New California factory will produce advanced power equipment designed to support rising electricity demand from data centers, electric vehicles and other energy-intensive applications
San Jose, California, 14 August 2026 – Heron Power is planning to invest $100 million in a new California manufacturing facility as the United States faces growing pressure to modernize its aging electric grid and meet rapidly rising demand for electricity.
The company plans to convert a former 286,000-square-foot distribution warehouse located south of San Jose into a factory for advanced grid equipment. The facility will manufacture Heron Link, a 5 megawatt medium voltage power conversion system designed for large-scale energy projects and data centers.
The investment comes at a time when electricity demand is increasing due to the expansion of AI data centers, electric vehicles, heat pumps, and other technologies that rely heavily on electric power. Much of the existing US grid infrastructure was built decades ago and is now facing the challenge of supporting a more electrified economy.
Heron Power, led by CEO Drew Baglino, plans to use software-controlled and chip-based power electronics as an alternative approach to conventional transformers. Traditional transformers often rely on steel and oil-based designs, while newer power conversion technologies aim to provide greater flexibility and control as electricity networks become more complex.
One of the major challenges facing the power sector is the availability of critical grid equipment. According to Baglino, utilities and developers can face waits of up to four years for standard transformers, with many key components sourced from outside the country. This shortage is creating additional pressure as companies race to build new data centers, renewable energy projects, charging infrastructure and power transmission systems.
Heron Power expects to begin mass production at the new facility in late 2027. The company said it has received strong interest from electric utilities and data center developers, although it has not yet identified potential customers.
The planned factory could also support the growing need for infrastructure that can handle large and rapidly changing power loads. Data centers, particularly those built for artificial intelligence applications, require significant amounts of electricity and are becoming an important driver of grid investment. Advanced power conversion equipment could help developers connect and manage these large energy loads more efficiently.
Heron Power raised $140 million in a Series B funding round earlier this year. The company is now moving toward large-scale manufacturing as the power industry prepares for substantial investment in new generation, renewable energy, battery charging infrastructure and high voltage transmission over the coming decade. Reuters reported that the industry is expected to invest about $1 trillion in new infrastructure during that period.
The new facility reflects a wider shift in the energy sector. As electricity demand grows, modernizing the grid is becoming just as important as adding new sources of power. The ability to manufacture advanced transformers and other critical equipment at scale could play an important role in reducing supply constraints and preparing power networks for the next generation of energy demand.
