Hitachi Energy, a subsidiary of Japan’s Hitachi, will invest $1 billion to expand U.S. power grid infrastructure manufacturing. The move comes as the United States faces record electricity demand driven by Big Tech’s rapid build-out of AI data centers.
Powering America’s AI Race
The Biden administration has underscored the urgent need to strengthen the country’s energy infrastructure to meet AI-related demand. U.S. Energy Secretary Chris Wright emphasized: “If we are going to win the AI race, reindustrialize, and keep the lights on, America is going to need a lot more reliable energy. Thankfully, Hitachi is delivering.”
The U.S. hosts the largest concentration of data centers in the world, and their energy usage is expected to triple within three years, consuming nearly 12 percent of domestic power supply. This surge is pushing utilities and private companies to ramp up investment in the long-neglected electrical grid.
Hitachi’s U.S. Investment Breakdown
Nearly half of the $1 billion commitment — $457 million — will fund a new power transformer manufacturing facility in South Boston, Virginia.
This facility will become the largest U.S. producer of large power transformers, which can be as big as a two-story house.
Construction will begin in 2025, with operations starting by 2028.
Andreas Schierenbeck, CEO of Hitachi Energy, said: “Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks.”
Hitachi will expand its breaker and switchgear manufacturing operations near Pittsburgh, Pennsylvania, strengthening its overall North American footprint.
Addressing Transformer Shortages
The COVID-19 pandemic severely disrupted global supply chains, leaving large power transformers in short supply. These massive components are essential for transporting electricity across regions. By producing transformers domestically, Hitachi aims to ease bottlenecks and support a more resilient U.S. grid.
Part of a Global $9 Billion Strategy
Hitachi’s U.S. commitment is part of a $9 billion global investment plan to expand its energy infrastructure and manufacturing capacity worldwide. The company has also secured a commitment from the White House to expedite new U.S. power component manufacturing projects.
While details remain undisclosed, Hitachi confirmed it is working closely with the White House on multiple infrastructure and energy initiatives, Reuters news report said.
Why This Matters
AI-driven data centers are reshaping electricity demand worldwide.
The U.S. is seeking to reduce dependence on foreign-made grid components.
Hitachi’s Virginia facility will directly boost domestic energy security and support AI industry growth.
Emerging U.S. Power Grid Infrastructure Trends and Updates
Surge in Natural Gas Projects Amid Renewable Slowdown
Recent data from Global Energy Monitor reveals that planned natural gas capacity in the U.S. has more than doubled over the past year, now exceeding 114,000 MW—the largest pipeline among power generation projects. Simultaneously, hydropower additions total 36,000 MW, and new nuclear expansion is nearly 8,000 MW. In contrast, solar and wind development is slowing, with the project pipeline shrinking from 186,000 MW in 2024 to 155,000 MW. However, capacity for battery storage is increasing, with 8,000 MW expected by year-end. Overall, clean energy’s portion of capacity is projected to grow from 39 percent to 44 percent, while natural gas remains dominant.
Texas Curtailment Law Targets Major Power Users
Texas passed Senate Bill 6, granting ERCOT the authority to require large power users—data centers, crypto mines, and industrial plants with usage of 75 MW or more—to switch to backup power or shut down during grid emergencies. This measure aims to prevent large users from jeopardizing grid reliability during crisis situations such as extreme weather events. The law applies only to new connections after December 31, 2025, and includes exemptions for existing critical infrastructure like hospitals.
Cancellation of Grain Belt Express Loan
In a controversial policy shift, the Trump administration canceled a $4.9 billion loan guarantee for the Grain Belt Express — a major 800-mile transmission line intended to deliver wind power from Kansas Midwest. The move, favoring fossil fuels over renewables, drew bipartisan criticism. Project supporters argue the line would have improved grid reliability, reduced energy costs, and supported AI data center growth.
Grid Operators Brace for Extreme Summer Heat
Grid operators across the U.S. have ramped up preparations to handle soaring demand driven by extreme temperatures and AI data center growth.
PJM anticipates peak demand reaching 154,000 MW, potentially surging to 166,000 MW, and is accelerating interconnection processes.
CAISO has added 25 GW of capacity—particularly in battery storage reaching 11 GW—but still warns of heat and wildfire risks.
ISO New England and MISO have updated auction models and pricing mechanisms to reflect grid stress and ensure reliability.
Reshaping of Consumer and Utility Cost Burdens
The explosive energy consumption by AI data centers — expected to rise from 4 percent in 2023 to 12 percent by 2028 — is straining the grid. Large tech firms are building private power plants and even selling surplus energy, impacting market dynamics. At the same time, rising costs are being shifted to small businesses and households, with residential electricity prices up over 30 percent since 2020, and projected to rise an additional 25 percent in states like Virginia by 2030. Regulatory debates are ongoing over how infrastructure costs should be allocated.
Baburajan Kizhakedath