Germany’s energy transition is in a state of emergency. As the Bundesnetzagentur and local utilities face a rush to find transformers needed to fortify grid infrastructure. This demand comes at a time when energy prices and security of supply are high on the political agenda, not least since last month’s German elections. Meanwhile, the rest of the country is getting ready for a historic wave of new demand for electricity. We forecast usage to leap from 96 terawatt-hours (TWh) in 2024 to 236 TWh by 2035, underscoring the need for improved infrastructure that is more critical than ever.
Transformers are a key component for preventing delays in grid interconnections. They advance US DOT goals to remove bottlenecks to new congestion relief routing and avoid bumps in future expansion efforts that would inhibit clean energy and electrification. Facing 70% of Germans saying they are concerned about rising energy costs, the government of Chancellor Olaf Scholz has understood how urgent these concerns are.
Government Initiatives and Funding
They have committed to a gargantuan €500 billion ($587 billion) fund to upgrade infrastructure with a direct focus on transitioning energy systems. This central initiative would produce and distribute immediate supply transformers. It shifts emphasis away from short-term measures toward a clean energy transition with enduring benefits.
E.ON, a leading utility provider, has been vocal about the need for strategic improvements in energy grid returns, urging the new government to act decisively by February 2025. Production starts next month. The company is raising alarm over hurdles that lie ahead. They expect electricity demand to surge massively as artificial intelligence innovations and widespread electrification across sectors (like transportation, heating, and hydrogen production) pick up speed.
The Role of Industry Leaders
Fortunately industry leaders such as Hitachi Energy are already rising to the occasion to address these critical needs. Additionally, the company’s CEO Andreas Schierenbeck acknowledged that sufficient investment and innovation are crucial to realizing ambitious energy system transformation goals.
“The growing importance of power grids demands bold investments and breakthrough innovations to shape the energy systems of the future.” – Andreas Schierenbeck, Hitachi Energy CEO.
It signaled that Hitachi was committed to more than just business interests. As a globally-minded leader it should do more to bolster capacity and ensure that utilities and transmission system operators (TSOs) have the necessary equipment. Strategic cooperative agreements are at the heart of collaboration to develop a more resilient, sustainable, secure, and affordable energy system in Germany.
“Our expansion goes beyond business – it reflects our responsibility as a global leader to accelerate capacity and deliver the critical equipment our customers urgently need. Strategic partnerships like this one empower TSOs, utilities and industry to build a more sustainable, secure, resilient and affordable energy system for Germany.” – Andreas Schierenbeck, Hitachi Energy CEO.
Future Outlook
Germany’s efforts to finalize its ambitious electrification plans means that the need for transformers will continue to be a priority. The upcoming breakthrough in electricity demand led by new technologies makes it even more imperative to tackle today’s infrastructure constraints. Without timely action, further grid connection delays may trap us in dirtier energy technologies and prevent broader access to solutions that a clean energy future promises.