Left to right: Norbert Beatrix, HUB Manager, Europe, Transformers Business Unit, Hitachi Energy; Maxine Ghavi, Executive VP and Region Head, Europe, Hitachi Energy; Lisbeth Buschkühl, Senior Vice President Supply Chain and Chief Procurement Officer, E.ON; Thomas König, Chief Operating Officer – Networks, E.ON at the signing ceremony (Photo credit: Hitachi Energy)

Hitachi Energy has announced a new deal worth up to $700 m with E.ON to deliver transformers across the German energy grid to bolster energy security, resilience and affordability in the country. The deal is part of a new procurement initiative by E.ON for core grid expansion components. The project follows the recent German government elections, in which energy prices and reliability were a key concern among voters. More than 70 % cited rising living costs as their main concern, with energy prices at the forefront of this worry. Electricity demand in Germany is forecast to grow rapidly from 96 TWh in 2024 to 236 TWh by 2035, driven by AI, data centres and the electrification of key industries including vehicles, heat pumps and hydrogen.

There is currently a major global shortage of transformers, and Hitachi Energy, the world’s largest transformer manufacturer, is executing the largest investment plan in the global industry with $9 billion to scale up manufacturing capacity across the world. The company’s German operation is integral to the programme, having recently announced the expansion of its transformer factory in Bad Honnef. The company now has three key manufacturing sites in Bad Honnef, Brilon and Roigheim. 

It seems that the Bundesnetzagentur, and other German utilities and grid operators, urgently need transformers to prevent a delay in grid connections, blocks to new routing, and threats to ambitious expansion plans designed to support clean power and electrification. As part of the framework agreement with E.ON Hitachi Energy will deliver a considerable proportion of the transformers needed by reserving manufacturing capacity to support the accelerated expansion and modernisation of the power grid.

Hitachi Energy currently has over two million distribution transformers and tens of thousands of other transformers deployed worldwide. In high-voltage technology, one in every four high-voltage switchgear units in operation is from Hitachi Energy. The company is also the top supplier for offshore wind grid systems, connecting over 54 GW to the grid through its centres of excellence in Germany and Sweden.