ESL-IE-98-04-36
Energy-Efficient Dry-Type Distribution Transformers:
New Opportunities to Cut Energy Bills and Lock-in Long-Term Energy Savings
Margaret Suozzo
Research Associate
American Council for an Energy-Efficient
Economy
Washington, DC
Andrew deLaski
Product Manager
Consortium for Energy Efficiency
Boston, MA
ABSTRACT
capacity. This paper focuses on dry-type distribution
transformers because this equipment type dominates
industrial sales. In addition, while cost-of-ownership
purchasing practices in the liquid-immersed market
have pushed efficiencies higher over the past twenty
years, the dry-type market, driven largely by first cost
considerations, has experienced declining average
efficiencies. As a result, on a per unit basis, the
energy and cost savings opportunity for dry-type
equipment is relatively large.
Nearly 90% of the electricity that powers the
industrial sector flows through dry-type distribution
transformers. These transformers are very efficient ­
most convert in excess of 95% of input power to
output power. However, because transformers are
generally energized 24 hours per day, 365 days per
year, even small efficiency improvements can yield
big energy and dollar savings for power users.
Until now, energy-efficient dry-type transformers
have been bard to identify. As a result, most users
either have failed to specify efficiency at all or relied
on the imperfect indicator of low temperature rise.
Most manufactures have not offered an "energy­
efficient" product line. Now, the National Electrical
Manufacturers' Association (NEMA), the
transformer manufacturers' trade association, has
published a standard defining energy-efficient
transformers. This new standard, NEMA standaId
TP-l, makes it easier for vendors, specifiers,
contractors and end-users to identify and determine
the cost-effectiveness of energy-efficient
transformers. In addition, some manufacturers are
beginning to offer equipment lines specifically
designed to meet the energy efficiency levels defined
in NEMA standard TP-l.
OVERVIEW
This paper provides guidance for how to choose an
energy-efficient transformer. The paper examines
why low first-eost, low-efficiency equipment is
typically procured and describes the technical
efficiency opportunity available to industrial users
from specifying more efficient transformers in their
facility renovation, expansion and construction
projects. A final section summarizes collaborative
efforts under way to raise awareness about energy­
efficient transformers and provide tools for
identifying and specifying more efficient equipment.
SCOPE
NEMA standard TP-l covers liquid-immersed and
dry-type, single and three phase, low and medium
voltage distribution transformers over 10kVA
BACKGROUND
Commercial and industrial sector distribution
transformer losses total to about 79 billion kWh per
year (2). Energy efficient transformers could cut this
total by at least 15%, reducing the total annual U.S.
electric bill by over $725 million. I
Despite this large overall savings opportunity,
relatively little attention has been paid to commercial
and industrial transformer efficiency. This lack of
attention can be traced to several reasons. In general,
facility managers, specifiers and contractors perceive
transformers as among the most efficient and reliable
electrical devices. In addition, the specifiers and
contractors who typically decide which transformers
get installed have no direct stake in keeping operating
costs low. Finally, even for the most efficiency­
focused facilities, energy-saving efforts typically are
directed to large end-uses such as motor and lighting
systems. The net result is that many facilities have
missed opportunities to cost-effectively trim
operating costs.
For new facilities, expansion or renovation of
existing facilities or the rare transformer failure,
choices exist which can provide substantial cost­
effective energy savings. By choosing energy­
efficient transformers, individual commercial and
industrial facilities can cut total electricity bills by
0.3% to 1.5% or more at little incremental capital
cost (3).
1 Based on 1997 sales-weighted average of
commercial and industrial rates ($0.0613/kWh).
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ESL-IE-98-04-36
Until now, these savings opportunities have been
difficult to identify. Comparing equipment efficiency
has been difficult since neither nameplates nor
catalogs have carried efficiency data. Users
interested in more efficient equipment have typically
simply specified low temperature rise transformers, a
flawed method for specifying efficiency. A few
large, energy-intensive industrials have relied on
multiyear cost-of-ownership, a robust and well­
documented method for specifying cost-effective
efficient transformers.
In 1996, the National Electrical Manufacturers
Association (NEMA), the transformer manufacturers'
trade association, developed and adopted for the first
time a consensus definition for "energy-efficient"
transformers. The NEMA standard offers two parts
for industrial users. First, it recommends and
describes the multiyear cost-of-ownership
methodology. Second, for users for whom the cost­
of-ownership method is not practical, it offers a set of
default minimum efficiencies. These default
efficiencies are defined in NEMA standard TP-l,
Table 4-2. With the publication of this table, NEMA
established an industry-recognized definition of an
"energy-efficient" dry-type distribution transformer.
HOW TO SPECIFY ENERGY-EFFICIENT
TRANSFORMERS
The best way to maximize cost-effectiveness is to
carry out a multiyear cost-of-ownership analysis. For
situations where this method is not practical., simply!
specifying NEMA standard TP-l, Table 4-2
compliant equipment is the best route to assure cost­
effective dry-type transformer purchases. As
discussed below, low temperature rise should not be
used as a proxy for energy efficiency.
Cost-of-ownership
A cost-of-ownership analysis offers the surest way to
arrive at equipment that cost-effectively meets users'
needs. As the name implies, this method takes a
user-specified time interval and compares equipment
options based on capital cost plus operating cost over
that interval. Although most companies are limited.
to considering operating savings for the first three
years or less, equipment life often exceeding thirty
years justifies longer intervals.
Using data on typical load, annual duty hours and the
purchaser's cost of electricity as inputs, this methoq
calculates a cost per Watt of no-load losses (core
losses) and per Watt of load losses (winding losses).
I
The cost per Watt of no-load losses and load losses;
are termed the A and B factors, respectively. Once'
these factors have been calculated and competing
manufacturers or project bidders have supplied data
on no-load and load losses, the user, specifier or
contractor can identify the most cost-effective choice.
This approach for using the owning cost
methodology works when purchasing standardized,
off-the-shelf equipment. In general, low voltage
equipment below 300kV falls into this category.
Howe (1995) provides a thorough example of using
the method in this manner (5).
.
Now, by simply specifying equipment that meets the
efficiency ofNEMA standard TP-l, Table 4-2, a user
can be assured that, on average, its dry-type
distribution transformers will keep operating costs
low. Users with operating conditions that diverge
significantly from the assmnptions of the standard
should consider a more complete analysis of their
options?
HOW THE MARKET WORKS
Specifiers (e.g., A&E firms) and electrical
contractors playa key role in determining which
transformers are purchased. They usually have no
incentive whatsoever to choose more efficient
equipment In general, they are rewarded for keeping
job costs down, not for providing an electrical system
that minimizes costs for the building owner over
time. As a result, most will tend to specify and install
low-first-cost equipment regardless of how
advantageous more energy-efficient equipment might
be.
Alternatively, commercial and industrial users can
approach the market like many utilities do. Instead
of accepting product efficiency characteristics as a
given, the user provides their A and B factors to
potential bidders. These bidders can trade off load~
losses, no-load losses, and first cost in their designs
to offer products that minimize user costs over the
selected time interval. This approach to using the
cost-of-ownership method is particularly appropriate
for the build-to-order market since manufacturers
already responding to a purchaser's specification.
Nearly all medium voltage distribution transformers
are built-to-order as are the largest low voltage
transformers. Large orders of low voltage equipment
may be built-to-order as well. NEMA standard TP-I
and draft IEEE standard C57.l2.33 provide
are
2 TP-lassumes a per wtit load of 50% and 35%
for medium and low voltage transformers
respectively. TP-l is available from NEMA's
publications department at 703-841-3200.
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ESL-IE-98-04-36
descriptions of how to apply the cost-of-ownership
method for industrial applications (7,6).
Although the method is far from technically difficult,
the required data may not be immediately available.
A simpler rule of thumb is called for. NEMA has
stepped into the breach and developed just such a
measure.
NEMA standard TP-l. Table 4-2
Table 4-2 ofNEMA standard TP-l describes default
minimum efficiencies for applications where cost-of­
ownership analysis is not practical. NEMA has
defined typical operating conditions and developed a
standard definition that is cost-effective for nearly all
users. Table 4-2 makes specifying an energy­
efficient transformer very straightforward. A user
need simply specify that all transformers to be
installed meet or exceed the efficiency values in TP-l
Table 4-2.
As of this writing, nearly all manufacturers of
medium voltage transformers will provide equipment
meeting Table 4-2 efficiencies if specified. For the
off-the-shelf low voltage market, at least two
manufacturers will soon offer standard product lines
meeting the Table 4-2 standard. Others are expected
to follow suit. In the meantime, most manufacturers
can meet the standard for low voltage on a build-to­
order basis.
Because the NEMA standard is still relatively new,
some local equipment distributors or manufacturer
representatives may be unaware of it. Nevertheless,
by contacting the manufacturer directly, a local
distributor or manufacturer representative should be
able to determine if their supplier can provide
product meeting the TP-I Table 4-2 efficiencies. As
demand from end-users grows, products will become
more readily available from more manufacturers and
their distribution partners.
Temperature rise.
Some users have specified low temperature rise
transformers with the intention of getting improved
efficiency performance. This method has been
shown to be unreliable (5). Because temperature rise
is measured at full load efficiency, load losses are
minimized often at the expense of increased no-load
losses in order to achieve low temperature rise
performance. Since most transformers are typically
loaded well below nameplate levels, this emphasis on
ratcheting down load losses does not necessarily
yield optimized energy performance. NEMA and
Oak Ridge National Labs have found that per unit
loading for medium and low voltage transformers is,
on average, 50% and 35%, respectively (2,7). In
addition, temperature rise can be controlled through
improved ventilation and increased thermal mass,
factors that have no impact on efficiency.
SAVINGS OPPORTUNITY
In order to understand the savings opportunity in
transformers, it is best to consider medium and low
voltage equipment separately.
Medium voltage distribution transformers.
Medium voltage distribution transformers include
equipment with primary voltages between 2.4kV and
35kY. As noted above, this equipment is almost
always built-to-order to the specifications of a
purchaser. The average efficiency of medium
voltage transformers tends to be relatively high,
(about 98%) since some users rely on owning cost
analysis. In addition, advanced manufacturing
techniques that yield higher efficiencies tend to be
applied to larger, more expensive, custom equipment
before these techniques are applied to mass-produced
products. Since manufacturer efforts to keep prices
low by reducing production costs can result in lower
efficiencies, users risk increased operating costs if
they fail to specify A and B factors or the minimum
efficiencies of TP-l Table 4-2. provides a summary
of the incremental cost and annual energy savings for
several sizes ofTP-l Table 4-2 compliant low and
medium voltage transformers relative to transformers
of average efficiency. It also presents the annual
energy cost savings and estimated payback periods
for these products at three electric rates. At an
electric rate of SO.05/kWh, any Table 4-2 compliant
product will pay for itself within three to a little over
six years. For instance, a TP-l Table 4-2 qualified
750 kVA transformer might offer savings on the
order of 15,000 kWh per year while slightly shaving
demand relative to an average transformer. The
incremental cost of the more efficient transformer is
quickly recouped in reduced kWh usage. Savings
could be even higher relative to the lowest first cost
option.
Low voltage.
Low voltage distribution transformers include
equipment with primary voltages at or below 1.2kY.
Used to serve lighting, plug and motor loads, this
equipment is typically carried in inventory as an off­
the-shelf product. On average, low voltage
transformers are significantly less efficient than their
medium voltage counterparts. Purchasing practices
have not pushed efficiency, and manufacturing
techniques that can yield improved energy
performance have yet to be regularly applied. As a
result the savings potential per kVA of capacity tends
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ESL-IE-98-04-36
at $.08/kWh
at $.05/kWh
at $.11/kWh
incremental
annual kWh
cost
savings
annual savings
payback (years)
annual savings
payback (years)
annual savings
payback (years)
$3,176
$3,554
$3,865
$3,974
$4,467
15,880
20,906
24,156
24,838
28,819
$794
$1,045
$1,208
$1,242
$1,441
4
3.4
3.2
32
3,1
$1,270
$1,672
$1,933
$1,987
$2,306
2.5
2.1
2.0
2.0
1.9
$1,747
$2,300
$2,657
$2,732
$3,170
1.8
1.5
1.5
1.5
1.4
EMERGING SUPPORT FOR ENERGY­
EFFICIENT TRANSFORMERS
to be even more substantial in the low voltage
market For example, a facility with ten 75 kVA
transformers powering a variety of loads could cut
annual use by about 20,000 kWh by specifying TP-l
compliant equipment
By beginning to specify energy-efficient transformers
now, users can take advantage of an opportunity that
is beginning to get a lot of attention. As the savings
opportunity in energy-efficient transformers has
become more widely acknowledged, an informal
collaborative effort has formed to further develop the
market for energy-efficient transformers. This
collaborative involves representatives of utilities,
federal government agencies, and NEMA A
number of efforts are envisioned that will raise
awareness about the opportunity for energy and cost
savings from energy-efficient transformers. Thus far,
the participants in the collaborative have been able to
use NEMA standard TP-l as the collective basis for
defining energy-efficient dry-type transformers.
Dry-type v. liquid-immersed.
The NEMA standard for energy-efficiency defines
different threshold levels for liquid-immersed and
dry-type equipment. In general, utility purchasers
reliant on total owning cost methodologies have
driven the liquid-immersed market to higher levels of
efficiency. As a result, currently available liquid­
immersed equipment can reach higher efficiencies at
lower equipment cost than comparable dry-type
equipment Despite the lower first costs and higher
efficiencies of liquid-immersed equipment,
industrials have generally specified dry-type
equipment for indoor and, in some cases, outdoor
equipment due to fire and safety concerns. With the
availability of improved insulating materials, more
users may be willing to consider liquid-immersed
equipment for both outdoor and indoor applications.
Manufacturers of the competing equipment types
argue the relative merits of their products, and TP-l
offers default efficiency tables specific to each
equipment type.
Several efforts are currently under development The
U.S. Environmental Protection Agency (EPA) has
proposed an Energy Star® label for equipment
meeting the standard. TIlls program likely will make
it even easier to identify energy-efficient equipment
and add the muscle of an increasingly recognized
brand name for energy efficiency. In support of the
program, EPA has developed a software tool
(currently being reviewed) to aide commercial and
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ESL-IE-98-04-36
industrial user in analyzing transformer options? In
addition, federal government purchase
recommendations developed by the Federal Energy
Management Program will use the standard. In the
utility arena, the Consortium for Energy Efficiency
has adopted a framework initiative that will support
regional and local utility programs promoting energy­
efficient commercial and industrial transformers (3).
A number of utilities are likely to participate. NEMA
has begun to explore an industry protocol for
nameplate data and labeling (4). At the regulatory
level, the state of Massachusetts has passed
legislation requiring all new transformers to meet TP­
1 defined minimum efficiencies as of January 1, 1999
and these efficiency levels could form the starting
point for negotiations concerning a Federal
government minimum standard. As these various
programs gear up, the best and easiest route to cost
savings for an end-user is to specify TP-l Table 4-2
compliant equipment for their dry-type transformer
purchases.
Distribution Transformers: Initiative Description and
Market Assessment. Boston, MA.
4. Hopkinson, P. 1997. Square D Company, personal
communication.
5. Howe, B. 1995. Selecting Dry-Type
Transformers: Getting the Most Energy Efficiency
for the Dollar. Tech Update TU-95-6 E-Source,
Boulder, CO.
6. Institute of Eleetrical and Electronic Engineers
(IEEE). June 30, 1997. Guide for Distribution
Transformer Loss Evaluation. DRAFT IEEE
standard C57.12.33. New York, NY.
7. National Electrical Manufacturers Association
(NEMA). 1996. NEMA Standards Publication TP 1­
1996: Guide for Determining Energy Efficiency for
Distribution Transformers. Rosslyn,VA.
SUMMARY
The path for cutting energy costs through improved
distribution transformers is clear. By simply
specifying NEMA standard TP-l Table 4-2 minimum
efficiencies for all dry-type distribution transformers,
a new or expanded facility can cut up to 1.5% off
annual energy bills at little incremental cost. Those
users interested in pursuing even greater savings
should consider adopting a policy that involves a
simple analysis of specific applications to ensure the
most cost-effective transformer selection.
REFERENCES
1. Barnes, P.R., lW. Van Dyke, B.W. McConnell, S.
Das. 1996. Determination Analysis of Energy
Conservation Standards for Distribution
Transformers. Oak Ridge National Labs, Oak Ridge,
TN.
2. Barnes, P.R, S. Das, B.W. McConnell, lW. Van
Dyke. 1997. Supplement to the "Determination
Analysis" (ORNL-6847) and Analysis of the NEMA
Efficiency Standard for Distribution Transformers.
Oak Ridge National Labs, Oak Ridge, TN.
3.
Consortium for Energy Efficiency (CEE). 1997.
An Initiative to Transform the Market for Dry-Type
3 Contact EPA Energy StaI® Transformers
Program Manager at U.S. EPA, 401 M St, SW,
Washington DC 20460, or call 1-888-STAR-YES for
more details.
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Proceedings from the Twentieth National Industrial Energy Technology Conference, Houston, TX, April 22-23, 1998