Hitachi Energy will expand its power transformer factory in Varennes, Que., after announcing a separate upgrade and modernization plan last year.Supplied
Japan’s Hitachi Ltd. is planning another expansion of its large power transformer factory in Varennes, Que., the second in 17 months, as demand for electricity continues to soar.
The company’s power grid equipment unit, Hitachi Energy, will spend $270-million to boost manufacturing output at the Varennes plant, according to information provided to The Globe and Mail ahead of an official announcement Monday. Varennes is an off-island suburb of Montreal on the south shore of the St. Lawrence River.
The investment is on top of a separate $140-million upgrade and modernization announced for the site in April, 2024. Together, Hitachi expects the projects to nearly triple annual production capacity and more than double employment at the site, to at least 900 people.
“Nobody I think predicted the increased demand the way we’re seeing it in the last two to three years,” said Carla Vicente, country managing director for Hitachi Energy Canada.
“With this expansion, we’ll be able to not only continue to serve our utility customers, including Hydro-Quebec, but also some industrial players... [which] maybe are struggling a little bit because of the capacity constraints.”
The investment highlights Canada’s efforts to bolster its energy sovereignty and secure the supply of key technologies to power its manufacturing base. The federal and Quebec governments are contributing a combined $26-million to the project.
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Provinces are increasingly discussing better electric grid interconnection in response to shifting U.S. trade policy, with B.C. and Alberta among those seeking to improve power ties. Hydro-Québec alone plans to build about 5,000 kilometres of new transmission lines within Quebec’s borders by 2035.
For Hitachi, it’s part of a larger US$9-billion global investment program – among the largest ever seen in the electrical industry – to build out its manufacturing and engineering operations. Earlier this month, the company announced it would spend US$1-billion to expand its operations in the U.S., which faces record demand for electricity in part from a rapid build-out of data centres to support artificial intelligence computing.
Hitachi is an electronics maker, known for a broad range of products from kitchen appliances to driverless trains. It’s also a major player in the energy space, strengthened by the purchase of ABB Ltd.’s power grids business in 2020. In addition to transformers, it makes breakers, switchgear and other electric equipment.
Large transformers are expensive pieces of machinery (prices start in the single-digit millions for one unit) that are typically as big as a two-storey home and weigh upwards of 100 tons. They’re used in electric systems to increase voltage levels for long-distance power transport or to lower the voltage when it’s distributed to businesses and homes.
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The Varennes factory designs and engineers a range of transformers, including transformers for static compensators and high-voltage direct current (HVDC) transmission systems, as well as nuclear power. Clients include Hydro-Québec and Bruce Power, the operator of the Bruce nuclear generating station on Lake Huron.
“We’ve demonstrated that we are ambitious, that we want to support our customers, that we want to be here and make sure that our local expertise continues to grow,” said Ms. Vicente.
Hitachi expects the facility to reach its full operational capacity by 2032.