Siemens investing $510 mil in US electrical equipment manufacturing in 2023

Siemens said Nov. 3 that its overall investment in the US this year will reach $510 million, including investments in a manufacturing plant in Dallas-Fort Worth to help power American datacenters and critical infrastructure, as well as investments in battery plants, semiconductor facilities and electrical vehicle charging.

Through a $150 million investment, the Germany-based company's Fort Worth facility will enable "accelerated growth" of US data centers, which is being driven by "the exponential adoption of generative artificial intelligence," Siemens said in a statement.

Specifically, the "equipment being manufactured at the new Fort Worth plant is switchboards, which is electrical power infrastructure equipment for industrial plants, data centers, etc.," spokesperson Annie Satow said in an email.

Production at the new facility in Fort Worth is expected to start in 2024, gearing up for full operations in 2025, Siemens said.

This investment supports long-term customers in the data center space, where demand is expected to grow by around 10% annually through 2030, the company said.

Indeed, power demand from operational and currently planned datacenters in US power markets is expected to total about 30,694 MW once all the planned datacenters are operational, according to an analysis of data from 451 Research, which is part of S&P Global Market Intelligence. Investor-owned utilities are set to supply 20,619 MW of that capacity.

Dominion Energy serves the largest datacenter market in the world in Loudoun County, Virginia, about 30 miles west of Washington, DC. The Richmond, Virginia-headquartered investor-owned utility has pointed out that electricity demand from datacenters in Virginia increased by about 500% from 2013 to 2022.

Since 2019, 81 datacenters with a combined capacity of 3.5 GW have connected to Dominion's power system, the utility said in a late June presentation to Mid-Atlantic grid operator PJM Interconnection.

Additional manufacturing facilities

In addition, Siemens is investing in two electrical-products manufacturing plants in Grand Prairie, Texas, and Pomona, California, projects that will bring the overall investment in the US this year to $510 million, creating 1,700 jobs at Siemens, the company said.

These other facilities, Grand Prairie and Pomona, also produce switchboards along with circuit breakers, Satow said.

The Grand Prairie facility is already online and is going through an expansion that will be complete in 2024. The Pomona facility exists but will be replaced with a greenfield facility and construction will begin on that new plant in early 2024, she said.

And while these US manufacturing plants will not be geared toward building power transformers, there is currently a transformer shortage and supply-demand imbalance in the country for the equipment.

Lead times for transformers are often one to two years, so adding a large number in a brief time period "could be difficult and costly," ISO New England said in its draft 2050 Transmission Study.

Nonetheless, adding transformers throughout the New England system could likely relieve overloads and support reliability, the grid operator said.

Siemens Energy describes itself on its website as one of the leading transformer manufacturers worldwide, so it is possible the company could ramp up its capacity in the US in the future.

"There's never been a better time to invest in critical electrical infrastructure and green mobility to support the backbone of America's economy," Roland Busch, president and CEO of Siemens, said in the statement.

"The hardware and software we offer – produced through our expanded US manufacturing presence – will ensure that growing industries can meet demand while continuing to make progress in decarbonizing operations," Busch said, adding that "with this latest step, Siemens is delivering on its Eur2 billion global investment strategy for 2023."