U.S. Energy Infrastructure Boost: Hitachi’s $1 Billion Investment to Power Data Centers and AI Development
Hitachi Energy will expand its grid infrastructure in the U.S. by another $1 billion in a new investment in line with the Trump Administration’s goal to improve the power grid for coming data center and artificial intelligence technology growth.
Nearly half of that $1 billion will be spent on building a new utility-scale power transformer manufacturing plant in Virginia, the state with the biggest recent growth in data center capacity.
“The United States is a key market for Hitachi, and this investment reflects our commitment to powering America's energy future to meet the accelerating demands for reliable and sustainable solutions to benefit the nation,” Toshiaki Tokunaga, president and CEO of the global parent Hitachi Ltd, said in a statement. “Leveraging our expertise in IT, operational technology, and advanced products, we are supporting American manufacturing, the development of critical infrastructure, and the rapid expansion of data centers driven by AI adoption.”
The looming AI energy supply crisis
Forecasts vary, but most predictions by Goldman Sachs, Deloitte and others indicate that the race for AI dominance and continued growth of cloud-based computing will add perhaps 125 GW of new load on the American grid.
At the same time, earlier this year the American Society of Civil Engineers released its quadrennial infrastructure scorecard which graded U.S. energy infrastructure at a D+, estimating the nation was close to $1 trillion behind in necessary upgrade and capital investment.
Producing large power transformers will contribute to upgrades in high-voltage transmission, expanded power generation capacity, industrial and AI data centers. A single AI-enabled data center can consume hundreds of megawatts, and total global data center consumption is estimated at several hundred-terawatt hours per year and getting more intense every year.
“Particularly at this critical moment for our growing energy demands, I’m excited to see Hitachi Energy expand their Virginia footprint, create hundreds of good-paying jobs in South Boston, and promote American energy security,” said U.S. Senator Mark Warner. “At the local level, this is a great investment in Southside Virginia’s economy and manufacturing industry. At the state and national level, this is an important strategic step to ensure we have the power needed to service our communities, businesses, and growing AI industry. I’m thrilled to see Hitachi Energy bring this important project home to South Boston.”
The $457 million Hitachi power transformer manufacturing plant will be constructed alongside the company’s existing campus in South Boston, Virginia. It is expected to create more than 800 new jobs in the region.
Making T&D delivery more impactful
Large-scale power transformers step voltages up and down and enable electricity delivery over long distances. A report by research firm Wood Mackenzie estimated that demand for power transmission and distribution transformers has grown by as much as 100% this decade—although that demand surge is shackled by global supply chain shortages.
Earlier this summer, the Trump White House released its mission statement on “Winning the Race: America’s AI Action Plan.” The document stressed that the U.S. must remove red tape from regulatory delays and power interconnection queues to facilitate domestic power generation and infrastructure to support AI growth.
“Today, a new frontier of scientific discovery lies before us, defined by transformative technologies such as artificial intelligence,” the White House document quotes President Trump. “Breakthroughs in these fields have the potential to reshape the global balance of power, spark entirely new industries, and revolutionize the way we live and work. As our global competitors race to exploit these technologies, it is a national security imperative for the United States to achieve and maintain unquestioned and unchallenged global technological dominance. To secure our future, we must harness the full power of American innovation.”
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About the Author
Rod Walton, EnergyTech Managing Editor
Managing Editor
For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
Rod Walton has spent 17 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.
Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World.
EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.