AICPA SOC Service Organizations - Certrec

The U.S. Department of Energy Proposes New Efficiency Standards for Distribution Transformers

The U.S. Department of Energy Proposes New Efficiency Standards for Distribution Transformers - Certrec

New energy-efficiency standards have been proposed by the U.S. Department of Energy (DOE) for three categories of distribution transformers. The new standards will improve the resiliency of the U.S. power grid, reduce domestic carbon-dioxide emissions to a great extent, lower utility bills, and deliver up to $15 billion in savings to the American nation.  

This proposal by DOE is a strategic step toward the diversification of transformer core technology that will help reduce costs and save energy. Most of the transformers produced under the new standards will feature amorphous steel cores, which are more energy efficient when compared to the traditional grain-oriented electrical steel. If the new rule is adopted within the timeframe proposed by DOE, it will be applied in 2027.

Three Categories of Distribution Transformers

Distribution transformers can be seen on utility poles all over the country. These devices are used to lower the voltage of electric power before it reaches the consumers. Distribution transformers are purchased mainly by commercial or industrial entities and electric utilities.

The current efficiency standards are geared towards three categories: liquid-immersed, low-voltage dry-type, medium-voltage dry-type distribution transformers. DOE has proposed amending the energy conservation standards for all three categories.  

According to experts, since most of the electricity produced by power plants goes through transformers, even a small improvement in the efficiency can have a great impact on electricity generation and the reduction of emissions.

What Can Be Expected From the New Standards Proposed by DOE - Certrec

What Can Be Expected From the New Standards Proposed by DOE

According to DOE, if the proposed standards are finalized and adopted, they will reduce U.S. carbon emissions by 340 million metric tons in the next 30 years. It is also expected to generate more than 10 quads of energy savings and around $15 billion in savings to the nation from 30 years of shipments.

Energy Secretary Jennifer Granholm stressed that distribution transformers are a critical component of the U.S. electricity system and the new rule is necessary to ensure that they operate “as efficiently and inexpensively as possible.” She also said that modernizing the energy conservation standards of the component would “enhance the resilience of our nation’s energy grid and make it possible to deliver affordable electrical power to consumers in every corner of America.”

Supply Chain Considerations

In the recent past, utilities warned that electrification efforts were slowing down as a shortage of distribution system transformers was depleting replacement equipment stockpiles and delaying some projects.

As the supply of traditional, grain-oriented steel tightens, DOE is focused on the production of amorphous steel, which is more energy efficient. The proposed standards will require almost all transformers to use amorphous steel cores. Procuring adequate supplies of amorphous steel is already turning out to be a concern, however, DOE is finalizing guidelines for the implementation of the distribution transformer, as well as the extended product system rebate programs established by the Energy Act of 2020, and funded by the President’s Bipartisan Infrastructure Law.

Disclaimer: Any opinions expressed in the blog do not necessarily reflect the opinions of Certrec. The content of this blog is meant for informational purposes only.