Supply-Chain Woes for Transformers Worry U.S. T&D Providers

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Researched by Industrial Info Resources (Sugar Land, Texas)--Supply-chain issues are having a withering effect on the market for electrical transformers and other transmission and distribution (T&D) equipment, causing numerous T&D projects across the U.S. and Canada to be delayed. Industrial Info is tracking more than 2,000 active projects in the U.S. and Canadian T&D sectors.

Supply-chain issues already were roiling the transformer market before COVID-19, with lead times for deliveries sometimes running five to seven months. Following the pandemic, supply-chain delays increased significantly, sometimes from 50% to 100%.

This issue has only worsened in certain areas of the T&D marketplace. By December, utilities around the country were reporting transformer shortages, often citing weather-related events, natural disasters, and ongoing production delays. System owners warned this would cause delays or cancelations to projects on their books.

A February article in T&D World quoted an official at Otter Trail Corporation (NASDAQ:OTTR) (Fergus Falls, Minnesota) who said the company would delay some of its underground projects, due to long lead times for pad-mounted distribution transformers. The transmission sector also is reporting project delays due to supply chain issues, with some developers and utilities now looking overseas for transformers.

Last week, Sacramento Municipal Utilities District (SMUD), which serves more than 600,000 residents and businesses and owns about 10,000 miles of power lines within Sacramento, Placer and Yolo counties, released a pre-bid announcement for two contract requests for more than $124 million in substation equipment for transmission and distribution projects. The proposed five-year contracts call for $100 million worth of substation transformers and $24 million in substation switchgear for the distribution sector.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed reports for active projects from SMUD.

Supply-chain disruptions in the transformer and electrical equipment markets also have affected the generation side of the Power Industry. When coupled with an ongoing shortage of photovoltaic solar panels, this only compounds the supply-chain issues on the renewable side.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).