Inside Hitachi Energy & E.ON's $700m Procurement Initiative

Hitachi Energy and E.ON are teaming up on a procurement initiative worth up to US$700m aimed at transforming the energy grid in Germany – boosting energy security, resilience and affordability. 

As part of the long-term agreement, Hitachi Energy will leverage its footprint, investments and partnerships to reserve capacity and lead industry efforts to address the global shortage in transformers, a critical component of power grid infrastructure.

Germany's energy concerns

Prices and reliability dominate the conversation in Germany when it comes to energy.

Seven in 10 Germans state that the rising cost of living is their main political concern, with energy prices at the forefront of this concern.

Transformers are vital to the efficient transmission and distribution of electricity, but a shortage across the world persists.

Hitachi Energy has responded with a significant investment plan, pumping US$9bn into scaling up manufacturing capacity across the globe.

Preventing a delay in grid connections

Hitachi Energy is the world leader in transformers, with more than two million distribution transformers and tens of thousands of other transformers deployed worldwide. In high-voltage technology, one in every four high-voltage switchgear units in operation is produced by Hitachi Energy.

Germany represents a vital cog in this machine. The organisation employs more than 2,000 people across eight locations, including Bad Honnef, where it is currently expanding a transformer factory.

The Bundesnetzagentur (Federal Network Agency), not to mention other German utilities and grid operators, urgently need transformers to prevent a delay in grid connections, blocks to new routing and threats to ambitious expansion plans designed to support clean power and electrification. 

Thanks to a framework agreement with E.ON, Hitachi Energy will deliver a considerable proportion of the required transformers by reserving manufacturing capacity to support the accelerated expansion and modernisation of the German power grid.

Partnerships is this domain are not new to E.ON, which is also working with Prysmian to drive the green energy transition across Europe.

Delivering critical equipment

Andreas Schierenbeck, CEO of Hitachi Energy, says power grids demand "bold investments and breakthrough innovations to shape the energy systems of the future". 

He adds: "Our expansion goes beyond business – it reflects our responsibility as a global leader to accelerate capacity and deliver the critical equipment our customers urgently need.

"Strategic partnerships like this one empower TSOs, utilities, and industry to build a more sustainable, secure, resilient and affordable energy system for Germany."

Hitachi Energy pioneered high-voltage direct current (HVDC) technology and remains the global market leader, having deployed over 150 GW of capacity worldwide – equivalent to powering two-thirds of Europe's residential sector.

The company dominates offshore wind grid integration, with more than 54 GW connected through specialised facilities in Germany and Sweden. 

Additionally, Hitachi Energy's grid automation technologies serve half of the world's 250 largest utilities, cementing its position as a critical infrastructure partner in the global energy transition.