2016 DOE efficiency regulations to result in $12.9 Billion in Net Present Value for U.S. consumers

Speaking ahead of his forthcoming CWIEME Chicago seminar, Mahesh Sampat, founder of EMS Consulting, reveals the main technical and market impacts of the impending U.S. Department of Energy efficiency regulations for distribution transformers.

Having been the first country in the world to introduce an efficiency regulation for distribution transformers in 2010, the USA is further tightening its grip on energy consumption with a new amendment to be effective January 1, 2016. This amendment, requiring even fewer losses, comes after extensive analysis by the Department of Energy (DOE) and feedback from stakeholders, showing that country would benefit as whole from this achievable improvement.

"The majority of distribution transformers used in the US today are 98-99% efficient - the new regulation by the DOE will require them to be as high as 99.5% efficient," says Mahesh Sampat, founder of EMS Consulting, a firm specializing in business and technical consulting in the field of transmission and distribution products. "Although this is not a huge increase, the savings that could be generated over a one-year period on a product that is built to last 30 years are immense - perhaps 1,000,000 units in a typical year. Per DOE analysis, Net Present Value (NPV) of this regulation is $12.9 Billion. We are better off as a nation making this investment in our infrastructure."

While the benefit of highly efficient transformers has been clear to utilities and industrial users for a number of years, resistance still lies in the electrical contracting sector.

"The trend among utilities and industrial users is to make purchase decisions based on the total cost of ownership of a transformer rather than the initial purchase price - a highly-efficient transformer will save money in the long run," he says. "This is not at all a priority for the electrical contractors who purchase low voltage dry transformers to install in industrial or commercial buildings, as they don't pay for its energy consumption - that's up to the building owner or tenant. The new regulations will force improvement in this sector of the electrical industry."

Impacts on the supply chain
When it comes to improving the efficiency of transformers - of all types - Mr. Sampat sees the choice of electrical steel as key. "The electrical steel dictates how much energy is consumed by the transformer even when not delivering the load," he explains. "The majority of low voltage dry transformers, for example, are produced using non-oriented electrical steel, which is not as bad as regular steel, but using a grain-oriented electrical steel or even amorphous metal would result in far fewer losses."

Other ways transformer suppliers can achieve greater efficiency from their products include investing in automated equipment to improve the precision of the manufacturing, minimizing use of space in the winding, and using thinner insulation with better dielectric qualities.

"Everyone in the supply chain is affected by this shift," Mr. Sampat says. "Manufacturers need to invest in R&D to work out how to increase efficiency without dramatically increasing product cost. As for materials and component suppliers, the pressure is on to deliver lower loss, higher quality material - again at a similar cost if possible".

Mr. Sampat will be discussing these issues and more in a seminar entitled, ‘New Year, new rules? Technical and market considerations in response to the US DoE's upcoming distribution transformer efficiency regulations', at CWIEME Chicago. His session will take place at the CWIEME Connect theater on Tuesday October 6, at 1.30pm and is free of charge for all visitors.

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