Hitachi Energy doubles clean energy investment with $4.5b funding by 2027

Hitachi Energy will invest an additional $4.5 billion in manufacturing, engineering, digital, R&D and partnerships by 2027, doubling the investments done in the last three years. This complements the recently announced $1.5 billion investment in April this year to ramp up global transformer production.

These investments will enable the company to meet customers' commitments and market demand, increasing its global R&D, engineering and manufacturing capacity of transformers, high-voltage direct current (HVDC) and high-voltage products, the company said in a statement. It will also support the deployment of power electronics-based solutions, grid automation and software solutions, and services in line with the Hitachi Energy 2030 Plan.  Investments will also go into partnerships, supply chain, digitalisation and automation, which are enablers to support capacity expansion and increase speed to market.

Electrification is pivotal to achieving net-zero goals and the energy transition requires innovative software solutions and services and a significant increase in the production of critical technologies for an expanded electricity grid. Integrating more renewable energy sources like solar and wind, alongside meeting the electrification demands of transport, buildings, industry, and other sectors, necessitates a secure and flexible grid infrastructure.

According to IEA, the increased usage of Gen AI and the ever-growing quantity of digital data requires an expansion of data centers and the global electricity demand from data centers and AI could double towards 2026.

The company also announced on Monday that it is investing around $330 million to expand and modernise its flagship factory in Ludvika and a new campus in Vasteras, Sweden, across all product portfolios. The Ludvika factory, with over 120 years of innovation, manufactures transformers, high-voltage products and HVDC systems, and will expand by more than 30,000 square meters. This will especially enable new manufacturing capacity of large transformers to meet the deliveries of key HVDC projects. A new campus in Vasteras will accommodate 1,800 employees, including an R&D center and a state-of-the-art production facility for grid automation. The workforce in Sweden will additionally grow by 2,000 to support the accelerating energy transition.

“Electricity will be the backbone of the entire energy system and the change is happening faster than many thought possible. New business models, harmonisation of designs, along with partnerships are key drivers for the increase in the pace of change,” said Claudio Facchin, CEO, Hitachi Energy.

“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.”

Last month, key HVDC projects were announced that are urgently needed to meet rapidly growing market demand. Underpinned by new scalable business models pioneered by Hitachi Energy, framework agreements were signed with RTE in France, RWE in Germany, Marinus Link in Australia, in addition to a service contract with Pattern Energy in the US. The company also announced the Sa.Co.I.3 interconnection between Italy and France, another industry-leading multi-terminal solution.