Electric power giant Hitachi Energy has just announced plans to invest an additional $4.5 billion by 2027 to expand the electricity grid.
Hitachi Energy invests big in grid expansion
According to the press release, Hitachi Energy will spend $4.5 billion more in various areas, including manufacturing, engineering, digital, Research & Development, and partnerships by 2027. This planned investment indicates a twofold increase from the last three years.
The announcement came after the disclosure of the $1.5 billion investment in April 2024, which will fund the company’s plan to accelerate global transformer production.
Its order backlog reportedly surged over three times to $30 billion+ since 2020. In May, it formally inked key HVDC framework deals with RTE in France, RWE in Germany, Marinus Link in Australia, and a service contract with Pattern Energy in the US for the SunZia Transmission Project. It also announced the Sa.Co.I.3 interconnection between Italy and France.
This tremendous backlog prompted the company to boost its investment in grid expansion across all its key markets from this year through 2027.
Accelerating renewable energy integration and improving grid reliability
Indeed, integrating more renewable energy like solar and wind power necessitates a reliable and flexible electric grid infrastructure.
As noted by Hitachi Energy CEO, the global electrification push substantially boosts the demand for innovative power grid systems.
“The world is in a race to transform energy systems. Technology is not the bottleneck and electrification is creating unprecedented demand for power grids systems combined with digital solutions and services. As the market leader, we are responding with an unprecedented level of investment, people, and innovation to meet that demand.”
Claudio Facchin, Hitachi Energy CEO
The company plans to install power electronics-based solutions, grid automation and software solutions, and services for its global portfolio. It will also produce high-voltage direct current (HVDC) and high-voltage products.
Other investments
Hitachi Energy also announced plans to invest approximately $330 million to expand and retool its flagship plant in Ludvika and a new campus in Vasteras, Sweden, across all product portfolios.
For context, the 120-year-old Ludvika factory produces transformers, high-voltage products, and HVDC systems. The company plans to expand this facility by over 30,000 sqm to support the production of large transformers for key HVDC projects.
Meanwhile, the new Vasteras campus will feature an R&D center and production plant for grid automation and employ 1,800 workers.
While such investments in clean energy are rapidly growing, the IEA warns of the potential barrier that the outdated electrical grids may cause. According to the IEA Report in October 2023, there is an urgent need for collaboration between governments and businesses to modernize grids to ensure they can handle the demands of the emerging clean energy economy. In this sense, grid modernization investments are now crucial to avoid potential limitations that could stall the clean energy transition.
