I feel like we have to be talking about really small dollar amounts for there to be no significant regulatory barrier, a 2 year backlog, and prices rising 50-80%.
Indeed, asking o3, it says 50+ Mva transformers go for $3-5M and 100+ go for $5-8M, and if you're only buying 500 of those a year, the whole US transformer industry is ~$2-4B in spend, aka a Congressman's sneeze routinely causes more spending than that.
But with overall spend so low and strategic importance so high, I don't understand why we can't just guarantee a price for any domestic transformers that's twice as high as anywhere else, and wait for somebody (Palmer Luckey, probably) to take that opportunity and produce them domestically.
Utility analyst here--notionally, that would work. The problem is that someone has to actually do that. And then it would take 5-10 years to solve the problem long-term, because you have to spin up new GOES mills, train up new engineering and machining staff, and run the manufacturing long enough to pay back the capex.
The technology is nothing special, but the supply chain has completely atrophied and needs to be rebuilt from scratch.
I feel like we have to be talking about really small dollar amounts for there to be no significant regulatory barrier, a 2 year backlog, and prices rising 50-80%.
Indeed, asking o3, it says 50+ Mva transformers go for $3-5M and 100+ go for $5-8M, and if you're only buying 500 of those a year, the whole US transformer industry is ~$2-4B in spend, aka a Congressman's sneeze routinely causes more spending than that.
But with overall spend so low and strategic importance so high, I don't understand why we can't just guarantee a price for any domestic transformers that's twice as high as anywhere else, and wait for somebody (Palmer Luckey, probably) to take that opportunity and produce them domestically.
Utility analyst here--notionally, that would work. The problem is that someone has to actually do that. And then it would take 5-10 years to solve the problem long-term, because you have to spin up new GOES mills, train up new engineering and machining staff, and run the manufacturing long enough to pay back the capex.
The technology is nothing special, but the supply chain has completely atrophied and needs to be rebuilt from scratch.
Fabulous write up! Keep up the good work!