WCM Summer School 2014 Group 8 Distribution Transformers: Aligning sustainable goals, financial benefits & quality

Key figures 2 Case company: Liander o Liander distributes energy through the Liander grid to customers in the Netherlands Case topic: Distribution Transformers (DT) o DT transforms electrical power between different voltage levels o Medium Voltage (20kV/10kV) into Low Voltage (690V/400V) o DTs in the Liander grid o Highly reliable (7 failures / year / grid) o Average life span: 40 years

Problem statement 3 Goal: Make investment proposals for distribution transformers to provide the stakeholders of Liander with the highest (circular) value. Problem: Main interests of key stakeholders seem to be unaligned: -Increase sustainability (circularity) -Increase Financial Profit -Maintain Quality & Safety Is it possible to align the interests of all stakeholders? YES!

4 Scenarios

1: Current policy: Replace DTs placed prior to 1970 with newer, more sustainable DTs 5 Key elements o Significant reduction in energy losses (sustainability) o Reuse existing DTs (sustainability, cost-efficient) o Cost-efficient: Average annual return over total depreciation period (40 years): 16% o Saving CO 2 of kg over total lifespan o Proven technology with long life cycle (higher quality) Implementation: o Currently ±450 replacements/year o Continue this process

2: Replace DTs placed prior to 1970 with new DTs with On Load Tap Changer (OLTC) 6 Key elements o Preventing a replacement wave (risk reduction) o Withstands future changes to the grid (risk reduction) o Significant reduction in energy losses (sustainability) Reduction outweighs energy for replacing & 95% of material of old DT is circular o Average annual return over total depreciation period (40 years): 7,76% o Saving CO 2 of kg over total lifespan o Initial investment outweighs future modification costs (cost efficient) o Proven technology with long life cycle (higher quality) Implementation: o Tender for new DTs with OLTC o After delivery, gradually start placing the new DTs.

3: Align all stakeholders in the supply chain to reach EU demands most efficiently 7 Motive: Commission Regulators (EU etc.) demand more sustainable energy distribution (Ecodesign DB – 2009/125/EC) Key elements o Reach the EU sustainability goal by decreasing the CO2-emission of DTs with combined effort of all stakeholders in the supply chain o Design for Maintenance & Recycling o Modernization of grid system, such as DTs with On Load Tap Changers o Embed sustainability goals in tendering procedures. o Reduce costs in long term for all stakeholders o Positive impact to the customers. Implementation: Gather most important stakeholders (Regulators, Energy Production and Distribution Companies, Material, Component and System Suppliers) to determine the strategy for fulfilling the EU goals.

Thank you for your attention 8 Aligning interest of all stakeholders: Improving sustainability, Increasing Profit, Maintaining high quality, and Managing risks (future proof). Conclusion