glenn Youngkin added:
“Eight-hundred and twenty-ve new
jobs will be transformational for
Southside Virginia, as will the power
transformers those new hires are set
to build. We are also proud to an-
nounce a major workforce housing
project to support Hitachi’s new em-
ployees. We are partnering with Hali-
fax County and Virginia Housing to
build 96 new homes supported by a
grant from the Virginia Workforce
Housing Investment Program.”
Commenting on the social impact
of the new factory, Melles said:
“There will be 800 people, so that
means 800 families which means a
lot of young kids that will need
schools and support. So, I am very
happy that we can work with the
community to help us support our
new employees and colleagues.”
He stressed that working with uni-
versities and vocational schools is
important to Hitachi Energy in at-
tracting and retaining both white
collar and blue collar talent, and is a
central part of the company’s driving
ethos.
“It is also important to underline
that this is a critical element in order
to support the growth plans and in-
vestments that we are making,” said
Melles. “This is why we are very
proud that Hitachi Energy is attract-
ing a lot of talent. Our purpose to
‘Inspire the next era of sustainable
energy’ is really a catalyst for re-
sources across the world.”
It is expected that the rst trans-
former from the factory in South
Boston will be used at a utility substa-
tion or for a data centre. “These are
the applications that are very thirsty
for this kind of product,” Melles noted.
The South Boston news follows an
announcement in March of additional
major investments of more than $250
million by 2027 to expand global
production of critical components for
transformers. These investments bol-
ster Hitachi Energy’s manufacturing
capabilities across the US, enhancing
production capacity at the company’s
transformer factories in Virginia,
Missouri, and Mississippi. It includes
transformer components such as
bushings and insulation as Hitachi
Energy is a critical supplier to other
transformer manufacturers.
Meanwhile, in June Hitachi Energy
announced that it is strengthening its
power transformer manufacturing
operations in Türkiye to meet the
growing demand for sustainable,
high-quality energy infrastructure
across Türkiye, Europe, and Asia.
This signicant expansion is essen-
tial to meet the ever-growing cus-
tomer demand and delivery lead
times while maintaining superior
quality. The new state-of-the-art 45
000 m
2
factory in Dilovasi will help
boost manufacturing capacity by 70
per cent and create 30 per cent more
jobs in the region.
In addition to expanding manufac-
turing, Hitachi Energy has also been
changing how it works with its cus-
tomers. The majority of its customers
are now seen as partners, supported
by long-term framework agreements.
He notes that the whole industry is
increasingly moving to such agree-
ments, which require mid- to long-
term visibility of a customer’s project
pipeline.
“For the last few years in most in-
dustry sectors, we have been working
side-by-side with them – not only to
co-create in terms of technology but
also to work on a much longer pipe-
line to understand the volumes needed
over a longer period,” explained
Melles. “Having visibility over, say, a
three to10-year period allows us to
deliver equipment when they need it.
It also allows us to have proper plan-
ning for manufacturing, so we can
design a factory to properly support
that, basically, every part of the market
is growing at very high speed. In
terms of industries, there are some
important sectors – like data centres,
semiconductors and steel manufac-
turing – that are growing rapidly.
“In the utility space, transmission
is growing very, very fast, probably
faster than distribution right now.
But it is a matter of sequence of in-
vestment ow.
“Overall, the utilities are investing
because: the energy produced has to
be transmitted and distributed; there
is massive investment in the power
generation space, e.g. in gas in North
America; there is massive invest-
ment in offshore wind in Europe; and
hydro is coming back strongly in
countries like Canada, China and
India. Rail and metro are also grow-
ing at very high speed.”
With such strong growth, one big
Special Supplement
THE ENERGY INDUSTRY TIMES - OCTOBER 2025
12
Hitachi Energy’s factory in
nn na nce
2020, the company has
annunce a a n
investment globally, which
ncues anuacun
engineering,” said Melles. Changes
are also being made to components
like bushings and tap-changers, where
modular design allows for exible
customisation and faster delivery.
Another important aspect from a
technology perspective is connected
to the circularity and decarbonisation
of the portfolio. This has seen Hitachi
Energy engaging the supplier on get-
ting more traceability of green mate-
rial, i.e. green copper and green steel.
It is also introducing ester oils as alter-
natives to mineral oil in its transform-
ers. These are not only biodegradable
but are also less ammable. Similarly,
it is working with a start-up company
to nd alternatives to using epoxy for
insulation.
Melles added: “Let’s also not forget
that we are decarbonising our opera-
tions, so the technology is also applied
to the kind of equipment we use in our
factories in order to ensure we meet
our decarbonisation targets for 2030
and 2050. Let’s not forget that roughly
90 per cent of the transformer can be
recycled. The question is how we
work together with our supplier and
our customer and partner on how we
can recycle when the transformer is at
the end of life; or how we can lever-
age our service operation to extend
the transformer life for a few more
years.”
Importantly, these changes to the
transformer and its components can
be handled in existing factories and
production lines. It is no surprise then
that the large majority of investments
that Hitachi Energy is making is to
boost and accelerate production from
browneld sites. nlike the new
greeneld factory in Virginia, which
is scheduled to produce its rst trans-
formers in the rst quarter of 229,
browneld facilities can be expanded
in a couple of years.
Melles explained: “The biggest
challenge when you are building a
greeneld facility is the civil work
but when you have an expansion, the
amount of civil work is very limited.
This is why when we have a brown-
eld site, basically we can say that,
depending on the complexity, we will
be ready to produce in one and a half
to two years.”
e added: “If it’s a greeneld fac-
tory for producing distribution trans-
formers, you can build it in two years
but when you are building a factory
for very large transformers, where
you need big cranes, strong founda-
tions and a lot of machinery, the time
[to build] is more in the ballpark of
three and a half to four years.”
Looking forward at the potential for
new factories around the world,
Melles says that with the current
market evolution, agreements and
commitments, and visibility that Hita-
chi Energy has for its partners, there
is already sufcient investment to
meet demand through to the early
2030s. The company is, however, al-
ready looking beyond this timeframe.
“We have already been speaking
with a European customer about
what might be needed between
2032-2040,” said Melles. “Particu-
larly in the transmission utility
space, there is already the visibility
of the investment plan. I’m pretty
positive that within the next two or
three years we are going to collect
enough information to understand
where else the investment is going to
materialise. Right now, it’s a bit too
early to say because we are investing
in every region, so we need to ensure
that the capacity is going to come.”
In the meantime, servicing the exist-
ing eet will continue to be an impor-
tant part of the picture. Earlier this
year, Hitachi Energy announced that
the company will strengthen its ser-
vice capabilities and portfolio by
creating of a dedicated service busi-
ness unit, where it will consolidate its
service offering from the different
parts of the company.
“It will be a very important growth
engine but will also be a very impor-
tant part of our value proposition to
support partners. There are three ele-
ments that our partners are looking
for. The rst is how to prolong the
life of the existing assets to optimise
its usage. Secondly, the large major-
ity that we are selling are assets that
we can digitise. So, the customers
are asking how we can help them
digitise those assets to help them
take preventive actions through pre-
ventive maintenance, preventive
support, etc. Then the third element
is, what else can we supply to our
partners as part of the service – trans-
formers as a service, energy as a
service and so on. There are many
elements of the service value in digi-
talisation,” said Melles.
“We will offer a single face for the
whole Hitachi Energy portfolio, and
hopefully be the partner of choice for
our customer – not only to support
daily service activities but also to
optimise the asset, digitise the asset
and then to provide even more ser-
vices that the customer is going to
look for.”
Melles sees these as “super excit-
ing” times for the energy transition
and Hitachi Energy. He concluded:
“Hitachi is Energy is not only tech-
nology leader but is also market
leader. We are the largest supplier of
transformers and high voltage equip-
ment and systems in the world, and
we appreciate the loyalty and con-
dence that our customers and partners
are showing us.”
our partner and also engage our sup-
pliers on their raw materials and
semi-nished goods we need to sup-
port operation. Having visibility on
manufacturing also allows us to en-
gage, within the frame agreement,
our own suppliers or machinery that
we need for the factory.”
In line with this approach, Hitachi
Energy recently announced that it is
also investing heavily in manufactur-
ing for full integration on the compo-
nent side – bushings, tap-changers
and insulation.
Innovation in transformer design,
development and production are also
supporting speed of delivery as well
as reducing environmental impact.
As Melles put it: “Technology is the
core of how we design, engineer,
produce and manage the lifetime of
the transformer.”
He says the company is embedding
articial intelligence and digitalisa-
tion as much as possible in its equip-
ment, as well as focusing on how it
standardises and modularises its
manufacturing. “In this way, we can
be faster and have much simpler
acn an eann
e ca an ue
collar talent is key to the
Hitachi Energy ethos
esee
transformer: Hitachi Energy
s nucn ese s
as alternatives to mineral
oil in its transformers to
support the circularity
an ecansan s
portfolio
THE ENERGY INDUSTRY TIMES - OCTOBER 2025
Special Supplement
13
