> ## Content Index > Fetch the complete content index at: https://www.nastycanuck.ca/llms.txt > Use this file to discover other available public pages before exploring further. # Canada’s Grid Needs Transformers. Hitachi Is Betting on Wood Fibre. - URL: https://www.nastycanuck.ca/hitachi-transformer-insulation-wood-fibre-canada/ - Published: 2026-10-21T12:46:43.000Z - Updated: 2026-10-21T13:08:34.000Z - Description: A planned $479-million factory in London, Ontario, would turn wood fibre into transformer insulation. The test is whether Canadian suppliers, workers and grid builders benefit when production begins. - Author: Nasty Canuck Editorial Desk - Tags: Explainers, Canadian Corner *When Canadians think about expanding the electricity grid, they picture power lines, generating stations and enormous steel transformers. Very few picture a pulp mill. But some of the material that keeps a transformer working safely begins as wood, and a planned factory in southwestern Ontario could bring that part of the supply chain closer to home.* On October 16, [Hitachi Energy announced a $479-million transformer-insulation factory in London, Ontario](https://www.hitachienergy.com/us/en/news-and-events/press-releases/2026/10/hitachi-energy-invests-479-million-cad-to-bring-critical-transformer-manufacturing-capability-to-canada). Expected to be completed in 2028, it would establish Canada's first manufacturing line for electrical-grade pressboard, a specialized material used inside transformers. The factory is not operating yet. ## What does wood have to do with a transformer? A transformer changes voltage so electricity can travel efficiently across the grid and reach the places that need it. Inside, metal windings must be electrically isolated and mechanically supported. The material doing part of that work might look surprisingly ordinary. Pressboard isn't ordinary cardboard, though. [Hitachi Energy describes it as highly purified cellulose from long-fibred softwood](https://www.hitachienergy.com/ca/en/products-and-solutions/insulation-and-components/transformer-insulation-components/insulation-components-and-materials/pressboard), engineered for electrical insulation, strength and the ability to absorb insulating oil. Those properties matter in oil-filled power and distribution transformers. Manufacturing consistency matters, too: having forests doesn't mean every pulp producer can automatically meet a transformer's technical specifications. There is a broader reason to care about such a specialized input. The [International Energy Agency reported in 2025](https://www.iea.org/reports/building-the-future-transmission-grid/executive-summary) that securing some large power transformers could take up to four years. It also identified cables, materials and equipment as growing supply constraints. Those are international industry findings, not a measured wait time for a Canadian transformer or evidence that one new insulation plant will erase the backlog. ## From London to Varennes — and beyond The [federal announcement](https://www.canada.ca/en/innovation-science-economic-development/news/2026/10/the-government-of-canada-announces-significant-investment-to-strengthen-canadas-electricity-and-forest-products-supply-chains.html) puts the proposed annual capacity at **up to 20,000 tonnes** of electrical-grade pressboard and laminated insulation materials. Potential customers include Hitachi's transformer operations in Varennes, Quebec, and other manufacturers across North America and overseas. That capacity is a plan, not a shipment record. Hitachi already makes large power transformers in Varennes and [announced upgrades to its Quebec facilities in 2024](https://www.hitachi.com/en/press/articles/2024/04/0515a/). The London proposal would supply a different manufacturing step, not duplicate the Quebec transformer factory. Nor is it Hitachi's first connection to London: the company says it recently acquired local manufacturer Canduct, which makes transformer-insulation kits and components. Making pressboard itself would add another capability. For Canadian pulp producers, a qualified domestic customer might provide an additional market. For equipment manufacturers, another supply source might provide flexibility. But we don't yet have named Canadian pulp contracts, verified local-input percentages or actual product deliveries. And because the new facility is intended to serve international buyers, Canadian production wouldn't necessarily mean every tonne stays in Canada. Our earlier [Digital Forestry reporting](https://www.nastycanuck.ca/digital-forestry-new-brunswick/) asked how better information could help New Brunswick's forest industry match wood supply to mills. This project takes the next step: whether fibre that meets demanding specifications can become a reliable industrial input for power equipment. ## Public money, private investment, measurable results The project has an announced value of **$478.8 million**. Ottawa announced **$30 million** in support: $20 million through the Strategic Response Fund and $10 million through the Investments in Forest Industry Transformation program. [Invest Ontario describes a separate conditional grant of up to $20 million](https://investontario.ca/press-release/hitachi-energy-investing-479m-first-london-ontario-facility-strengthen-Canada-electricity-supply-chain), subject to a definitive funding agreement. Announced support is not the same thing as money already disbursed. Hitachi projects more than 100 permanent skilled jobs in London. Ottawa also describes a wider commitment to grow Hitachi Energy's Canadian workforce; that national goal shouldn't be counted as hundreds of additional jobs at this one factory. Construction, hiring, production and deliveries are different milestones, and each can be checked when the time comes. Hitachi Energy is owned by Japan's Hitachi group. Foreign ownership doesn't cancel the value of Canadian manufacturing, but neither does a Canadian address guarantee the public gets everything promised. The useful measures are Canadian supplier contracts, skilled jobs, qualified products and the terms attached to public support. Funding milestones and remedies for unmet commitments also deserve scrutiny. ## A factory still needs customers We've already examined the [electricity arrangements behind Canada's AI expansion](https://www.nastycanuck.ca/canadas-ai-build-needs-a-power-deal-canadians-can-see/): who pays for new capacity, how major customers connect and who carries the risk. Even with those questions resolved, grid projects still need equipment that manufacturers can build and deliver. The London plant offers a concrete test. Will Canadian pulp suppliers qualify? How much fibre will come from here? Will production begin on the planned schedule, and will customers receive the insulation they need? There are environmental questions, too, about responsible fibre sourcing, processing energy and the materials' performance over their working life. An announcement cannot answer any of them. By 2028, the most interesting number may not be the investment headline. It will be the volume of qualified material coming off the production line, the Canadian suppliers filling orders and the manufacturers putting that material to work. A press release can't insulate a transformer. Qualified material from a working factory can.