Tim Mills, CEO of ERMCO, discusses the capital requirements and equipment lead times that prevent rapid manufacturing capacity expansion during the electric transformer shortage.
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“And then if you really had no equipment availability, and you had to add a new facility or a new line, you're talking hundreds of millions of dollars, well, hundred million dollars of investment in order to get that facility stood up. And then the lead time to get all the equipment, and so you're talking a one to two year turn just to get starting with production, and then it's about ramping that facility up.”
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More from Tim Mills
AssertionNot checkable as stated
Mills: Early US transformer shortage was driven by utility panic-buying
“But this wasn't, this was not the microchip problem, right? That was preventing automobiles from being produced, where, where literally you couldn't get the Componentry, the necessary input to produce the output. This was the toilet paper example, right? Where…”
Tim MillsFeb 22, 2024▶ 13:26The electric transformer shortage
PredictionHeld up
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“They asked for public, the Department of Energy asked for public comment, and I think there was enough out there and enough concern expressed that I suspect a compromise position is going to come out. I don't think what they had originally released will actual…”
Tim MillsFeb 22, 2024▶ 26:13The electric transformer shortage
AssertionSupported
Mills: Pad-mounted transformer lead times reach as long as two years
“But those pad bound transformers, both single phase and three phase, still pretty darn long. I've seen things as long as two years right now on either.”
Tim MillsFeb 22, 2024▶ 7:48The electric transformer shortage
PredictionNot checkable as stated
Mills: Three-phase transformer shortage will last another 12 to 24 months
“I think the single phase pole problem is nearing the end of the line.
and then I think the single phase pad and three phase problem is probably going to be a little bit painful for the next 12 to 24 months, but then I think we're going to get to a period of s…”
Tim MillsFeb 22, 2024▶ 30:24The electric transformer shortage
AssertionSupported
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Tim MillsFeb 22, 2024▶ 7:27The electric transformer shortage
AssertionSupported
Mills: US transformer manufacturing capacity was likely flat from 2007 to 2021
“My gut tells me if you looked at the total capacity in the U.S. For building a transformer in 20 or 2007 versus 20 21, it was probably constant.”
Tim MillsFeb 22, 2024▶ 9:34The electric transformer shortage
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