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Hitachi Energy invests $140M to upgrade Que. transformer facility

Company has a 2030 target of achieving 80 per cent reduction in Scope 1 and 2 emissions

A transformer is transported by rail to Hitachi Energy's facility in Varennes, Que. (Courtesy Hitachi Energy)
A transformer is transported by rail to Hitachi Energy's facility in Varennes, Que. (Courtesy Hitachi Energy)

Hitachi Energy is investing $140 million to upgrade its power transformer facility in Varennes, Que. in order to meet accelerating demand for sustainable energy in the province and across North America.

The modernization of the Varennes plant will see the global energy giant build a state-of-the-art testing facility for large power transformers adjacent to its existing transformer manufacturing plant.

This will allow transformers coming off the Hitachi assembly line to be tested on-site, improving efficiency and effectiveness in the manufacturing process by the application of advanced new technology to its testing equipment.

In addition, Hitachi will build a pioneering high-voltage direct current (HVDC) engineering and design centre that will further enable the company to realize its long-term sustainable energy objectives. 

Hitachi's expansion plans for its Quebec operations are being partly funded by the provincial government via Investissement Quebec.

Hitachi Energy has set a 2030 target of achieving an 80 per cent reduction in Scope 1 and 2 absolute carbon emissions and a 55 per cent reduction in Scope 3 emission intensity.

Further, the company intends to be net-zero by 2050. Both Hitachi's 2030 and 2050 targets have been approved by the Science Based Targets initiative and include Scope 3 emissions, those generated across the company's value chain. 

Varennes upgrades will lead to vertically integrated facility 

The Varennes facility is Hitachi Energy’s leading manufacturing site for large-scale power transformers in North America, which play a critical role in supporting national and regional electric grids as well as renewable energy projects.

By adding to the technological capabilities of the Varennes plant, Hitachi is reinforcing its commitment to sustainable energy development in a province that has long been a world leader in hydro-electric power. 

Quebec government support for the project is part of the province's strategy to add 150 terawatt-hours of additional energy – approximately twice current consumption – to its electrical grid as part of a bid to achieve carbon neutrality by 2050.

The new Varennes transformer testing facility, expected to be completed by late 2027, will streamline the process by which Hitachi certifies the power transformers manufactured in Varennes prior to delivery to customers.

Previously, Hitachi would have to transport transformers by rail to be tested and certified at Hydro-Quebec's IREQ lab. But as a result of its new investment, the Varennes plant will become a fully vertically integrated facility.

Critical role played by transformers in energy chain

Transformers occupy a central role in the power value chain. Located at various points along the electric grid, transformers facilitate the efficient transmission and distribution of electricity across large distances. 

In Quebec, transformers have been essential to delivering the energy produced by massive hydroelectric power generating stations in the remote northern regions of the province to major southern urban centres, most notably, Montreal.

At each hydro generating station, the transformer steps up the voltage so it can be carried over a long distance. Additional transformers are needed to carry the energy downstream to every substation.

Today, transformers play an increasingly important role in advancing the process of decarbonizing our vast energy systems. Apart from their core function of connecting one energy grid to another, transformers provide the means for integrating new renewables like wind and solar into the grid.

"You need transformers at basically every connection point on a power grid," Christine Martin, government and institutional relations lead at Hitachi Energy, said in an interview with Sustainable Biz Canada.

"All the new energy projects that are being planned and which will bring wind turbines and solar plants into the grid are going to require transformers. Many of the over 2,000 transformers that have been manufactured at our Varennes plant since it was built in 1971 will at some point need to be replaced.

"That's something we mustn't forget if we want our energy network to continue to be reliable." 

Hitachi committed to making electric grids smarter

By providing solutions for grid network power management in the form of advanced control systems, Hitachi is paving the way for smart electric grids that more efficiently balance power output, usage and distribution of energy to where it is required. 

This enhanced grid flexibility allows for the smooth transition to a more diverse renewable energy mix in which wind and solar power can be more reliably integrated into the network.

While the Varennes facility will carry out advanced transformer testing as well as HVDC research, Hitachi is also injecting $10 million into its Montreal operations to develop advanced network control systems. 

The net impact of the investments will be to increase the stability of existing power grids by more efficiently balancing energy supply and fluctuations from new renewable sources that should lead to fewer disruptions and outages.

"Network control systems are critical to grid flexibility," Martin explained.

"In the case of wind turbine energy, when there's no more wind you have to switch back to hydro, and the same applies to the case of solar when you have less sun(light) . . . HVDC is one of those technologies that helps stabilize the network and avoids these imbalances created by these new renewables."

Hitachi investing $1.5 billion globally

Apart from its Varennes investment, Hitachi Energy also announced on April 24 it will invest over $1.5 billion to ramp up its global transformer manufacturing capacity to match rising energy demand and enable the company to carry out its long-term electrification strategy. 

Not only will this result in the gradual expansion of Hitachi's worldwide transformer capacity by 2027, it comes on the heels of the company's previously announced $3-billion investment in the electrification of the energy system as part of the road toward a net-zero energy grid.

"By strategically leveraging our global footprint, technology, and the expertise of our teams, we are not only poised to meet the global demand for sustainable energy solutions but also to drive the innovation necessary for a carbon-neutral future," Hitachi Transformers business director Bruno Melles said during a company event in Rome in late April.

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