“Befuddled” is the word American Public Power Association lobbyist Corry Marshall offers as his initial reaction to the Biden Administration’s Department of Energy proposal to increase energy efficiency standards for electric distribution transformers.
For years, the electric utility industry, home builders, and transformer manufacturers have been highlighting a supply chain shortage of the transformers needed to open new housing developments and respond to disasters that take down electric distribution lines. They were making a major push late last December in Congress for funds and authorities to address the acute shortage.
DOE was supporting the effort to overcome the transformer shortage. Last June, DOE Secretary Jennifer Granholm created a “tiger team” to look at distribution supply chain woes, and the administration issued a “Presidential determination” to, in the words of APPA, “prioritize the domestic production of transformers to bolster grid resiliency and national security.”
But at the same time, DOE’s Office of Energy Efficiency and Renewable Energy was working on increasing efficiency standards for distribution transformers, upgrading standards last set in 2013. On December 28, DOE announced it would issue a notice of proposed rulemaking to increase efficiency standards for distribution transformers. In a press release, DOE said its action “represents a strategic step to advance the diversification of transformer core technology, which will conserve energy and reduce costs.”
In the press release, Granholm is quoted (although it’s unlikely she actually said or wrote it), “The Biden-Harris Administration continues to use every means available to reduce America’s carbon footprint while strengthening our security posture and lowering energy costs. Efficient distribution transformers 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.”
DOE claims the new standards, set to go in to effect in 2027, would cut CO2 emissions “by 340 million tons over the next 30 years – an amount roughly equivalent to the annual emissions of 90 coal-fired power plants. DOE also expects the proposed rule to generate over 10 quads of energy savings and approximately $15 billion in savings to the nation from 30 years of shipments.” Those claims have produced some head-scratching among long-time energy observers.
The proposed rulemaking on transformer efficiency, formally published Feb. 22 in the Federal Register, will make the supply chain problem worse, Marshall told The Quad Report in an interview last week. “There is lots of skepticism about the proclaimed savings,” he said. APPA is among an organized group of skeptics about the new DOE efficiency plan, including the National Electrical Manufacturers Association (NEMA), the National Rural Electric Cooperative Association (NRECA), the Edison Electric Institute (EEI), Leading Builders of America (LBA), National Association of Homebuilders (NAHB), and GridWise Alliance.
In a Feb. 15 letter to Granholm, the group of opponents to the proposed rule said it would “further exacerbate the supply chain situation. The proposed rule would dictate that manufacturers increase the efficiency of distribution transformers by a mere tenth of a percentage point.” According to the letter, “NEMA calculates a three-phase liquid-immersed distribution transformer with a kilovolt-ampere (kVA) output rating of 2500 is already 99.53% efficient; a similar single[1]phase type with a kVA of 833 is 99.55% efficient. Importantly, due to the intricate ways transformers are designed and assembled, increasing their efficiency even by a fraction of a percentage point could add months to an already lengthy order-cycle.”
They key to the DOE proposal is a requirement that new transformers use “amorphous steel” cores. The DOE press release says, “Almost all transformers produced under the new standard would feature amorphous steel cores, which are significantly more energy efficient than those made of traditional, grain-oriented electrical steel.”
Wikipedia describes amorphous steel, which goes under the general rubric as “metglas,” as “an alloy of iron with boron, silicon, and phosphorus in the form of thin (e.g. 25 µm) foils rapidly cooled from melt. These materials have high magnetic susceptibility, very low coercivity and high electrical resistance. The high resistance and thin foils lead to low losses by eddy currents when subjected to alternating magnetic fields. On the downside amorphous alloys have a lower saturation induction and often a higher magnetostriction compared to conventional crystalline iron-silicon electrical steel.”
South Carolina-based Metglas Inc., which supports the DOE proposal and is the only U.S. manufacturer, says, “Ultra-efficient transformer cores made with Metglas® amorphous metal alloy make lower core losses possible. Amorphous metal distribution transformers are key to improving utility economics and enhancing energy conservation efforts worldwide.”
Also supporting the DOE plan are the Natural Resources Defense Council (NRDC) and the American Council for an Energy-Efficient Economy (ACEEE), traditional proponents of increased efficiency standards throughout the U.S. economy. NRDC also supported the 2013 increase in distribution transformer efficiency standards. In a press release at that time, NRDC said, “To achieve the maximum cost-effective energy savings, DOE will need to revisit the standards in the next few years, as the industry adjusts to making higher efficiency products.”
According to Wikipedia’s entry, “This technology has been widely adopted by large developing countries such as China and India where labour cost is low. [Amorphous metal transformers] are in fact more labour-intensive than conventional distribution transformers, a reason that explains a very low adoption in the comparable (by size) European market.”
The group letter opposing the administration plan describes the amorphous steel technology as “largely untested, less flexible, and more expensive. Further, the existing supply chain of this alternative steel is very limited and mostly foreign-sourced.”
APPA’s Marshall said the opponents of the increased efficiency standard will continue to participate in the rulemaking procedure but will also highlight the issue in Congress. “We will also raise a political response,” he said, targeting the House Energy and Commerce Committee, and the Senate Energy and Natural Resources Committee.
The group letter includes copies to the Speaker of the House and the ranking House Democrat, the Senate majority and minority leaders, and both party leaders at the relevant House and Senate committees, and the White House. “We don’t cry wolf,” said Marshall. “This is important.”
–Kennedy Maize
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