Transformer Shortage: Factors and Challenges of Current World Order

The Driving Forces Behind the Transformer Shortage

Electric transformer shortage around the globe is not caused by any single factor. This shortage especially in the USA and UK is caused by a series of events including national policies, elections, and disruption of supply chain due to wars in different regions of the world.

Continuous Increase in Demand

The most obvious reason why there is a shortage of transformers around the globe is simply an increase in their demand. This increase in demand is associated with a number of factors but the biggest of them is how we have shifted our lifestyle. 

As the world relies more and more on electricity to perform its daily tasks like cooking using electric stoves and traveling on electric cars. The demand for electricity has increased at a pace which current electrical power distribution infrastructure cannot support. To support the increased demand, more electrical transformers are needed thus creating a shortage in the process. 

Another strong factor here is the increase in delivery of the electrical energy to the far flag areas where initially there was a very limited supply of electricity. Electrical utility companies in order to increase their customers and have more business, are trying to supply electricity to each and every corner of their respective country. This expansion is not possible without the transformer thus it creates a serious distribution transformer shortage.

The current population and their lifestyle is not the only factor causing transformer shortage. It is also how the world population is increasing that has produced a transformer shortage. The increasing world population has forced governments to establish new cities with all the infrastructure of a modern world. 

This development of new cities with all modern infrastructure needs an electrical transformer as their backbone. This has created a worldwide residential transformer shortage. 

National Policies and Recent Elections

The current ongoing transformer shortage in countries like the USA, the United Kingdom, and all of Europe is basically due to their national policies or their recent elections. All these countries as their national policy are working to reduce their reliance on fossil fuel and rely more and more on clean electrical energy. 

The USA and Uk national policy to shift their entire country's transportation to electrical vehicles has put huge pressure on current electrical infrastructure that cannot support this demand. The requirement of new infrastructure to support and power electrical vehicles has developed a shortage of transformers of all types and sizes.

The other national policies of these governments is to promote the national manufacturing and supply chain for all types of products. This also includes electrical transformers and their related raw materials like copper. This policy has put extra taxes on the import of electrical transformers and export of raw materials to and from the countries like China that were and are world leaders in manufacturing and supplying transformers. 

As the current manufacturing and supply Chain setup in America and Europe is neither capable nor sufficient to meet their national need. The national policy of local manufacturing, assembly, and supply of electrical transformers has developed a serious shortage of electrical transformers.

In the most recent US elections, Donald J Trump has vowed that his government will do anything to promote national or local industry including manufacturing of transformers. This has forced suppliers of all types and sizes to reduce their transformer inventory thus creating a shortage of transformers.

Increase in Crypto and its Mining

Donald J Trump is also a strong supporter of crypto currency or digital current. In its recent election complaint he’s been promoting it very openly. This has made the USA and the entire globe think that there will be some government level support to this crypto currency. This has made a lot of new people and companies start working on crypto currency and its mining.

As the entire setup of this crypto current and specially its mining process depends completely on electrical and IT infrastructure. It consumes a huge amount of electricity to just mine one bitcoin and very similarly it takes a lot of electrical energy to support each bitcoin transaction. 

With the government leaning towards the crypto current, more and more businesses and individuals are working and setting up It infrastructure to support this bitcoin mining and they need dedicated electrical infrastructure. Bitcoin mining is a dedicated process and needs uninterrupted supply of electricity and to enable that each bitcoin mining setup needs a dedicated transformer.

As hundreds of thousands of new setups are popping up in the entire USA, UK, and Europe this has created a serious electrical transformer shortage for crypto mining.

Daelim Transformer has hundreds of transformers in stock at its Houston, USA facility, specifically for cryptocurrency mining. Capacities range from 1500 kVA to 3000 kVA, and they are available for immediate shipment—no waiting required. For any inquiries or orders, please contact Daelim Transformer today.

More resource: How to chose Pad Mounted Transformer for Crypto Mining Projects

AI and Data Center Expansion

This is the age of AI. With the launch of ChatGPT, the AI platform for the general public, the era of AI started. Now it's expanding at a speed that current infrastructure that supplies electricity for this is not sufficient. 

AI is all about having a data center based on which the AI can make decisions and provide information. These data centers in simple terms are very big computer systems that hold trillions of bytes of data. These data center computers not only contain data, they continuously gain more and use the current data to enable the AI system to do the task.

This entire system takes so much electricity that for any given AI system and a Data Center, a dedicated transformer. This transformer ensures that the data center has an uninterrupted supply of electricity.

As AI and Data centers are now a complete industry in their own domain and just like every industry in demand, they are experiencing exponential growth. This exponential growth needs exponential supply of transformers but with the current disrupted supply chain, this has created a serious transformer shortage.

More resource: Empower Your Data Center with Daelim Transformer

Power Grid Upgrades in the US and Europe:

The most recent upgradation of the power grid by the US and Europe where grid modernization for integration of renewable energy is the main target. The project has opened a new challenge and that is the supply of transformers that are capable of integrating conventional electrical supply with the new renewable sources like solar and wind turbines.

Based on their national policies, the USA, UK, EU and other countries around the globe have invested heavily in projects like solar, wind, geothermal and hydro. These individual systems integration with the national grid system to supply electricity nationwide, cannot be done using the existing old technology based infrastructure.

Upgradation of existing infrastructure to match the needs of integrating new renewable resources of energy with existing electrical distribution systems has generated a demand for modern transformers that is currently hard to meet.

This Upgradation needs transformers that are efficient, reliable, and intelligent to handle a variety of loads. These new demands had created a transformer shortage that cannot be met any time soon.

Challenges in Meeting Transformer Demand

The above mentioned factors have enabled us to understand the reason why there is a shortage of transformers but why this shortage is not being resolved. Why can't we just manufacture more transformers and deliver them to where it is needed. 

There are certain challenges in meeting the current transformer demand and like factors involved in shortage there are certain challenges faced in meeting this demand.

Raw Material Shortage

The initial surge in transformer demand is due to the increase in demand and usage of electrical machinery including electric cars and other daily used appliances. Now all these electrical machines use more or less the same conductive material like copper and structural material steel that we use in transformer manufacturing.

This has developed a demand for raw material that cannot be met. Our world known resources and their production capacity just cannot provide what we need to meet this demand. This shortage of raw material results in a clear shortage of electrical transformers of all types and sizes. 

More resource: What different materials are used in a Transformer?

Supply Chain Constraints

Initially when covid related lockdown happens, the supply chain setup that was effectively supplying all types of raw material to China and exporting quality products to the world was put to stand still. This disruption makes several businesses related to raw material supply and exporting of transformers bankrupt and forces them to close their operations. 

This supply chain till now has not got back to its post covid position due to lack of infrastructure, companies, expert individuals, and law of capital. Another reason behind supply chain disruption is wars going on in several parts of the world including the Ukraine and Russia war. War in the Middle East, and especially trade war that impose sanctions or heavy taxes on export of raw material to China and import of industrial goods from China.

Production Capabilities Constraints

Along with the challenges of raw material and supply chain, there is constraint of production capabilities. Covid and initial trade war make several companies bankrupt and current manufacturing setup is just not capable enough to meet the world's ever growing need of electrical transformers.

Manufacturing facilities do not have the machinery and production setup big enough to deliver monthly or yearly demand for the transformers even if they are working 24/7. Increasing production capabilities have challenges of its own including lack of capital and rate of return of initial investment.

Skilled Labour Constraints

One of the biggest challenges in meeting transformer production demand is the shortage of skilled labor. Most people prefer tech work over blue collar jobs and with the recent tech boom the world has adopted the tech against blue collar job. The lack of skilled labor has forced many transformer manufacturing facilities to work on reduced production capacity. 

Our Solution to the Transformer Crisis

Daelim Transformer, as a world-advanced transformer manufacturer and supplier, is highly capable of providing solutions to this shortage of transformers. 

Industry Focused Solutions

We are offering industry focused solutions by offering a unique transformer that meets specific requirements of a particular industry. We offer dedicated transformers for crypto mining, renewable energy, and manufacturing plants. Each industry has its own requirements and we offer a unique transformer for each application. This helps us manufacture and deliver transformers for individual customers in record time without any delays.

Reading more about Daelim Transformer Solutions

Production Capacity and Stock Availability

Understanding the raw material and supply chain issues, we have developed multiple manufacturing facilities. We already have fully functional production setups in the USA and China with monthly production capacity of 300-500 transformers. 

Our facilities in Europe and Australia have hundreds of residential transformers ready in stock. We are currently offering delivery times of 10-12 weeks for distribution transformers and 6-8 months for HV power transformers.

Commitment to Reliability

We pride ourselves on delivering high-quality transformers on time and providing unparalleled customer support. Our solutions are backed by a proven track record of reliability, ensuring uninterrupted operations for our clients.

Conclusion

A shift in living style with our never ending dependence on electricity to do basic daily tasks has produced a transformer shortage that the world cannot overcome anytime soon. Due to government policies of shifting on renewable energy, industry shift toward crypto mining, and trade war between countries, we are seeing a shortage that needs a dedicated solution. 

Daelim transformer offers a complete solution of the problem by having a dedicated transformer design developed to meet a unique industry requirement. With our multiple production and distribution facilities we offer a high quality transformer in minimum lead time.

Follow Up

World is facing a transformer shortage and even a simple residential transformer can take months to get delivered. Daelim Transformer being the world advanced transformer manufacturer is offering transformers of all types, size, and capacity in record time around the globe. We offer all types of residential transformers, power transformers, and distribution transformers in the USA, Europe, Australia, and for clients around the globe. 

Our state of the art manufacturing and distribution setup enables us to deliver any batch of transformers in weeks rather than months. If you have any query regarding this, Contact Us and our team will talk you through the process.