The push for EVs and renewables is fueling transformer shortages and “staggering” increases in utility product costs. Consumers will be stuck with the bill.
This relevant article by veteran energy professional Donn Dears focuses on the security risks of offshoring production of "Tier 1" very large transformers at substations and large generators:
Demand for transformers is up, so prices are up. More at 11.
The trouble is there's no competitive market, and everyone wants to blame something else. But until the people of Tennessee decide they don't want the TVA, not sure where the competitive market for grid transformers is. We've got a bunch of regional monopolies and the complaints here would be better put at the feet of all these people you talk to in the industry that want to blame something else.
Yeah, ideological capture affects us all. And once reason becomes secondary to a chosen position it's very difficult to shake that loose. I see it in everyone including myself.
Important stuff here, Robert. Thank you for your voice. insights and leadership. Heard today: "Utilities are - effectively - a tax on people and businesses". Higher energy volatility = prices power ahead. CFOs at commercial and industrial cos w/ high-energy use need new "Power Operations Strategy", teams & services to make sense of REC, PPAs, wholesale power, audits +. Are you seeing companies who are prepared/preparing intelligently, meaning addressing the "green" that $hareholder$ care about and the "green" initiatives that the sustainability/stakeholder folks care about?
We have a Strategic Petroleum Reserve to guard against political, economic, weather, and wartime upsets in this crucial energy source. We are bare naked to upsets to the crucial electric power transmission and distribution source. We need to build inventories of transformers and switchgear, both for resilience and for rising power demand, along with more domestic manufacturing capacity.
Too many politicians think electricity can be delivered wirelessly like a cell phone signal. If you polled them about where most power comes from, the leading answers would be "wind," "solar," and "the plug on the wall."
My dad gave me my first pun when I was twelve years old: "Never start a vast project with half-vast plans."
The Greta Green Energy Transition dwarfs the Apollo program, the Interstate Highway System, and Johnson's War on Poverty and Great Society, combined.
I asked politicians from county to Federal, and the DOE, for a copy of the report of the comprehensive quantitative life-cycle system engineering study of the transition. Nobody was even polite enough to reply "We do not have such a report."
The transition is impossible. I wrote a little bit about this in articles at https://vsnyder.substack.com, mostly summarizing other's works.
Very nice article. These types of government mandated cost increases and inefficiencies are rampant throughout every industry and sub-sector. Just imagine how much we could do to get inflation under control if we had an administration that made it a focus to get rid of, or at least prune back, the useless, cost increasing, efficiency killing, rapacious regulatory state?
Mr. Bryce, thank you for a nicely written discussion on utility prices, but I have a question. Early in your piece, you reference an editorial earlier this week from the Wall Street Journal about the "true" cost of the IRA. That editorial, which I also studied, referenced a report from Goldman Sachs describing their research.
My question is this: Do you have a direct reference to the Goldman Sachs report? In my studies, I prefer to use direct evidence rather than 2nd party.
I live in a new development. New transformers, underground wires, fed by a looped 12kv circuit out of a single unit 3 phase 60 kV substation 5 miles away. If all my neighbors buy an electric car, every piece of wire, every transformer will need to be replaced, the circuit to the substation will need to be re-conductored and the substation will need to be enlarged and another unit added. I don’t know about the HV feeder to the sub.
Apparently with costs and lead limes we should order the equipment now.
I’m seeing this exact thing in my industry. I work in the industrial chemical sector on the gulf coast and lead time on a 3-phase transformer bank (pole mounted) is 10-12 months! Not too long ago it was about 1-2 months and now we’re being forced to get very creative. It’s the same story with a prefabricated substation we are procuring that has a lead time of about 80 weeks. It has made my job quite difficult and will not stop if the push for electrification continues without any reality. Thanks for your reporting, sir!
Good article describing what is in store for us over the next few years. It prove once again, bureaucracy is not your friend. The overzealous scheme to save a particle of carbon at any price is the most fiscally destructive mythology our world has ever seen, better said as 'the most fiscally destruct the public has yet to grasp. If we did see it, our voting pattern might be altered a bit. And we'd see Al Gore on the comer with a tin cup.
This relevant article by veteran energy professional Donn Dears focuses on the security risks of offshoring production of "Tier 1" very large transformers at substations and large generators:
Are Transformers a National Security Risk?
https://ddears.com/2023/04/04/are-transformers-a-national-security-risk/#comment-7816
April 4, 2023
Please also read the 14 comments posted in only 3 days.
Perfection is the enemy of the good!
Demand for transformers is up, so prices are up. More at 11.
The trouble is there's no competitive market, and everyone wants to blame something else. But until the people of Tennessee decide they don't want the TVA, not sure where the competitive market for grid transformers is. We've got a bunch of regional monopolies and the complaints here would be better put at the feet of all these people you talk to in the industry that want to blame something else.
Yeah, ideological capture affects us all. And once reason becomes secondary to a chosen position it's very difficult to shake that loose. I see it in everyone including myself.
Important stuff here, Robert. Thank you for your voice. insights and leadership. Heard today: "Utilities are - effectively - a tax on people and businesses". Higher energy volatility = prices power ahead. CFOs at commercial and industrial cos w/ high-energy use need new "Power Operations Strategy", teams & services to make sense of REC, PPAs, wholesale power, audits +. Are you seeing companies who are prepared/preparing intelligently, meaning addressing the "green" that $hareholder$ care about and the "green" initiatives that the sustainability/stakeholder folks care about?
We have a Strategic Petroleum Reserve to guard against political, economic, weather, and wartime upsets in this crucial energy source. We are bare naked to upsets to the crucial electric power transmission and distribution source. We need to build inventories of transformers and switchgear, both for resilience and for rising power demand, along with more domestic manufacturing capacity.
Too many politicians think electricity can be delivered wirelessly like a cell phone signal. If you polled them about where most power comes from, the leading answers would be "wind," "solar," and "the plug on the wall."
My dad gave me my first pun when I was twelve years old: "Never start a vast project with half-vast plans."
The Greta Green Energy Transition dwarfs the Apollo program, the Interstate Highway System, and Johnson's War on Poverty and Great Society, combined.
I asked politicians from county to Federal, and the DOE, for a copy of the report of the comprehensive quantitative life-cycle system engineering study of the transition. Nobody was even polite enough to reply "We do not have such a report."
The transition is impossible. I wrote a little bit about this in articles at https://vsnyder.substack.com, mostly summarizing other's works.
Very nice article. These types of government mandated cost increases and inefficiencies are rampant throughout every industry and sub-sector. Just imagine how much we could do to get inflation under control if we had an administration that made it a focus to get rid of, or at least prune back, the useless, cost increasing, efficiency killing, rapacious regulatory state?
Mr. Bryce, thank you for a nicely written discussion on utility prices, but I have a question. Early in your piece, you reference an editorial earlier this week from the Wall Street Journal about the "true" cost of the IRA. That editorial, which I also studied, referenced a report from Goldman Sachs describing their research.
My question is this: Do you have a direct reference to the Goldman Sachs report? In my studies, I prefer to use direct evidence rather than 2nd party.
Thank you.
Nice piece Robert. It’ll get noticed.
I live in a new development. New transformers, underground wires, fed by a looped 12kv circuit out of a single unit 3 phase 60 kV substation 5 miles away. If all my neighbors buy an electric car, every piece of wire, every transformer will need to be replaced, the circuit to the substation will need to be re-conductored and the substation will need to be enlarged and another unit added. I don’t know about the HV feeder to the sub.
Apparently with costs and lead limes we should order the equipment now.
Very well written and I love how you explained some of the technical challenges.
The bottom line is this: the ‘green’ transition is a politically mandated, centralized planned and designed to reshape the entire economy.
History shows that never works and always backfires.
I’m seeing this exact thing in my industry. I work in the industrial chemical sector on the gulf coast and lead time on a 3-phase transformer bank (pole mounted) is 10-12 months! Not too long ago it was about 1-2 months and now we’re being forced to get very creative. It’s the same story with a prefabricated substation we are procuring that has a lead time of about 80 weeks. It has made my job quite difficult and will not stop if the push for electrification continues without any reality. Thanks for your reporting, sir!
Have you ever known IOU's to be philanthropic organizations?
I default back to The First Law of Thermodynamics :
Energy Cannot be Created or Destroyed, only Transformed.
In this case, there is a pun.
The "Renewables Crowd" ignores the basic laws of physics and thermodynamics, which is creating a fiasco of unprecedented proportions.
Good article describing what is in store for us over the next few years. It prove once again, bureaucracy is not your friend. The overzealous scheme to save a particle of carbon at any price is the most fiscally destructive mythology our world has ever seen, better said as 'the most fiscally destruct the public has yet to grasp. If we did see it, our voting pattern might be altered a bit. And we'd see Al Gore on the comer with a tin cup.