2019 International Conference on Intelligent Green Building and Smart Grid (IGBSG2019), 6-9 Sept., Yichang
China
A Regional Smart Power Grid Distribution
Transformer Planning Method Considering Life
Cycle Cost
Bin Zhou
State Grid Hubei Electric Power Co.,
Ltd.
Wuhan, China
1226822021@qq.com
Xu Zheng
Economic and Technological Research
Institute of State Grid Hubei Electric
Power Co., Ltd.
Wuhan, China
20688068@qq.com
Jing Yan
Economic and Technological Research
Institute of State Grid Hubei Electric
Power Co., Ltd.
Wuhan, China
105908342@qq.com
Dongjun Yang
Economic and Technological Research
Institute of State Grid Hubei Electric
Power Co., Ltd.
Wuhan, China
369897638@qq.com
Zhi Xiong
Economic and Technological Research
Institute of State Grid Hubei Electric
Power Co., Ltd.
Wuhan, China
447042872@qq.com
Ji Zhang
dept. Economic and Technological
Research Institute of State Grid Hubei
Electric Power Co., Ltd.
Wuhan, China
ceeezj@qq.com
Abstract—at present, in the research on transformation and
adjustment of distribution transformers for regional smart
power grid, most of them are around overhaul of high energy
consumption or old transformers to prolong life. In the case of
only one alternative distribution transformer, the original
transformer is directly replaced by a lower power loss
transformer to reduce cost. And through the comparison of
these two aspects, the transformation plan can be determined.
When there are a variety of alternative transformers, a
replacement strategy of distribution transformers in regional
smart power grid based on life cycle cost (LCC) is proposed in
this paper. First, based on the life cycle cost of equipment level,
the selection model of planning scheme is built. Then the
replacement strategy is evaluated in order to clarify the most
reasonable transformation mode and the best replaced time.
Further, the feasibility and effectiveness of the strategy are
verified by the relevant calculation examples. Finally, some
measures to reduce LCC are put forward.
Keywords—distribution transformer, life cycle cost, high
energy consumption, transformation mode, replacement time
I. INTRODUCTION
As the terminal of distribution power process,
distribution transformer occupied a considerable proportion
in regional smart power networks due to a huge amount of
use[1]. However, because of poor performance or long
service life of distribution transformers in some regions, their
operation and maintenance cost are extremely high, which
bring pressure to the power grid investments. At the present
stage, selection of a reasonable distribution transformer
capacity can only be one of these measures to save
investment cost of distribution transformer. At the same time,
combined with operation properties of various alternative
distribution transformers, it is another measure worth
researching to select the most reasonable transformation
mode and the best replaced time.
The equipment investment planning and adjustment and
transformation strategy of power system have been studied in
several works. An economic analysis model for transformer
overhaul technical transformation is proposed in
[2],considering life cycle cost (LCC) and combining with
transformers technical parameters. A new method to
determine the transformer capacity based on optimal load
rate is presented in [3]. A multi-level model of distribution
transformer replaced priority is formulated in [4] based on
the fuzzy analytic hierarchy process and grey fuzzy theory.
In [5], minimum LCC is adopted as the principle to select
type of distribution transformer transformation, and life cycle
cost model of transformer in medium and low voltage
distribution network is established.
The existing studies all focus on the two aspects which
include overhaul of high energy consumption or old
transformers to extend service life and replacement of lowloss transformers to reduce cost. the planning scheme is
determined through their comparisons. In this paper,
considering existing equipment investment decision and
adjustment strategy research, a replacement strategy of
distribution transformers in regional smart power grid based
on life cycle cost is proposed.
This paper is organized as follows: The model of
distribution transformers based on life cycle cost is
established in Section II. The example of high energy
consumption transformers replacement is introduced in
Section III. The conclusions are shown in Section IV.
II. LIFE CYCLE COST MODELING FOR DISTRIBUTION
TRANSFORMERS
A. Time Value of Capital
The LCC of transformers is a continuous expense over a
long period so that time value of capital should be taken into
account. Firstly, the cost of each year in service life of
transformers is calculated. Then the cost is converted to
present the value of initial equipment purchase according to
determined social discount rate and inflation rate. Finally, the
LCC of transformers is obtained by adding present value of
each year[6]. The detailed calculative process is proposed as
follow:
T -1
LCC =
1+ r
 A (1 + R )
i
i
(1)
i=1
where T is the service life of transformers, Ai means the
annual cost of transformers, r denotes inflation rate, R
represents the social discount rate.
XXX-X-XXXX-XXXX-X/XX/$XX.00 ©20XX IEEE
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2019 International Conference on Intelligent Green Building and Smart Grid (IGBSG2019), 6-9 Sept., Yichang
China
LCC  CCI  CCO  CCM  CCF  CCD
Failure rate
B. Life Cycle Cost Model
The LCC of transformers mainly includes initial
investment cost, operation cost, maintenance cost, failure
cost and decommissioning cost[7-12]. The LCC is described
as follows:
TABLE I.
Γ2
(3)
2) Operation cost of transformers
Operation cost is the sum of all expenses during
operation of project. Because other costs account for a
smaller proportion of operation cost than equipment energy
consumption cost, the operation cost in this paper is mainly
calculated as energy consumption cost as follows:
PROPORTION COEFFICIENT OF MAINTENANCE COSTS
Maintenance cost ratio coefficient
Year
1
2
3
4
5-19
Coefficient
0.06
0.05
0.04
0.035
0.03
Year
20
21
22
23
24
25
Coefficient
0.04
0.045
0.05
0.055
0.06
0.065
Maintenance cost of transformers is described as follows:
installation and debugging cost, and Cqt is other costs.
Cnh  [ po   2 ( p  p f )]   8760  pr
Service life
Fig. 1. Failure rate during transformers service.
where Cgz is the purchase cost of equipment, Caz means the
T 1
1 r i
  Cnh (
)
1 R
i=1
Sandom failure
period
Γ1
1) Initial investment cost of transformers
Initial investment cost of transformers mainly includes
equipment purchase cost, installation and debugging cost and
other expenses.
CCO
Loss failure
period
(2)
where CCI is the initial investment cost of transformers, CCO
denotes operation cost, CCM means maintenance cost, CCF
is failure cost, CCD represents decommissioning cost.
CCI  Cgz  Caz  Cqt
Early failure
adaptation period
T 1
1 r i
CCM    i CCI (
)
1 R
i =1
(6)
where  i is the ratio coefficient of maintenance cost of
transformers in year i to present value of equipment
investment cost.
4) Failure cost of transformers
Failure cost of transformers is the loss cost caused by
power shortage or power supply interruption due to
transformers failure, including failure maintenance cost and
failure loss cost. In this paper, failure cost only considers the
loss cost of power failure caused by accidents. It is calculated
as follows:
(4)
(5)
where Cnh is the annual energy consumption cost of
transformers, po denotes the no-load loss of transformers,
p represents the load loss of transformers, p f is auxiliary
T 1
1 r i
CCF   Cef (
)
1
R
i =1
loss,  is the rate of average load and pr means power
price.
3) Maintenance cost of transformers
The maintenance cost in this paper is determined
according to failure rate during service of transformers.
Generally, the failure rate of equipment is relatively high at
the beginning and end of its service life as shown in figure 1.
Consequently, the maintenance cost is relatively high at these
two stages.
The maintenance cost is generally calculated according to
the proportion of annual equipment investment cost. From
the transformer fault curve (bathtub curve) in figure 1, the
ratio coefficient of annual maintenance cost to equipment
investment cost is shown in table I.
(7)
Cef  S  cos     t g  K d  pr 
(sg  za  qx )  C jx
(8)
where S is transformer capacity, cos  is power factor, K d
means the conversion multiple of electricity price, sg
denotes annual accident rate of transformers, za represents
annual failure rate, qx is annual defect rate, C jx indicates
failure maintenance cost and t g shows annual average
accident power cut time.
5) Decommissioning cost of transformers
Decommissioning cost includes cost of decommissioning
and residual value of transformers. It is calculated as follow:
T 1
1 r i
CCD   (Cbf  Ccz )(
)
1
R
i =1
613
(9)
2019 International Conference on Intelligent Green Building and Smart Grid (IGBSG2019), 6-9 Sept., Yichang
China
where Cbf is cost of decommissioning and Ccz represents
residual value of transformers when they are
decommissioned.
III. THE REPLACEMENT EXAMPLE OF DISTRIBUTION
TRANSFORMERS IN REGIONAL SMART POWER GRID
An old transformer S7 with a rated capacity of 315kVA
in a 10kV substation in a regional smart power grid has been
in operation for 10 years. Due to its insulation aging and high
operating loss, the transformer is now adjusted to be matched
with transformers S9 or S11. The equipment parameters are
shown in table II. Other parameters are used in the example
shown in table III.
TABLE II.
EQUIPMENT PARAMETERS OF ALTERNATIVE
TRANSFORMER
Parameter
S9
S , k WA
315
Cgz , Yuan
25*10
S11
315
4
30*104
po , kW
95
78
p , kW
520
495
p f , kW
0
8
sg
0.01765
0.004717
zq
0.00588
0.004717
qx
0.30882
0.084906
TABLE III.
Value
R
0.04
r
0.035
T
25
pr , Yuan/kW
0.45
The value based on bathtub
curve
Maintenance cost ratio coefficient
From the perspective of various costs, the equipment
purchase cost of distribution transformer S9 is relatively
lower than that of distribution transformer S11. But the loss
cost of S9 is slightly higher than S11. Consequently, the
initial investment is lower and the operation cost is higher in
case 1. Meanwhile, these two costs account for a large
proportion in two cases. The maintenance cost and failure
cost account for a small proportion in life cycle cost. The
values in two cases are both relatively low and have little
difference, which has little impact on life cycle cost. Among
the decommissioning costs, the value of S11 equipment is
higher than S9. These two transformers do not meet the
decommissioning standard, but the transformer S9 has been
in operation for 25 years to reach the decommissioning life
of the equipment. Therefore, the residual value of
transformer S11 in case 2 is higher than that of S9 in case 1.
In conclusion, when the delayed year is 5 years, the life
cycle cost of case 2 is lower than that of case 1. That is to say,
the scheme with a delay of 5 years is more economical. At
the same time, the scheme is selected as the preferred for
transformation replacement to fully utilize the remaining
equipment value of high-energy consumption distribution
transformer S7.
TYPICAL PARAMETER VALUES
Parameter
The results show that there is one or several years of delayed
construction, so that the economy of delayed construction is
better than that of direct construction. In case 1, S7 is
replaced prematurely, which wastes its remaining effective
life. While in case 2, S7 continues to operate and makes full
use of equipment resources, which is another advantage of
delayed construction.
A. Determine The Transformation Mode of Distribution
Transformer
In the example, the transformation mode is set as two
cases.
B. Determine The Best Time to Delay New Transformer
Further study of case 2 is carried out. Five years of S7
operation are adjusted to variable value n. In the life of
transformer S7, n can be taken for 1-15 years. And the
operation year replaced by S11 is 24-10 years. That is to say,
there are fifteen replaced schemes. The calculation results of
each scheme are shown in table V. The annual value of each
scheme is shown in figure 2.
1) Case 1: From the beginning of the planning period,
the transformer S7 is replaced with a transformer S9 with
medium loss level and operates for 25 years.
2) Case2: The transformer S7 continues to operate for 5
years. Then the S7 is replaced with low-loss transformer
S11 and continues to operate for 20 years.
The planning results of two cases are set in table IV.
TABLE IV.
THE PLANNING RESULTS OF TWO CASES(TEN THOUSAND
YUAN)
CCI
CCO
CCM
CCF
CCD
LCC
Case 1
28
25.09
2.05
2.63
-10.38
47.39
Case 2
33
22.91
0.10
0.12
-16.55
39.58
From the perspective of total cost, the new transformer
delay building in case 2 and its life cycle cost is lower than
direct new transformer in case 1. The delayed year is selected
5 years as a representative scheme of delayed construction.
614
TABLE V.
THE PLANNING RESULTS OF PLANNING SCHEMES (TEN
THOUSAND YUAN)
CCD
LCC
Annual
value
0.02
-9.70
31.69
34.85
0.05
-11.08
32.68
18.83
0.39
0.07
-13.80
34.33
13.80
0.48
0.10
-14.75
36.63
11.56
22.91
0.60
0.12
-17.05
39.58
10.44
33
29.97
0.69
0.15
-18.85
44.95
10.32
7
33
34.99
0.79
0.17
-19.75
49.20
10.11
8
33
39.98
0.95
0.20
-20.05
54.08
10.14
9
33
45.93
1.12
0.22
-20.65
59.62
10.35
10
33
50.84
1.46
0.24
-31.44
64.10
10.43
11
33
58.71
1.69
0.27
-32.82
70.84
10.91
12
33
66.54
1.97
0.29
-33.32
78.48
11.52
13
33
84.34
2.23
0.31
-33.60
86.48
12.17
14
33
92.10
2.47
0.34
-32.83
95.07
12.91
15
33
99.82
2.60
0.36
-31.45
104.33
13.72
n
CCI
1
2
CCO
CCM
CCF
33
8.26
0.11
33
10.48
0.23
3
33
14.66
4
33
17.80
5
33
6
2019 International Conference on Intelligent Green Building and Smart Grid (IGBSG2019), 6-9 Sept., Yichang
China
Annual value of each scheme(ten thousand yuan)
As can be observed from Table V and figure 2, in the
further research, the annual value of life cycle cost first
decreases and then increases with extension of delay time. In
addition, when the transformer S7 is delayed for 7 years, the
cost of the new transformer S11 is the lowest, which is the
most economical replaced plan. When the value of n are 5-11
years, the corresponding costs are all lower than case 1 of
directly building. If the equipment condition allows
extension of service life within 5-11 years, the optimal
delayed construction of 7 years is selected. Otherwise, direct
construction of case 1 is selected.
40
35
30
and replaced time to minimize economic cost and make full
use of the value of equipment.
B. Select Low Energy Consumption Transformers
The influence of load loss on energy consumption of
equipment can be seen from the energy consumption formula.
Although initial investment cost of a low energy
consumption transformer is relatively high, it can greatly
reduce power loss and operation cost of the transformer. In
the long term, the cost saved from operation loss and other
aspects can fully make up for the extra cost of investment. At
the same time, selection of low energy consumption
transformers is in line with the energy saving and emission
reduction also an important means of energy saving and
emission reduction in power enterprises.
25
20
15
10
5
0
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Time(year)
Fig. 2. Annual value of each scheme.
C. Results Analysis
In this paper, The scheme of transformer replacement is
determined by transformation mode and replaced time.
The results of transformation mode show that the
delayed construction in case 2 is more economical in case of
appropriate delay year and makes full use of equipment
resources. The results of replaced time show that when the
delayed year is 5-11 years, delayed construction is better
than direct construction. And delayed construction in the 7th
year of planning period is the best replaced time.
It can be seen from the results of transformation mode
and replaced time that initial investment cost and operation
cost of transformers account for a relatively high proportion
in life cycle cost. Operation cost varies greatly in different
replaced schemes, which affects variation trend of life cycle
cost to some extent. Maintenance cost accounts for a small
proportion in life cycle cost and has little influence. In this
paper, the annual cost of equipment maintenance is
determined based on failure rate of equipment, which is more
reasonable than regular maintenance.
IV.
CONCLUSION
Based on the existing research on transformer investment
decision and adjustment strategy, a selection model
considering life cycle cost for transformation replacement
strategy of distribution transformers in regional smart power
grid is proposed in this paper. Then effectiveness of the
proposed method is verified by specific examples. And
through the concrete analysis of various costs, some effective
measures to reduce life cycle cost is obtained as follows:
A. Consider Life Cycle Cost
The equipment level planning investment must take into
account life cycle cost rather than just cost of one stage.
Under existing conditions, scientific and reasonable selection
model is adopted to decide the best transformation method
C. Use Reasonable Maintenance Methods
The common problem of high failure rate at the
beginning and end of equipment service life is considered in
this paper. The maintenance coefficient approximates
bathtub curve bathtub curve. This maintenance method can
make up for problems of insufficient maintenance or
excessive maintenance in regular maintenance, which
changes the traditional transformer maintenance method and
affects maintenance cost. On the other hand, it can indirectly
improve reliability and reduce failure rate of transformers.
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