Building Out the Power Grid: Large Power Transformers || Sept 25, 2026

Datacenters may be the tipping point, but let's remember the demands of electrification of transit adds to the demand.

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That was both information and colour overload. 😎

The US has one steel co which can supply significant quantities of the steel needed for large transformers: Cleveland Cliffs. It's stock continues to underperform - my guess, largely due to questions about management and apparently nepotism in promotions to high positions?

GE Vernova in Mass also makes the LPT's

Autobot's, Earth needs us roll out!

Aside from the obvious, I noted a lack of institutional knowledge in the government permitting staff at all levels. F'ing lovely.

I was inspired to create a dday Peter zeihan update, made for a good laugh.😆 Daily Geopolitical Update May 30, 1944 — Somewhere in Europe, everyone is about to have a very bad week Good morning, everybody. Today we’re going to talk about France. And specifically, why an absolutely absurd quantity of men, ships, aircraft, fuel, ammunition and canned meat is currently accumulating in southern England. Nobody officially knows what’s happening. Everybody knows what’s happening. The Allies are coming back to France. The interesting question isn’t whether. It’s where — and whether the Germans can do anything about it once they arrive. And to understand that, we need to talk about geography. The English Channel is doing something weird For most of history, the Channel has been Britain’s greatest strategic asset. It’s a moat. Napoleon couldn’t cross it. Hitler couldn’t cross it. But now the British and Americans are attempting something considerably more ridiculous: using the moat as a highway. Southern England has effectively become the world’s largest military warehouse. You’ve got roughly two million Allied personnel in Britain. You’ve got landing craft, artificial harbours, fuel pipelines, thousands of aircraft and enough naval firepower to make anyone standing near the French coastline reconsider their career choices. This is industrial warfare at a scale the Germans simply cannot reproduce anymore. And that’s the first thing to understand. The Germans still have an extremely dangerous army. But Germany is increasingly fighting an industrial coalition, and industrial coalitions become terrifying once they solve their logistics problems. The Americans have solved their logistics problems. Everyone is looking at Calais If you’re German, the obvious invasion point is Pas-de-Calais. It’s the shortest crossing. It’s close to British ports. And if you’re drawing arrows on a map in Berlin, it makes perfect sense. Which is precisely why the Allies have spent months convincing the Germans that’s where they’re going. They’ve created an entire fake army in southeastern England. Fake radio traffic. Fake equipment. Fake formations. And they’ve put George Patton — probably the Allied general the Germans respect most — in command of this imaginary force. The deception has become so elaborate that the Allies are essentially running a multinational military organisation whose principal logistical requirement is inflatable tanks. And the Germans appear to be buying it. That’s important because German reserves are the entire game. If the Allies get ashore somewhere else and Berlin continues expecting another invasion at Calais, those reserves don’t move. Every hour they don’t move makes the eventual Allied bridgehead harder to eliminate. The actual problem is Normandy Now look west. Normandy is worse for the Allies in almost every logistical sense. The crossing is longer. There isn’t a major port sitting conveniently on the beaches. The terrain inland is full of hedgerows, tiny roads and villages that are going to make mechanised warfare miserable. But Normandy has one enormous advantage: the Germans aren’t concentrating everything there. And once the Allies establish themselves, Germany has another problem. The Allies own the sky. Moving a German division during daylight is increasingly an excellent way to have fewer German trucks by sunset. Railways across northern France are being systematically hammered. Bridges are disappearing. Locomotives are disappearing. So the German reinforcement network is becoming slower exactly when speed matters most. And then there’s the Soviet Union Here’s the strategic nightmare for Berlin. Even if the Germans somehow throw an Anglo-American invasion back into the Channel, they don’t get to go home. There are millions of Soviet troops on the other side of Europe. The Red Army is preparing its own enormous summer offensive. Germany therefore has to defend France, Italy, the Balkans, Scandinavia and an Eastern Front stretching thousands of kilometres. The Americans, meanwhile, have the luxury of fighting Germany while simultaneously conducting an entirely separate oceanic war against Japan. That’s what industrial capacity does. Germany can still win battles. The problem is that the Allies can increasingly afford to lose battles. Germany cannot. The thing nobody talks about enough: fuel Germany’s strategic situation ultimately comes down to petroleum. Modern armies eat fuel. Tanks eat fuel. Aircraft eat fuel. Trucks eat fuel. And the Germans don’t have enough of it. The Allies do. The United States has access to an absolutely obscene amount of petroleum, and Allied control of the Atlantic means that petroleum can be transported to Britain. The Germans are increasingly dependent on Romanian oil and synthetic fuels — both vulnerable to Allied bombing. So even Germany’s ability to respond to an invasion is constrained by a very basic question: Can you actually put fuel in the vehicles? The Allies aren’t merely preparing to land soldiers in France. They’re preparing to establish an entire petroleum distribution system across the Channel. That’s the difference between conducting a raid and returning permanently. So what happens next? The weather is becoming one of the biggest variables. The Allies need tides, moonlight, manageable seas and acceptable visibility to line up simultaneously. And northern European weather does not particularly care about Dwight Eisenhower’s planning schedule. Whenever the invasion happens, the first 24 hours will be extraordinarily dangerous. Amphibious invasions are among the most complicated military operations humans attempt. Thousands of ships have to arrive in the correct places. Paratroopers have to land behind German positions. Engineers have to clear beach obstacles. Infantry has to get off exposed beaches. Armour has to follow. And then somebody has to start unloading mountains of ammunition, food and fuel before the Germans can organise a counterattack. If any major piece breaks, things can go very badly. But if the Allies establish a sustainable bridgehead, the mathematics start turning against Germany very quickly. Because behind the first Allied soldier is another soldier. Behind him is a truck. Behind the truck is a ship. Behind the ship is an American factory. And behind that factory is an industrial system the Germans have essentially no way of reaching. That’s the strategic problem Germany hasn’t solved. And sometime very soon, they’re probably going to have to deal with it on a beach in France. All right. That’s it for me. See you tomorrow.

Four hours to the WNW of you!

Peter/all - if you were in your late 20s and considering going back to school, what degree would you get and why? Just trying to decide with re-industrialization being the main issue of our generation.

I can underscore what Peter is saying. My company here in CA has a small hydro plant (about 12 MW). We have three turbines. They are at end-of-life. We want to replace them but, first we need to renew our FERC license which will back a debt issuance to pay for them. We also have another regulatory problem here in CA. The State is implementing regulations through the Bay-Delta Plan to block agencies updating their FERC license. Yes, I said block. They want to hold us hostage. But I digress as this is another topic… Back to turbines, there’s only a handful of companies that make them world-wide. The best are located in Europe and Japan. GE Vernova is the only US company on the top 10 list. But their turbines are made in … Canada! Aww, those dang Canadians! They’re our Americanizing the Americans. But wait, are they American’s too? Anyway, Peter is right. We’re a small generator. Nonetheless this issue is the same for small or large generators. Turbines and a lot of other heavy industrial equipment is simply not made in the US. That's why we have trade.

Planning? If it isn’t next week or next month, very few people with influence seem to care.

It's not just the transformers. They've always been the longest lead item, but now all of the equipment in the substation has crazy lead times. Circuit breakers are a year. Relay panels are a year. A cap switch is 80 weeks. Even the fittings on the aluminum, over-head bus are over a year. We can't build substations any faster unless someone starts making factories for our components.

Whew, for a second there I thought you were being airlifted out of the mountains!

I doubt your Transformer theory is correct. I suspect that transmission lines will be replaced by natural gas lines to feed to Bloom Energy systems ( stock symbol: BE; massive backlog of orders on a proven technology) . There for no need for transformers or energy loss due to long transmission distances. I would love your thoughts on this.. I did a quick AI on this thought and asked for the best way to invest in natural gas transmission. This is what I got: ..... darn patreon won't let me paste in the output...just cut and past this comment into your favorite AI engine

It’s much worse! For one example, grain oriented electrical steel. Not just the finished LPT but the stuff inside that makes it work is scarce. China has almost totally taken over this market and to enter the market is a 5+ year timeline and billions of dollars.

Well, we usually aim for five. Let me double check with Philip to see if he and Emily are getting off quite that soon cause you usually work till five.

The other issue is that these bloody transformers are mostly bespoke products. They're all custom jobs! There doesn't seem to be any meaningful standardization in the industry. That's a nightmare. It's better to envision what the future generation and transfer scheme should look like (and what current components fit) and then build toward that transition. Replacement as is would be the wrong choice, and a bit of a frankenstein mess.

The future... we arrived unready with $40 trillion in debt. Whose fault is that? Every day, I figure, most people go from sunup to sundown hammer locked on the past- servicing its obligations, debts, accrued habit, and prerogatives. No thought for the future. Pre-eminence belongs to the future-focused. If the nation wants development (it doesn't- it wants to chill and belly rub their doggies) it would advocate for eminent domain. It would badger Congress for change, but it doesn't. The youth would be in position to "rise up" but we systematically kneecapped their brains.

We aren't the only country needing equipment to expand. The OEMs must be drooling with backlogs and price demands.

There are solid state transformers too that are starting to be used. They are not the answer but are apart of the solution. Steel production and electrical transformers is just something we are going to have to put out backs into and make happen. The grid is a problem but it's not something we can really deal with until we get the steel industry up and going. At least there is progress being made there. Slower than it should be but steady.

I remember reading from 2009 to 2022 The United States did not necessarily need new power generation because we kept implementing more and more energy saving appliances. Basically, as we grew, our demand remained constant unfortunately, this eroded a lot of the buildout that we probably should have done in anticipation of eventually reaching the point where we would need to expand again. It is rather sickening that no one in the United States in either political party is willing to plan infrastructure projects that they will not be in office to take credit for at the end… We are led by people who do not believe in civilization, only individualism.

Thanks about the “avoid financial advice”, definitely slipped my mind. I agree with the slow solutions when government managed but I trust entrepreneurs (esp Elon Musk type and those with a vested interest in solving these kinds of problems).

Can you do atop ten of limiting factors (in terms of physical necessities like these transformers) for US building out of the industrial structures? What categories do you see for limitations (example, policy, workforce, trade issues, resources,energy etc) What do you see as “going away” and categories (global trade, loss of tech, trade goods, domestically produced goods, etc) and timelines for that. Sorry for the request for a semester of classes.

When I saw the picture I was pretty sure Peter had back problems again, glad to see that wasn't the case

Somebody is paying attention to Robert Bryce. Good on you! The "electrify everything" fantasy that so many on the left have fallen for would require even MORE power than what you're talking about here. Same problem BTW for the little transformers like the ones in front of every 5 or 6 suburban homes.

Interesting. How would you change your presentation if you were addressing 20 and 30-year-olds who will have to suffer the consequences as you described?

LPT! Hey you know me…

Didn't somewhere in Idaho just successfully create a portable nuclear reactor? Wouldn't these be ideal to power data centers?

BWX Technologies, Inc. (BWXT) is trading at $139.76 on the NYSE, down about 1.45% in recent trading sessions.Market OverviewCurrent Price: $139.76 USD52-Week Range: $138.62 – $241.82Market Capitalization: ~$12.71 BillionP/E Ratio (TTM): ~35.90Next Earnings Date: November 2, 2026Analyst OutlookRecent Actions: BNP Paribas Exane recently lowered its price target for BWXT from $190 to $165 while keeping a neutral rating.Consensus: The stock trades near the lower end of its 52-week range, but broader Wall Street targets remain higher, averaging above $213.

I love AI: The Department of Defense (DoD) "Mini Reactor" Program ImpactThe military's microreactor initiatives—namely Project Pele (led by the Strategic Capabilities Office and built by BWX Technologies to create a 1.5 MW mobile reactor) and the newly announced Janus Program (a $2.2 billion Army initiative contracting five vendors to build up to 20 base microreactors by 2028)—can significantly alleviate the grid distribution dilemma, though it shifts the paradigm entirely rather than fixing the LPT shortage directly.Here is how these mini-reactors bypass or assist the LPT bottleneck:[Traditional Central Generation] ──> Requires LPT (Bottleneck) ──> Long Transmission ──> End User [DoD Microreactor Program] ──> Distributed Generation ──> Local Grid/No LPT ──> End User Eliminating the Need for Transmission LPTs: LPTs are primarily needed to step up voltage for long-distance transmission across state lines, and then step it back down. Because microreactors (1–20 MW) generate electricity directly at the point of consumption (like a military base, data center, or remote community), they use distribution-level transformers instead of elusive, long-lead LPTs.Decoupling Critical Infrastructure from the Grid: By placing microreactors directly on-site at major defense installations (like Fort Liberty/Bragg or Fort Cavazos/Hood), the government removes massive baseload strains from the civilian grid. If a regional LPT fails on the public grid, these critical facilities remain entirely operational and "islanded" off-grid.Spurring a Domestic Component Supply Chain: The massive influx of federal funding ($2.2B for Janus) forces the maturation of the domestic nuclear and high-yield electrical equipment supply chains. The specialized materials (like electrical steel, advanced cooling systems, and containment alloys) cross over heavily with the manufacturing base needed to rebuild America's transformer sector.

I wonder if the DOD (now DOW) mini reactor program isn’t part of the solution here….

Economic Category and ETFsFrom an economic and financial perspective, LPT manufacturing falls under the major macroeconomic sector of Industrial Manufacturing, specifically categorized under the sub-industry of Electrical Equipment, Appliances, and Components (NAICS code 335311 - Power, Distribution, and Regulation Transformer Manufacturing).There is no single ETF exclusive only to power transformers, but they are heavily weighted within broader Clean Energy Grid and Industrial ETFs. The key funds holding these types of companies include:ETFCore ThemeTop Related HoldingsPays Dividends?Grid Infrastructure ETF (GRID)Global Smart Grid & InfrastructureGE Vernova, Schneider Electric, Siemens EnergyYes (Quarterly / Semi-Annually)Industrial Select Sector SPDR Fund (XLI)Broad US Industrial SectorGE Vernova, CaterpillarYes (Quarterly)Vanguard Industrials ETF (VIS)Broad US Industrial CoverageGE Vernova, Eaton Corp, Hubbell

These are the best PZ infomercials! They provide deep analysis of the problem with past current and future considerations. Where PZ, and others see the roadblock I look for the opportunity for ingenuity to overcome and adapt that allows me to invest early in problem solvers. Which US companies make LPT(they have a growth potential), same for the mid size transformer and international LPT companies. Then, what broad ETF cover these and pay dividends? Problems are opportunities for entrepreneurs!

Pete, this is off topic, but where in the world do you find quality sleeping pad and bag for your giant self? I’m 6-1 but my boys are early teens and have already caught me or passed me up and I can’t find sleeping bags big enough for them to not be head and shoulders out of already not to mention over the next couple years as they continue to grow.

Pillow Talk™️ with Zaddy Zeihan should be its own membership tier

Peter is correct. Furthermore, if you want to build a major transmission line from, say, Ohio to the Mid-Atlantic area, you need permits from Ohio, Pennsylvania, New Jersey, etc., as well as local governments. The same is true for gas pipelines, highways, etc. Add to that the fact that the U.S. depends on generation markets in many areas to provide adequate electricity supplies, which the market will do if the price is right. What could possibly go wrong?

I love the ambiance of today's very pertinent perspective,,,thanks Peter!