As electricity demand rises, transformers have become one of the biggest barriers to expanding and modernizing America’s power system. FluxCo is working to solve that problem by helping buyers find the right suppliers in a fragmented global market.

In this CleanEcon Innovation Spotlight, FluxCo founder and CEO Brian Tochman explains why transformers are so important, what is making them so hard to get, and how a stronger transformer market could help the U.S. build a more reliable, affordable, and modern grid.

Most people think about the electric grid in terms of generation. But we rarely talk about transformers, which allow the power to actually be transported. Can you explain what transformers do in the grid and why they’re such an essential part of keeping the lights on?

They may not get much attention, but transformers are one of the most important pieces of infrastructure on the grid.

Transformers make the modern electric grid possible by stepping voltage up or down, allowing electricity to move efficiently over long distances and making it usable when it reaches homes and businesses.

Electricity loses energy when it travels long distances at low voltage. Transformers solve that problem by stepping voltage up for transmission at a power plant or generation site, and then stepping it back down where power is consumed at a home or business. Without transformers, electricity would be far more expensive, less efficient, and much harder to deliver reliably at scale.

FluxCo built a marketplace that connects transformer buyers with a global network of vetted manufacturers and found that there is strong demand on both sides. What makes the current market so inefficient, and why has no one solved this before?

For the last 30 years, U.S. electricity demand was pretty flat. Energy efficiency improvements, conservation efforts, and more efficient appliances helped keep growth in check. Because demand was stable, the grid was largely taken for granted, especially underlying components like transformers. So no one solved this before because it was a stagnant market and no one needed to. 

Today, that picture looks very different. A demand curve that was essentially flat for decades has become much steeper in a very short period of time, and greater demand for electricity means greater demand for transformers and other grid infrastructure. 

But the transformer market is highly distributed, largely overseas, and can feel like a Wild West for buyers. Companies that don’t have large procurement teams, supplier relationships, technical expertise, or the bandwidth to navigate manufacturers across Asia, Latin America, and other markets struggle to find and secure the best product, let alone at the best price. 

The buyer base has also changed. Historically, utilities were the main buyers of transformers. Now you have data center developers, hyperscalers, new commercial and industrial companies electrifying their facilities, and clean energy projects all trying to connect to the grid. They all need transformers. 

That’s where FluxCo comes in. We’ve mapped the global supply of transformers across more than 150 OEMs. A customer can come to us and say, “This is what I need.” We help translate that into the right technical specifications, then bid it out to the right suppliers for that project. The key is not just blasting it out to 150 suppliers. That is not efficient. We help direct the buyer to the right places, based on what they actually need.

The transformer shortage is already delaying clean energy projects and straining grid reliability across the country. How much of that bottleneck is a supply problem versus a procurement and information problem, and how would a more efficient marketplace accelerate progress not only for grid reliability, but also for America’s economic ambitions?

It’s both. If you look at the market today, current global capacity could satisfy a meaningful portion of current demand if buyers had better access to it. But it won’t solve the problem entirely. 

Transformer demand is growing at roughly 10 to 15 percent annually, and supply is not keeping pace. In the U.S., we’re already seeing lead times stretch into the 2030s. That affects clean energy projects, grid upgrades, data centers, and industrial facilities. The ripple effects across the economy are very real. 

Most transformers today also come from China or India. And while demand is surging for new transformers to meet growing electricity demand, America’s existing fleet is aging out, only compounding the supply pressure. 

So the reality is that we need both. A more efficient marketplace can make sure existing supply is used more effectively, but it’s also critical that we diversify our supply and build more capacity, especially here in the U.S.

Where do you think policy or market incentives could have the greatest impact in accelerating domestic transformer production and deployment? Are there specific levers, whether permitting, procurement, standards, or demand-side signals, that you believe would meaningfully move the needle?

To scale up transformer supply, it ultimately comes down to providing clearer long-term demand signals and making it easier to build manufacturing capacity and grid infrastructure in the U.S. 

Consistent, long-term visibility into grid investment gives manufacturers the confidence they need to deploy capital. When producers can see a reliable, multi-year horizon of projects, they can naturally justify investing in near-term capacity, particularly if the right economic incentives are there to help offset the massive up-front costs of building heavy industrial facilities.

At the same time, the hardware is only as good as our ability to deploy it, which is why updating the rules around building out infrastructure are just as critical. Streamlining the process helps clear the administrative backlogs that currently stall projects. 

A more predictable, modernized regulatory environment ensures that energy infrastructure can actually move from the factory floor to the field at the speed the market needs.

Looking ahead, what does success look like for FluxCo over the next several years, and what would a more resilient, modernized American grid ecosystem make possible for the country as a whole?

For FluxCo, success means expanding access to transformer supply at an impactful scale.

If the U.S. market represents roughly $22 billion in annual transformer demand, can we help match a substantial share of that demand with qualified supply? Can we help projects access transformers faster and, as a result, help deliver more electricity to meet our growing demand? That’s the goal.

But procurement is only one part of the challenge. If we want a more resilient and modern electric system, we need more than the physical transformers themselves. We need the supply chains, financing, service networks, and infrastructure that allow those assets to be deployed and supported effectively.

That is why FluxCo is focused on the full transformer lifecycle, from sourcing and financing to delivery, commissioning, installation, service, and long-term management.

At the national level, a stronger transformer ecosystem helps everything move faster. It helps clean energy projects connect to the grid, helps data centers secure clean power, helps industrial companies expand, and ultimately supports both energy reliability and economic growth.

That is what FluxCo is working to build.