# DOE Distribution Transformer Efficiency Regulation Evaluation of Impact on the Industry Carlos Gaytan Manager of Engineering Distribution Transformers.

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

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

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

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

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%

Efficiency Calculations

Efficiency Calculations
Efficiency vs Losses

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

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

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

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

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

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

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

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

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

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

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

TOC and Band of Equivalence (BoE) Concepts

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

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

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

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

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

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