Tariffs and supply chain dislocation hamper US power projects

Supply chain challenges have slowed US power sector growth since the Covid-19 pandemic disrupted global trade. Rising and unpredictable tariffs, combined with policy changes, are limiting both the availability and cost of critical materials and equipment. 

In our recent webinar, Power at a Price: Navigating Equipment Delays, Market Shifts & Supply Chain Shocks in 2025, we explored how these factors are shaping the sector’s ability to deliver new capacity. To download the full presentation - including detailed charts and in-depth analysis - fill out the form at the top of the page.

Supply chain strain and tariffs weigh on US power development 

Lead times for key equipment remain challenging. Generation step-up transformers (GSUs) and power transformers are the biggest bottlenecks, with delivery times still measured in years despite modest quarterly improvements. Pad-mount 3-phase transformers are also facing growing delays. 

Transformer prices have stabilised after large increases between 2021-24, though moderate rises are expected in the medium term. Strong demand from renewable build-out, data centres, EVs, and industrial onshoring could further worsen supply-demand imbalances over the next few years. 

Power transformer supply is projected to be 40% short this year, and GSU supply nearly 100% short, though both are expected to normalize by 2030. Long-term distribution transformer demand is set to rise 16% by 2034 due to aging infrastructure and extreme weather events. 

Gas turbine recovery 

Gas turbine demand is resurging to meet 24/7 electricity needs, particularly for data centres. Production cannot keep pace, and turbine prices have more than doubled in recent years, driving up CAPEX costs. 

Battery storage projects face risk from new Foreign Entity of Concern (FEOC) rules, which could disqualify projects with significant exposure to Chinese supply chains. Current tariffs have already raised storage project costs by 13.7%, utility solar by 10.4%, and wind by 8.5%.

US trade tariffs  

The latest round of tariffs, including increases on imports from Brazil, India, and copper, has pushed the average effective tariff to 23.5%, encouraging trade shifts toward lower-tariff regions like Taiwan and Indonesia. Wider US trade policy volatility continues to affect project planning and equipment costs.

Learn more 

For detailed charts, forecasts, and a deeper dive into these developments, fill out the form at the top of the page to download the full webinar slide deck: Power at a Price: Navigating Equipment Delays, Market Shifts & Supply Chain Shocks in 2025.