US acts to ban Chinese bulk-power equipment

Recent action from the US to ban imported bulk-power equipment from certain nations could have a significant impact on already stressed supply chains, according to recent analysis from industry research group Wood Mackenzie.

Of the 24 nations potentially affected by US Executive Order 14420, China will bear the brunt of the ban, as it represents almost all bulk power imports since the beginning of 2025.

Wood Mackenzie’s research indicates that power transformers and substations are already in an estimated market shortage of 15% and 8%, respectively, in 2026, and restrictions on the use of Chinese-built units will increase these supply chain challenges.

The most affected market will be that for 100 MVA power transformers; this market has seen tremendous growth since 2023. For power transformers greater than 10 MVA, the market has expanded nearly 300% since 2020.

“Utilities have been largely avoiding Chinese suppliers since the first bulk power ban, and a bulk of the impacts will be centred around data centres who have been using Chinese units to minimise lead times,” said Ben Boucher, principal analyst, supply chain, for Wood Mackenzie.

“The 100 MVA+ segment is where the shortage is already most acute, and it is precisely where data centres have been turning to Chinese manufacturers to manage lead times,” Boucher added.

“However, an important uncertainty remains around the exact scope of the order — it is still unclear how the bulk power definition applies to data centre loads, which means the full extent of the impact on that segment of the market could look quite different depending on how the Department of Energy interprets and implements the rules over the next 120 days.”

Image credit: iStock.com/Sumala Chidchoi