Europe runs out of transformers: AI and electric cars push to the limit

What happened?

Europe is experiencing an unprecedented shortage of electrical transformers, the devices that regulate voltage on the grid. According to an analysis by R. Badillo in El Confidencial (July 2026), delivery times have skyrocketed from the usual 6-12 months before 2020 to between 24 and 48 months. The cause is a perfect storm: the explosion of data centers for artificial intelligence, the growth of electric vehicles, and the renovation of an aging electrical grid. The IEA warned as early as 2024 that global transformer production was barely growing at 4% annually, while demand was soaring above 10%. In 2026, manufacturing capacity remains stagnant, while orders for large transformers have doubled in just two years.

Why is it important?

Without transformers, new renewable plants, data centers, and factories cannot be connected. The International Energy Agency (IEA) warned in 2024 that transformer production was not keeping pace with demand. Now, the bottleneck threatens to paralyze key projects for the energy transition and European industrial competitiveness. A 2025 BloombergNEF report estimated that the transformer deficit could delay the connection of up to 200 GW of renewable capacity in Europe by 2030, equivalent to the consumption of 60 million homes. Additionally, dependence on Asian manufacturers (China and South Korea account for over 60% of global production) exposes Europe to geopolitical and supply chain risks.

Causes of the bottleneck

AI data centers

A single AI data center can consume several hundred megawatts, equivalent to a medium-sized city. Each requires high-voltage substations with large-capacity transformers. Demand has surged in 2025-2026: according to Synergy Research data, data center capacity in Europe grew 35% year-on-year in 2025, with another 40% expected in 2026. Companies like Microsoft, Google, and Amazon have announced multi-billion-dollar investments in Europe but face waiting times of up to four years for the necessary transformers. This has led some tech firms to consider building their own substations, a costly and slow solution.

Aging grid

Much of Europe's electrical infrastructure is between 30 and 50 years old. The massive renovation of substations competes with new connections, saturating manufacturers. According to the European Commission, over €500 billion in grid investment is needed by 2030, a significant portion of which corresponds to transformers. However, current production capacity barely covers 60% of projected demand. Germany, for example, has over 30,000 distribution transformers older than 40 years, according to grid operator Tennet.

Scarce materials

Transformers depend on grain-oriented electrical steel, a material with strict EU efficiency criteria. The price of copper, a shortage of skilled labor, and limited testing facility capacity exacerbate the problem. Grain-oriented steel is mainly produced in China, Japan, and South Korea, and its supply has been affected by trade tensions. Additionally, European energy efficiency regulations require high-performance transformers, reducing the number of qualified suppliers. European manufacturers like Siemens Energy and ABB have increased production, but a lack of specialized technicians in winding and assembly limits expansion.

Immediate consequences

• Blackouts: Without spare transformers, any breakdown can leave entire areas without power for weeks. In 2025, a transformer failure in southern Spain caused intermittent outages for 10 days, and replacement took six months. Grid operators like REE (Red Eléctrica de España) have warned that the lack of backup equipment increases the risk of blackouts in summer, when air conditioning demand adds to industrial demand.
• Industrial delays: New factories, data centers, and renewable parks can be paralyzed for years. In the Netherlands, the connection of a 1.5 GW offshore wind farm has been delayed 18 months due to a lack of transformers. In Germany, several industrial electrification projects (such as green steel production) are on hold. The European Electricity Industry Association (Eurelectric) estimates that 40% of renewable energy projects in the pipeline could face significant delays.
• Inflation: Rising costs and lead times are passed on to electricity and product prices. The price of a large power transformer has risen 50% since 2020, according to IEA data. Power companies are passing these costs on to supply contracts, making electricity more expensive for end consumers. Additionally, delays in connecting renewables force the continued use of gas and coal plants, raising emissions and CO2 prices.

What readers should know

The crisis is not temporary. Investments in new transformer factories, technician training, and supplier diversification are needed. Meanwhile, Europe must prioritize projects and manage demand. Artificial intelligence and electric cars not only consume energy: they consume the components to distribute it. The European Commission has announced an emergency plan to accelerate permits for new manufacturing plants and has created a task force with the IEA to monitor the supply chain. However, new factories will take at least three years to become operational. Until then, competition for transformers will be fierce, and the most profitable projects (such as hyperscale data centers) could corner the supply, leaving renewables and industrial electrization out. The long-term solution lies in design standardization, investment in material recycling, and international cooperation to expand production. Meanwhile, every new data center or electric vehicle connected increases pressure on a system already at its limit.