1. DOE Distribution Transformer Efficiency Regulation Evaluation of Impact on the Industry
Carlos Gaytan Manager of Engineering Distribution Transformers April 29, 2008

2. Agenda Efficiency Calculations Impact on Materials
Impact on Manufacturers
Impact on Customers
Customer Purchasing Practices
Outstanding Issues / Concerns
Summary and Next Steps

3. Efficiency Calculations
Efficiency = Power OUT / Power IN
Where:
%EFF = Efficiency means the ratio of the useful power to the total power input; for DOE Rule it is calculated at 50% Load
kVA = Transformer Capacity in kilo Volt Ampere
NL = No Load (Core) Losses corrected to 20°C
LL = Load Losses corrected to 85°C
0.91 = Load Loss Temperature correction from 85°C to 55°C

4. Efficiency Calculations
No Load Loss Impact
NL/LL=
0.182
98.91%
98.44%
No Load Losses represent a critical portion of the Transformer Efficiency

5. Efficiency Calculations
Examples of No Load Loss Impact
Two 25 kVA 1-Phase Designs with Same Efficiency at 100% Load are evaluated at 50% load (DOE basis):
Design #1: NL=75W, LL=325W, TL=400W (NL/LL=0.23)
Design #2: NL=55W, LL=345W, TL=400W (NL/LL=0.16)
Does Not Meet DOE Rule of 98.91%
Meets DOE Rule of 98.91%

6. Efficiency Calculations
Load Loss Impact

7. Efficiency Calculations
Efficiency vs Losses

8. Efficiency Calculations
Around 50% of present designs available already meet the Efficiency Levels of the DOE Rule

9. Impact on Materials Core Material: Conductor Material:
Silicon Steel – M5(12 mil), M4(11 mil), M3 and M0H (9 mil), M2(7 mil)
As efficiency of material improves total market volume decreases
Worldwide limited supply of Grain Oriented Silicon Steel
5-year cost increase = 65%
M3, M2 or better grades will become the most popular for DOE compliance
Amorphous Metal
Supply is tight, price flat in last 5 years
Not an option for a significant conversion from Silicon Steel
Conductor Material:
Copper Wire
5-year cost increase = 240%
Preferred material for High Voltage Windings
Aluminum
5-year cost increase = 20%
Preferred for LV windings; limited application for HV windings

10. Impact on Materials
“M3 or Better” Grade Required to Meet DOE

11. Impact on Materials Total = 2.1 Million (MT)
2007 World Installed Production of Grain Oriented Silicon Steel*
Total = 2.1 Million (MT)
* Data Courtesy of Sumitomo Corporation

12. Impact on Materials Total = 0.64 Million (MT)
2007 World Installed Production of Hi B Silicon Steel*
Total = 0.64 Million (MT)
* Data Courtesy of Sumitomo Corporation

13. Impact on Materials
75%+ of Growth in Capacity in Asia; intended for domestic market
* Data Courtesy of Sumitomo Corporation

14. Impact on Manufacturers
Manufacturer Key Issues:
Amorphous Material
Possible difficulty of access to the technology; limited sourcing options
The high level of capital equipment investment required (rendering obsolete a large portion of the equipment used in the liquid-immersed industry, particularly core-cutting equipment and annealing furnaces)
Core steel price volatility and uncertainty
Dimensional and physical constraints
Meeting DOE efficiency standard and their customers’ dimensional and physical constraints simultaneously

15. Impact on Manufacturers
Manufacturer Key Issues:
Backsliding
Market may move from a highly customized market, to a commoditized market
Customized designs become less common
Testing Methods and Systems
Manufacturing Process capabilities with Max. target Std. Deviation of 4%
The bigger the sample size, the closer the mean has to be to the Required Efficiency
Test Equipment Accuracy
Design Optimization Customers’ response to DOE Rule
Will buyers purchase on Minimum Efficiency only or include a TOC evaluation?
Design optimization processes will change in response to purchasing practices

16. Impact on Customers
For this rulemaking, DOE identified rural electric cooperatives and municipal utilities as transformer consumer subgroups that could be disproportionately affected
NRECA commented that standards may encourage some utilities to stop evaluating transformer purchases for efficiency because the small differences between the energy savings and costs of evaluated and standard compliant transformers may no longer justify the cost of performing evaluations
Impact to Customers of DOE efficiency standard will be proportional to their present purchasing practice

17. DOE Impact on Designs Quoted
Impact on Customers
DOE Impact on Designs Quoted
For Non-Evaluated Market:
Expected Price Increase of 15% to 20%
Weight Difference of –5% to +10%
For Mid-Evaluated Segment (e.g., A=$3.00; B=$1.00):
Expected Price Increase of 5% to 10%
Weight Difference of 0% to +5%
For High-Evaluated Segment (e.g., A>$4.50; B>$1.50):
Typical current offerings meet or exceed DOE minimum efficiencies
Equivalent A & B factors will be driven by NL/LL ratio to meet DOE Min. Efficiency

18. Customer Purchasing Practices
Current Purchasing Practices:
Non-Evaluated
Decision based on Lowest Price meeting ANSI/IEEE Standards
Leads to Low Efficiencies
Total Owning Cost (TOC) Loss Evaluation
TOC = (NL × A) + (LL × B) + Price
where:
TOC = total owning cost ($),
NL = no-load loss (Watts),
A = equivalent first-cost of no-load losses ($/Watt),
LL = load loss at the transformer’s rated load (Watts),
B = equivalent first-cost of load losses ($/Watt), and
Price = bid price (retail price)($).
TOC with Band of Equivalence (BoE)
Efficiency Standards Evolution
Energy Star ®
NEMA TP 1

19. Customer Purchasing Practices
TOC and Band of Equivalence (BoE) Concepts

20. Customer Purchasing Practices
Purchasing Practices in a DOE Rule environment:
For Non-Evaluated Segment:
DOE Min. Efficiency will result in lower loss designs
Purchase on lowest price from compliant bids?
For Mid-Evaluated Segment (e.g., A=$3.00; B=$1.00):
DOE Min. Efficiency will typically result in lower loss design
Purchase Lowest Price only, or TOC, or TOC with BoE?
For High-Evaluated Segment (e.g., A>$4.50; B>$1.50):
Some DOE designs could result in less efficient, higher TOC units
Customers may choose to continue with TOC evaluations

21. Outstanding Issues / Concerns
Multiple winding connections
Dual Voltage
120/240 V on the secondary.
Efficiency must be measured on the winding connection that produces the highest losses.
This requirement imposes a significant additional burden on manufacturers

22. Summary and Next Steps From a Manufacturer’s Perspective:
Understand how customers will purchase in a DOE standards environment
Impact on Design Optimization Programs based on minimum efficiency and lowest material cost
Review of standard materials
Impact of global supply chain
Flexibility of manufacturing and test processes
IEEE Transformer Committee – assess impact on total industry

23. Thank You!
Carlos Gaytan Manager of Engineering Distribution Transformers April 29, 2008

24. Bibliography.
10 CFR 431 Part III Energy Conservation Program for Commercial Equipment: Distribution Transformers Energy Conservation Standards; Final Rule. Issued Oct 12, 2007
10 CFR 431 Part III Energy Conservation Program for Commercial Equipment: Test Procedures for Distribution Transformers; Final Rule. Issued Apr 27, 2006
EERE Appliances and Commercial Equipment Standards, Distribution Transformers Web Page, last consulted on 12th Feb 2008.
EERE Appliances and Commercial Equipment Standards, Technical Supporting Documentation for Final Rule (Distribution Transformers)
AK Steel Product Catalog, 2007
Personal communications with NEMA.
Report on Global Production of Silicon Steel by Sumitomo Corporation