# Copper and Transformers and power electronics

Large power transformers are wound with copper, and since 2019 a surge in grid and generation demand has pushed US power transformer prices up about 77% and lead times past two years, with copper and electrical steel among the supply constraints.

Source page: https://www.materialinsights.org/links/copper-and-transformers-and-power-electronics/

[Copper](https://www.materialinsights.org/commodities/copper/) (commodity) and [Transformers and power electronics](https://www.materialinsights.org/energy/e_power_electronics/) (energy): 4 relationships.

## How they are linked

### 1. Windings

*Physical flow · Strong · Copper → Transformers and power electronics*

A transformer changes voltage through coils wound round a steel core; copper's conductivity and mechanical strength keep losses low and let the windings withstand short-circuit forces.

- **about 2,200 lb** copper in transformers per MW of offshore wind capacity, about 1 t per MW (2011 study)

Copper per MVA varies widely with voltage, rating and loss design, so few public figures exist; the wind farm figure gives a sense of scale. Inverters and converters also use copper in busbars, inductors and cabling, but in much smaller amounts than large transformers.

Sources: [BBF Associates for Copper Development Association](https://www.copper.org/about/pressreleases/pdfs/wind_solar_study.pdf)

### 2. Aluminium in small units

*Substitution · Medium · Aluminium can replace copper*

Aluminium is cheaper and lighter but needs a larger cross-section, which makes the core bigger, so it suits small distribution transformers more than large power units.

- **below 190 kVA** rating under which aluminium was found the best winding choice
- **about 25% and 20%** lighter aluminium windings against more core weight

Large power transformers mostly use copper windings because of space and short-circuit strength, so copper is hardest to substitute in exactly the units that are now scarcest.

Sources: [IET Electric Power Applications (Olivares-Galván et al.)](https://research.engineering.nyu.edu/power/sites/engineering.nyu.edu.power/files/uploads/Selection of Copper against aluminium wiindings (published).pdf)

### 3. Transformer shortage

*Shared risk · Strong · Both ways*

Demand from grid upgrades, renewables and data centres has outrun factory capacity, and tight supplies of copper and grain-oriented electrical steel add to the delays.

- **77%** rise in US power transformer unit prices, 2019 to 2025 (Wood Mackenzie)
- **128 weeks** average power transformer lead time, Q2 2025 (Wood Mackenzie survey)
- **274%** rise in US demand for generator step-up transformers, 2019 to 2025

Some distribution transformer classes rose as much as 95% in price since 2019, and high capacity units can take up to four years to arrive. US tariffs of up to 50% on copper add to cost, so projects that need transformers face both metal and factory constraints.

Sources: [POWER Magazine](https://www.powermag.com/transformers-in-2026-shortage-scramble-or-self-inflicted-crisis); [pv magazine USA](https://pv-magazine-usa.com/2026/05/11/u-s-transformer-market-faces-severe-supply-constraints-as-lead-times-extend-to-four-years/)

### 4. Price link: windings

*Cost and price · Weak · Both ways*

Copper windings are a major material cost, but orders are priced well before delivery, often with metal adjustment clauses, so copper swings reach the price index slowly.

- **0.14** monthly change correlation
- **0.27** 12-month change correlation
- **0.67** fitted elasticity

The link is stronger over a year than a month, and the fitted elasticity of 0.67 is higher than for motors (0.41), cooling equipment (0.52) or distribution switchgear (0.56). Since 2019, the demand surge and factory capacity appear to have done more than copper to lift transformer prices.

Sources: [POWER Magazine](https://www.powermag.com/transformers-in-2026-shortage-scramble-or-self-inflicted-crisis); [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/energy/e_power_electronics/correlation/)

## For investors

### Key learnings

1. US power transformer prices rose about 77% since 2019 on a demand surge outrunning factory capacity, so makers with capacity have pricing power that can outweigh copper cost.
2. Large power transformers depend on copper windings, so copper is hard to design out of the scarcest grid equipment.
3. Lead times of over two years mean copper bought today is embedded in deliveries long after, making metal price clauses central to margins.

### What to track

- **Transformer lead times and prices**: Shows whether the shortage is easing or worsening (Quarterly · Wood Mackenzie surveys, utility filings)
- **Transformer maker order backlogs and capacity additions**: Future supply and pricing power (Quarterly · company results (Hitachi Energy, Siemens Energy, HD Hyundai Electric, CG Power))
- **Copper and grain-oriented electrical steel prices**: Input cost pressure on transformer makers (Monthly · LME and steel price assessments)

## For policymakers

### Key learnings

1. Average lead times of 128 weeks for power transformers in 2025 make transformer supply a binding constraint on grid and renewable plans.
2. Domestic capacity in transformers, copper winding wire and electrical steel is a strategic asset when imports face shortages and tariffs.
3. Standard designs and bulk procurement by utilities can shorten queues and let makers plan copper and steel purchases.

### What to track

- **Transformer delivery times on public tenders**: Early warning of grid project delays (Quarterly · utility and ministry procurement data)
- **Imports of transformers and electrical steel**: Dependence on foreign supply for critical grid equipment (Monthly · Ministry of Commerce trade data)

## Sources

1. [Market Study: Current and Projected Wind and Solar Renewable Electric Generating Capacity and Resulting Copper Demand](https://www.copper.org/about/pressreleases/pdfs/wind_solar_study.pdf), BBF Associates for Copper Development Association (2011)
2. [Selection of copper against aluminium windings for distribution transformers](https://research.engineering.nyu.edu/power/sites/engineering.nyu.edu.power/files/uploads/Selection of Copper against aluminium wiindings (published).pdf), IET Electric Power Applications (Olivares-Galván et al.) (2010)
3. [Transformers in 2026: shortage, scramble, or self-inflicted crisis?](https://www.powermag.com/transformers-in-2026-shortage-scramble-or-self-inflicted-crisis), POWER Magazine (2026)
4. [U.S. transformer market faces severe supply constraints as lead times extend to four years](https://pv-magazine-usa.com/2026/05/11/u-s-transformer-market-faces-severe-supply-constraints-as-lead-times-extend-to-four-years/), pv magazine USA (2026)
5. [Price correlation, Material Insights](https://www.materialinsights.org/energy/e_power_electronics/correlation/), Material Insights (World Bank, FRED, IMF data)