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CHAPTER 10: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION .................................................... 10-1

10.1.1 National Impact Spreadsheet Flowchart ............................. 10-2

10.2.1 National Energy Savings Overview ................................. 10-5

10.2.2 National Energy Savings Inputs ................................... 10-6

10.2.2.1 Size Scaling of Losses and Costs ......................... 10-7

10.2.2.2 Mapping LCC Design Line Data to Product Classes .......... 10-9

10.2.2.3 Root Mean Square Loading ............................ 10-11

10.2.2.4 Load Growth ........................................ 10-11

10.2.2.5 Affected Stock ....................................... 10-12

10.2.2.6 Unit Energy Consumption .............................. 10-13

10.2.2.7 Electricity Site-to-Source Conversion ..................... 10-13

10.3 NET PRESENT VALUE CALCULATION ............................... 10-15

10.3.1 Net Present Value Overview ..................................... 10-16

10.3.2 Net Present Value Inputs ........................................ 10-17

10.3.2.1 First Cost ........................................... 10-18

10.3.2.2 Operating Cost ....................................... 10-19

10.3.2.3 Peak Responsibility Factor ............................. 10-20

10.3.2.4 Initial Peak Load ..................................... 10-21

10.3.2.5 Electricity Price Forecast Scalar ......................... 10-21

10.3.2.6 Marginal Electricity Costs .............................. 10-21

10.3.2.7 Discount Rate ........................................ 10-22

10.4 RESULTS ......................................................... 10-22

10.4.1 National Energy Savings and Net Present Value from Candidate 

Standard Levels ............................................... 10-22

10.4.1.1 Liquid-Immersed Results ............................... 10-23

10.4.1.2 Dry-Type Results ..................................... 10-24

10.5.1.1 Introduction ......................................... 10-26

10.5.1.2 Model Flowchart ..................................... 10-26

10.5.2 NES/NPV .................................................... 10-27

10.5.2.1 Input Worksheets ..................................... 10-27

10.5.2.2 Shipments and Affected Stock (from “Stock” sheets) ......... 10-27

10.5.2.3 Marginal Prices ...................................... 10-27

10.5.2.4 Site2Source ......................................... 10-27

10.5.2.5 Calculation Worksheet ................................. 10-28

10.5.2.6 Annual Impacts ...................................... 10-28

10.5.2.7 Output Worksheets .................................... 10-28

10.5.2.8 Output ............................................. 10-28

10.5.2.9 Summary of Results ................................... 10-28

10.6 USING THE SPREADSHEET ......................................... 10-29

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LIST OF TABLES

Table 10.2.1 Mapping of Design Line (DL) to Product Class (PC) ................. 10-10

Table 10.2.2 Average Site-to-Source Conversion Factors for No-Load Losses and 

Load Losses .................................................. 10-14

Table 10.3.1 First Cost of Distribution Transformers by Candidate Standard Levels and

Product Class (2001$/kVA) ...................................... 10-19

Table 10.3.2 Peak Responsibility Factors by Product Class ........................ 10-20

Table 10.3.3 Initial Peak Loading by Product Class .............................. 10-21

Table 10.3.4 Marginal Energy and Demand Cost by Product Class ................. 10-22

Table 10.4.1 Summary of Cumulative NES (2007-2035) and NPV (2007-2070) Impact . 10-23

Table 10.4.2 Net Present Value During 2007-2070: Liquid-Immersed Transformers by 

Product Class ................................................. 10-24

Table 10.4.3 Cumulative Primary Energy Savings During 2007-2035: Liquid-Immersed

Transformers by Product Class ................................... 10-24

Table 10.4.4 Net Present Value During 2007-2070: Dry-Type Transformers by 

Product Class ................................................. 10-25

Table 10.4.5 Cumulative Primary Energy Savings During 2007-2035: Dry-Type 

Transformers by Product Class ................................... 10-26

LIST OF FIGURES

Figure 10.1.1 National Impact Analysis Flowchart ................................ 10-3

Figure 10.4.1 Liquid-Immersed Distribution Transformers: NES and NPV Impacts: 3%

Discount Rate ................................................. 10-23

Figure 10.4.2 Liquid-Immersed Distribution Transformers: NES and NPV Impacts: 7%

Discount Rate ................................................. 10-23

Figure 10.4.3 Dry-Type Distribution Transforms: NES and NPV Impacts: 3% 

Discount Rate ................................................. 10-24

Figure 10.4.4 Dry-Type Distribution Transforms: NES and NPV Impacts: 7% 

Discount Rate ................................................. 10-24

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CHAPTER 10: NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

The Energy Policy and Conservation Act (EPCA) states that any new or amended

standard must be chosen so as to achieve the maximum improvement in energy efficiency that is

technologically feasible and economically justified. In determining whether economic

justification exists, the Department must determine that the benefits of the candidate standard

level exceed its burdens to the greatest extent practicable. Key factors in this decision are: 

C the total projected amount of energy savings likely to result directly from the imposition

of the standard, and

C the savings in operating costs throughout the estimated average life of the covered

product in the type (or class) compared to any increase in the price of, or in the initial

charges for or maintenance expenses of, the covered products which are likely to result

from the imposition of the standard.

To satisfy this EPCA requirement and to more fully understand the national impact of

potential efficiency regulations for distribution transformers, the Department conducted a

national impact analysis. This analysis assessed future national energy savings (NES) from

candidate transformer standards as well as the national economic impact using the net present

value (NPV) metric.

The NES is the cumulative incremental energy savings from a transformer efficiency

standard relative to a base case scenario of no national standard over a forecast period. The

Department calculated NES for each candidate standard level in units of quadrillion Btus

(Quads) for standards that it assumed will be implemented in the year 2007. 

The NPV is the net present value of the incremental economic impact on consumers from

a candidate standard level. The Department calculated the NPV using a method similar to the

NES, except that it estimated incremental costs and benefits instead of energy, and discounted

the net benefits rather than calculating them as an un-discounted sum. The Department

discounted purchases and expenses and operating costs for transformers using a national average

discount factor. The Department calculated the NPV impact from transformers that were

purchased between 2007 through 2035 to calculate the total NPV impact from purchases during

the forecast period.

The Department developed a Microsoft Excel® spreadsheet, the national impact

spreadsheet, to implement the calculations described above. The spreadsheet calculates capacity

and operating cost savings associated with each of the candidate standard levels. The NES

analysis considers cumulative energy savings through the year 2035, while the NPV considers

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a

 The Department chose the year 2070 because it is the rounded sum of 2035 plus 32 years, the average lifetime of

distribution transformers.

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capacity and operating cost savings through the year 2070a for transformers purchased on or

before 2035. By taking the difference between the base case scenario and candidate standard

levels, summing and discounting the annual results, the spreadsheet calculates an NPV for each

candidate standard level relative to the base case.

10.1.1 National Impact Spreadsheet Flowchart

Figure 10.1.1 presents a graphical flow diagram of the distribution transformer national

impact (NES and NPV) model and spreadsheet. In the diagram, the arrows show the direction of

information flow of the calculation. The information begins with inputs that are shown as

parallelograms. As information flows from these inputs, it may be integrated into intermediate

results (shown as rectangles) or through integrating sums or differences (shown as circles) into

major outputs that are shown as boxes that have a curved bottom edge. Note that the shipments

model portion of the flow diagram (shaded) is discussed in Chapter 9.

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Figure 10.1.1 National Impact Analysis Flowchart

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The calculation starts with the shipments model (described in Chapter 9) which integrates

the inputs of 2001 shipments estimates from the Department’s contractor,1 the U.S. Bureau of

Economic Analysis (BEA) transformer quantity index,2 electricity market shares from the U.S.

Energy Information Administration (EIA),3 and equipment price estimates from the life-cycle

cost analysis (LCC) to produce a backcast and a forecast of total shipments. The total shipments

and a retirement function feed an accounting of in-service transformers (stocks) to produce

estimates of the stock that is affected by candidate standards and transformer retirements. When

subtracted from total shipments, the transformer retirements produce new capacity shipments,

which are those transformers made to supply new electrical capacity.

After the shipments calculation, the NES and NPV calculations begin. Key inputs from

the LCC analysis are the average rated losses for both no-load and load losses, and the cost of

transformers including installation. The losses and the equipment costs then go through a

transformer size and product class adjustment that converts the data from representative design

lines to average product class information. Additional inputs regarding average and peak losses

—including root mean square (RMS) loading, peak loading, and peak responsibility

factor—allow a conversion from rated losses into actual losses. At this point, the information

flow for the NES and NPV calculation splits into two paths.

On one path, the NES calculation sums the watt-hours of energy consumed by the

affected stock, and takes the difference between the base case and standards scenario to calculate

site energy savings. Marginal heat rates from the National Energy Modeling System (NEMS)

then convert the site energy savings to energy savings at the source (i.e., at the power plant). 

The marginal heat rates from NEMS includes the transmission and distribution losses. The

Department performed a sensitivity analysis to analyze an improvement in the heat rate as a

result of the efficiency improvement in the standards scenario and the impact was not significant.

The sum of annual energy savings for the forecast period through 2035 then provides the final

NES number.

On the other path, the NPV calculation brings in marginal price inputs from the LCC

analysis for both energy costs and capacity costs and for both load losses and no-load losses. 

The marginal prices, when combined with the actual peak and average losses, provide the

estimate of the operating cost. Meanwhile, the adjusted equipment installed cost times the

annual shipments provides the estimate of the total annual equipment costs. The Department

took three differences to calculate the net impact of the candidate standard. The first difference

was between the candidate standards scenario equipment costs and the base case equipment costs

to obtain the net equipment cost increase from a candidate standard. The second difference was

between the base case scenario operating cost and the candidate standards scenario operating

cost to obtain the net operating cost savings from a candidate standard. The third difference was

between the net operating cost savings and the net equipment cost increase to get the net

expense/savings for each year. The Department then discounted the net expense/savings to 2001

and summed them over the years 2007-2070 for transformers purchased on or before 2035, to

provide the NPV impact of a candidate standard. 

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Given this overview, the Department provides detailed technical descriptions of the three

models below: the shipments model in Chapter 9, the NES model in section 10.2, and the NPV

model in section 10.3. Each technical description begins with a summary of the model. It then

provides a descriptive overview of how the Department performs each model’s calculations, and

follows with a summary of the inputs. The final subsections of each technical description

describe each of the major input and computation steps in detail and with equations, when

appropriate. After the technical model descriptions, the Department presents the results of the

national impact calculations.

10.2 NATIONAL ENERGY SAVINGS

The Department developed the NES model to estimate the total national energy savings

using the results from the shipments model, combined with information from the LCC on energy

savings. The savings shown in the NES reflect decreased losses from the installation of new,

more-efficient transformer units nationwide in comparison to a base case with no national

standards. The NES predicts the energy savings for each of several candidate standard levels. 

Positive values of NES correspond to net energy savings, i.e., a decrease in energy consumption

with standards in comparison to the energy consumption in the base case scenario.

10.2.1 National Energy Savings Overview

The Department calculated the cumulative incremental energy savings from a candidate

transformer efficiency standard relative to a base case scenario of no standard over the forecast

period. The Department calculated NES for each candidate standard level in units of quads for

standards that it assumed will be implemented in the year 2007. The NES calculation started

with transformer shipments and stocks (in-service transformers), estimates of which are outputs

of the shipments model (Chapter 9). The Department then obtained estimates of transformer

losses from the LCC analysis (Chapter 8). The Department proceeded to calculate the total

energy use by the stock of transformers for each year for both a base case and standards case. 

Over time, in the standards case, more-efficient transformers gradually replace less-efficient

transformers. Thus, the energy per unit capacity used by the stock of transformers gradually

decreases in the standards case relative to the base case. The Department converted energy used

by the transformers into the amount of energy consumed at the source of electricity generation

(the source energy) with a site-to-source conversion factor. The site-to-source factor accounts

for transmission, distribution, and generation losses. For each year analyzed, the difference in

source energy use between the base case and standards scenario is the annual energy savings. 

The Department summed the annual energy savings from 2007 through 2035 to calculate the

total NES for the forecast period. 

In calculating the NES, the Department did not assume any trends in transformer nameplate efficiency besides the incremental efficiency improvement indicated by the LCC

calculation. The Department also assumed that the efficiency of transformers did not degrade

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over time. This means that the annual energy savings can be written in terms of an affected

stock described in section 9.3.10 in the shipments chapter:

Eq. 10.1

where:

AES(y) = the annual energy savings in year y,

Aff_Stock(y) = stock of transformers of all vintages that are operational in year y,

UECBase = the site unit energy consumption for the base case, and 

UECStd = the site unit energy consumption for the standards case.

Then, given the annual energy savings, the NES can be calculated as a simple sum:

Eq. 10.2 

where:

SiteToSource(y) = the site-to-source conversion factor in year y, and

AEC = the annual energy consumption.

Once the shipments model provides the estimate for the affected stock, the key to the

NES calculation is in calculating UECBase and UECStd, given the input from the LCC and

including the site-to-source conversion factor that translates site energy into energy consumed at

the power plant. In the next section, the inputs necessary for the NES calculation are

summarized, and then presented individually with complete technical detail. 

10.2.2 National Energy Savings Inputs 

The NES model inputs fall into three broad categories: (1) some inputs help convert the

data from the LCC into data for the product classes and transformer size distributions used in the

NES; (2) some inputs help calculate the unit energy consumption; and (3) the site-to-source

factors then enable the calculation of source energy consumption from site energy use. The

specific list of NES model inputs is as follows:

1. Size Scaling of Losses and Costs

2. Mapping of LCC Design Line Data to Product Classes

3. Root Mean Square Loading

4. Load Growth

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5. Effective Date of Standard

6. Unit Energy Consumption

7. Electricity Site-to-Source Conversion

8. Affected Stock

The size scaling of losses and costs adjusts LCC representative design line data so it can

represent the size distribution of transformers that are in a particular product class. The mapping

of LCC design line data to product classes provides the proper inter-design line averaging or

adjustments for representation of the product classes (i.e., the design-line to product-class

relationship is a many-to-many relationship so the mapping needs to be carefully specified). The

RMS loading is a key factor in estimating actual load losses given the load losses at rated load

for a transformer. Load growth over the lifetime of the transformer can modify the average

(RMS) loading that is seen by an affected stock of transformers. The effective date of the

standard impacts the definition of the affected stock. The unit energy consumption is the energy

per unit capacity of an affected stock of transformers and depends on all of the first four inputs. 

Finally, the electricity site-to-source conversion provides the estimate of energy consumption at

the power plant given the site energy use of the transformer. 

The next section begins the detailed discussion of NES inputs with a description of the

size-scaling method that adjusts transformer losses and costs from a representative LCC design

line to the distribution of sizes in a transformer product class. 

10.2.2.1 Size Scaling of Losses and Costs 

The size scaling of losses and costs is the scaling relationship or equation that the

Department used to project the economic results from one transformer design line to similar

transformers of different sizes. It is a key element in adjusting losses and costs from a

representative transformer in the LCC to a distribution of transformer sizes represented in the

NES calculation. 

As described in the engineering analysis, the Department applied the 0.75 power scaling

rule (the “0.75 rule”) for projecting losses and costs from one design line to transformers of other

sizes. In the NES calculation, shipments are calculated in terms of installed capacity. The losses

associated with a stock of transformers, and the costs associated with a capacity shipped, are

estimated by multiplying the relevant capacity times the average losses, or costs per unit

capacity. Before applying the 0.75 rule, the Department calculated the losses and costs per unit

of installed capacity within a given engineering design line. Then the Department calculated an

adjustment factor using the 0.75 rule to account for the fact that the representative design line

unit used in the engineering analysis is not exactly the “average” transformer size for the set of

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10-8

transformers that design line represents. This adjustment factor is given by the following

equation:

Eq. 10.3

where: 

AdjFactor = adjustment factor that gives the shipments-weighted losses or costs

per transformer when multiplied by the design line losses or costs, 

Shipi = shipments in the i-th size category, 

Capi = the rated capacity for the transformers in the i-th size category, and

CapDL = the rated capacity of the design line.

The Department also used the shipment-weighted average size of transformers

represented by a particular design line to calculate the average loss per capacity

(AvgLossPerCapDL), as described in the following equation:

Eq. 10.4

where: 

LossPerCapDL = the loss, or cost per unit capacity, for the design line unit from the

LCC analysis, and

Capavg = the shipment-weighted average size of transformers represented by

a particular design line.

Once the losses and costs from the LCC represent the correct size distribution, they need

a further adjustment so that they represent the appropriate product classes, as described in the

next section.

10.2.2.2 Mapping LCC Design Line Data to Product Classes

The NES and NPV calculations use the LCC calculations as the source of most input

data. The LCC calculations are performed by design line, whereas any eventual standards would

be promulgated by product class. As a first step, therefore, the NES calculation aggregates the

LCC design line data to product classes. Design-line-to-product-class aggregation is the process

by which the Department took the results from an economic analysis of engineering design lines

and combined them to provide estimates of economic impact by product class.

To represent the variety of designs in some product classes, the Department analyzed up

to three different design lines per product class. Specifically, product class 1 (single-phase,

medium-voltage, liquid-immersed transformers) is represented by three design lines and product

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class 2 (three-phase, medium-voltage, liquid-immersed transformers) is represented by two

design lines. The Department did not specifically examine single-phase, dry-type design lines. 

For single-phase product classes 5, 7, and 9, the Department used the appropriate three-phase

design lines divided by 3. Table 10.2.1 presents the mapping of design line to product class.

Table 10.2.1 Mapping of Design Line (DL) to Product Class (PC) 

Product Class BIL* (kV) Capacity (kVA) Mapping

PC 1, Liquid-Immersed, MV,** Single-Phase Any 10-833 DL 1 + DL 2 + DL 3

PC 2, Liquid-Immersed, MV, Three-Phase Any 15-2500 DL 4 + DL 5

PC 3, Dry-Type, LV,† Single-Phase # 10 15-333 DL 6

PC 4, Dry-Type, LV, Three-Phase # 10 15-1000 DL 7 + D L8

PC 5, Dry-Type, MV, Single-Phase 20-4 15-833 (DL 9 ÷ 3) +(DL 10 ÷ 3)

PC 6, Dry-Type, MV, Three-Phase 20-45 15-2500 DL 9 + DL 10

PC 7, Dry-Type, MV, Single-Phase 46-95 15-833 (DL 11 ÷ 3) +(DL 12 ÷ 3)

PC 8, Dry-Type, MV, Three-Phase 46-95 15-2500 DL 11 + DL 12

PC 9, Dry-Type, MV, Single-Phase $ 95 75-833 DL 13 ÷ 3

PC 10, Dry-Type, MV, Three-Phase $ 95 225-2500 DL 13

* BIL = Basic Impulse insulation Levels

** MV = Medium Voltage

† LV = Low Voltage

To aggregate losses from more than one design line, the Department took a

shipments-capacity-weighted average of the per-kilovolt-amper (kVA) transformer

characteristics from the economic analysis of the design lines and applied the average

per-capacity values to the estimated capacity shipped for each product class. The Department’s

contractor1 provided the capacity shipped for each design line (and each product class), the LCC

analysis provided the economic results for each design, and the 0.75 rule provided the re-scaled

cost and loss estimates for each size category represented by each design line. The following

equation provides the average loss per unit capacity of product class (AvgLossPerCapPC), as

derived from the average loss per unit capacity for a design line:

Eq. 10.5

where: 

AvgLossPerCapDL = the average loss per unit capacity for the design line, and 

MSDL = the capacity market share of the design line.

The summation in Equation 10.5 is over those design lines that constitute a product class. 

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The AvgLossPerCapPC represents the average loss per unit capacity of the transformer

load. For no-load losses no more adjustment is needed, but for load losses, the losses at rated

load need to be converted to losses at actual loading. The RMS loading is a key factor in

estimating load losses at actual loading. The next section describes the RMS loading input.

10.2.2.3 Root Mean Square Loading 

The RMS loading is the root mean square of the hourly transformer loading relative to

the transformer capacity. Energy losses in transformers follow the RMS load, not the arithmetic

average load. The Department calculated the RMS loading as the root mean square of the

transformer load, divided by the transformer rated capacity, times the power factor. (As

explained in Chapter 6, while the Department’s method for analysis can derive results for

varying power factors, for the analysis presented here the Department set the power factor to the

value of one.) The Department used the average national RMS loading for each design line as

calculated in the LCC analysis. These values range between 30.2 percent and 58.9 percent for

the different design lines. 

10.2.2.4 Load Growth

The fractional load growth is the fraction by which the load has increased since a

transformer was installed. Load growth occurs when new equipment, new appliances, or

additional activities occur on the circuits served by distribution transformers. Load growth has

the impact of increasing the load losses relative to the losses that the Department estimated

during the first year of installation.

The Department calculated the fractional load growth from an estimated load growth rate

that it used as an input to the LCC analysis. There is a maximum load growth, LGRMax, which

is set by the Department at 50 percent based on data for liquid-immersed transformers. The 50

percent value represents the approximate amount of growth in load that can occur without

overloading the transformer beyond a reasonable point, at which time the transformer is assumed

to be relocated and reinstalled with the initial peak loading.4 See Institute of Electrical and

Electronics Engineers, Inc. (IEEE) Std C57.91-19955 for details on permissible overloading of

mineral-oil immersed transformers. Since IEEE does not report data on permissible overloading

of dry-type units, the Department used the same values for both liquid-immersed and dry-type

transformers. The age of the transformer at which this point is reached is given by:

Eq. 10.6 

where:

ageMax = the maximum age of transformer, in years, after which time the load

switches to initial peak load, and

LGR = the annual load growth rate (in %).

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Thus, the equation for the load growth as a function of the age of the transformer is as

follows:

LGrwth(age) = (1+LGR)(age)-1 Eq. 10.7

for age < ageMax , and

LGrwth(age) = (1+LGR)(age-ageMax)-1 Eq. 10.8

for age >= ageMax

where LGrwth (age) is the fractional load growth. 

The load growth is then used to adjust the RMS loading estimate for the affected stock. 

The mathematical equation for this adjustment is as follows:

Eq. 10.9

where LAdjust(y) is the load adjustment factor in year y and all other variables have been defined

previously. 

The Department used a load adjustment factor to calculate an adjusted RMS loading that

incorporates load growth into the unit energy consumption as described in the next section.

10.2.2.5 Affected Stock

The affected stock is an output of the shipments model (Chapter 9) and a key input for

the NES and NPV calculations. The affected stock consists of that portion of the transformer

stock that is potentially impacted by a candidate standard. It therefore consists of those

transformers in the stock that are purchased in or after the year the candidate standard has taken

effect, as described by the following equation:

Eq. 10.10

where:

Aff_Stock(y) = the stock of transformers of all vintages that are operational in year

y, and

Age = the age of the transformer in years. 

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10.2.2.6 Unit Energy Consumption

One of the final quantities that the Department calculated for the NES estimate is the unit

energy consumption for affected stock. The unit energy consumption times the capacity shipped

and the site-to-source conversion factor equals the annual energy consumption from which the

total national energy savings is derived.

Annual unit energy consumption (UEC(y)) for affected stock, or energy per unit capacity,

is the annual energy consumption per unit capacity for transformers shipped after the effective

date of a standard. This energy consumption is a function of load losses and no-load losses. The

Department calculated the losses per transformer as the sum of no-load loss plus the load losses. 

The Department calculated the load losses as the rated load loss times the square of RMS loading

adjusted for load growth. Average energy consumed per unit capacity for affected stock varies

from year to year due to load growth affects.

The annual unit energy consumption for distribution transformers for affected stock is

given by the following equation:

Eq. 10.11

where:

ENL = rated no-load losses per kVA capacity, 

ELL = rated load losses per kVA capacity,

RMS = root mean square, and

LAdjust(y) = loading adjustment factor for year y.

Once the unit energy consumption for affected stock is defined, only one more input is

necessary to complete the NES calculation: the site-to-source conversion factor.

10.2.2.7 Electricity Site-to-Source Conversion

The source conversion factor for electricity is the factor by which site energy (in kWh) is

multiplied to obtain primary (source) energy (in Btu). Since the NES estimates the change in

energy use of the resource (e.g., the power plant), the source conversion factor is necessary to

account for losses in generation, transmission, and distribution. After calculating energy

consumption at the site, the Department multiplied it by the conversion factor to obtain primary

energy consumption, expressed in quads. This conversion permits comparison across (source)

fuels by taking into account the heat content of different fuels and the efficiency of different

energy conversion processes. The annual values are the U.S. average conversion factors for

electricity generation for both peak and base load reduction. The Department used marginal heat

rates corresponding to base load for no-load losses (or core-losses) and rates corresponding to

peak load for load losses (or coil losses). It used these differential rates because load losses are

higher during transformer peak loads while no-load losses occur at all times. The Department

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a

 For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration

(DOE/EIA) documentation. A useful summary is National Energy Modeling System: An Overview 2000.

6

 DOE/EIA

approves use of the name NEM S to describe only an official version of the model without any modification to code or

data. Because the analysis entails some minor code modifications and the model is run under policy scenarios that are

variations on DOE/EIA assumptions, the name NEMS-BT refers to the model as used here (BT is DOE’s Building

Technologies Program, under whose aegis this work was performed).

10-13

obtained these conversion factors using a variant of the NEMS, called NEMS-BT.a Table 10.3.2

presents the average annual conversion factors that the Department used. 

Table 10.2.2 Average Site-to-Source Conversion Factors for No-Load Losses and Load

Losses 

Year For No-Load Losses For Load Losses

2007 3.370 2.550

2008 3.156 2.403

2009 2.988 2.403

2010 2.820 2.403

2011 2.668 2.403

2012 2.507 2.403

2013 2.508 2.350

2014 2.391 2.296

2015 2.381 2.296

2016 2.415 2.262

2017 2.417 2.237

2018 2.331 2.212

2019 2.335 2.209

2020–35 2.326 2.178

The Department used a time-series projection of conversion factors, changing from year

to year, which it calculated as follows:

1. Start with an integrated projection of electricity supply and demand (e.g., the Annual

Energy Outlook’s (AEO 2003) reference case)7 and extract the source energy

consumption.

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2. Estimate projected energy savings due to possible standards for each year (e.g., using the

NES spreadsheet model).

3. Feed these energy savings back to the NEMS-BT model as a new scenario, specifically a

deviation from the reference case, to obtain the corresponding source energy

consumption. 

4. Obtain the difference in source energy consumption between this candidate standard

level scenario and the reference case.

5. Divide the source energy savings in Btu, adjusted for load-specific transmission and

distribution losses, by the site energy savings in kWh to provide the time series of

conversion factors in Btu per kWh.

The conversion factors change over time and account for the displacement of generating

sources. Furthermore, the NES spreadsheet model includes conversion factors for each year of

the projection. The Department and stakeholders can examine the effects of alternative

assumptions by revising this column of numbers.

The conversion of site energy savings to source energy savings and the summation of

energy savings over the forecast period complete the NES calculations. The results section

(section 10.4) presents the output from the NES model. The next section describes the technical

details of the NPV calculation.

10.3 NET PRESENT VALUE CALCULATION 

The Department estimated the national financial impact on consumers from the

imposition of new energy-efficiency standards with a national NPV accounting component in the

National Impact spreadsheet. The Department combined output of the shipments model with

energy savings and financial data from the LCC to calculate an annual stream of costs and

benefits resulting from candidate distribution transformer energy efficiency standards. The

Department discounted this time series to 2001 and summed its resulting in the national NPV. 

The Department selected 2001 as the NPV analysis year for consistency with the equipment cost

data, which is from 2001.

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10.3.1 Net Present Value Overview

The NPV is the present value of the incremental economic impact of a candidate standard

level. Like the NES, the NPV calculation started with transformer shipments and transformer

stocks, estimates of which are outputs from the shipments model. The Department then obtained

estimates of transformer first costs, losses, and average marginal electricity costs from the LCC

analysis. The Department proceeded to calculate the amount spent on transformer purchases and

installation. The Department then calculated the corresponding operating costs by applying the

marginal prices to the energy used (both energy and electricity system capacity) by the stock of

transformers for each year, for both a base case and standards case. Over time in the standards

case, more-expensive, but more-efficient transformers gradually replace less-efficient

transformers. Thus, the operating cost per unit capacity used by the stock of transformers

gradually decreases in the standards case relative to the base case while the equipment costs

increase. The Department discounted purchases and expenses and operating costs for

transformers using a simple national average discount factor. The discount factor converts a

future expense or benefit to a present value for that expense or benefit. The difference in present

value of all expenses and benefits between the base case and standards scenario is the national

NPV impact. The Department calculated the NPV impact from transformers that were purchased

between the present and 2035, inclusive, to calculate the total NPV impact from purchases

during the forecast period. 

Mathematically, NPV is the value in the present time of a time series of costs and

savings, described by the equation:

Eq. 10.12

where:

PVS = the present value of electricity savings, and 

PVC = the present value of equipment costs including installation. 

PVS and PVC are determined according to the following expressions:

Eq. 10.13

where:

OCBase/Cap(y) = operating cost per unit capacity of transformer for the base

case in year y,

Aff_Stock(y) = stock of transformers of all vintages that are operational in

year y,

y = the year (from effective date of the candidate standard to

the year when units purchased in 2035 retire), and

Discount Factor(y) = discount factor for the year y is defined in Eq. 10-14 and

the discount rate is described in section 10.3.2.7. 

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Eq. 10.14

where:

reference year = year 2001.

Eq. 10.15

where:

FCStd/Cap (y) = first cost of the transformer per unit of capacity for a

candidate standard level Std in year y. This quantity is

defined in Eq. 10.28 and described in section 10.3.2.1., 

Std_year = the year standards come into effect, and

Ship (y) = shipments of transformers in year y for the standards case.

The Department calculated NPV from the projections of national expenditures for

distribution transformers, including purchase price (equipment and installation price) and

operating costs (electricity and maintenance costs). The Department calculated costs and

savings as the difference between a candidate standards case and a base case scenario without

national standards. It discounted future costs and savings to the present.

The Department calculated a discount factor from the discount rate and the number of

years between the year to which the sum is being discounted (2001) and the year in which the

costs and savings occur. The NPV is the sum over time (2004-2070) of the discounted net

financial savings. 

The following sections describe the inputs specific to the NPV calculation in detail.

10.3.2 Net Present Value Inputs

The NPV model inputs include cost inputs, selected inputs that are important for detailing

electricity capacity costs, and several of the inputs used by the NES calculation. This section

details those inputs that have not yet been described as part of the NES and shipments models. 

The specific list of inputs for the NPV is as follows:

1. First Cost

2. Operating Cost

3. Peak Responsibility Factor

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4. Initial Peak Load

5. Electricity Price Forecast Scalar

6. Marginal Electricity Costs

7. Discount Rate

The first cost includes all of the initial costs that are incurred with the installation of a

transformer. Generally, first cost increases with the increased efficiency that may be required by

a candidate standard level. Operating cost includes the annual costs of operating a transformer. 

In this analysis, operating cost includes both energy and capacity costs for supplying both noload and load losses. The peak responsibility factor is a necessary input for estimating the

capacity costs incurred from load losses at the initial peak load. The electricity price forecast

scalar provides the forecasted increase or decrease in electricity prices over the cost accounting

period that ranges from 2001 to the year 2070. Marginal electricity costs convert physical

transformer loss estimates into financial economic impacts. The discount rate represents the

time value of money and allows the Department to estimate the present value of a future

monetary cost or benefit.

The next section begins the detailed discussion of NPV inputs with a description of the

transformer first costs that the Department used. 

10.3.2.1 First Cost 

The Department expresses first cost in terms of cost per unit capacity. Specifically, the

Department defines the first cost of acquiring a transformer with the following equation:

FC/Cap = (P + Install)/Cap Eq. 10.16

where: 

FC = the first cost, 

Cap = the rated capacity of the transformer, 

P = the price of the transformer including shipping and taxes, and

Install = the installation cost of the transformer. 

In the NPV calculation, these values are obtained from the LCC calculation as the

averages for specific design lines. The Department applied an adjustment factor to convert the

first cost of a representative design to an estimated average cost for a distribution of sizes within

a particular product class. The adjustment incorporates the 0.75 scaling rule as described in the

NES section and the design line to product class mapping. This adjustment factor is explained 

in detail in sections 10.2.2.1 and 10.2.2.2. The costs are expressed in units of 2001 dollars per

kVA of rated transformer capacity.

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Table 10.3.1 shows the resulting mean first costs per kVA for distribution transformers

by product class and candidate standard level.

Table 10.3.1 First Cost of Distribution Transformers by Candidate Standard Levels and

Product Class (2001$/kVA)

Product Class Base CSL 1* CSL 2 CSL 3 CSL 4 CSL 5

PC 1, Liquid-Immersed, MV, Single-Phase 64.80 65.76 68.9 77.94 87.01 97.35

PC 2, Liquid-Immersed, MV, Three-Phase 18.39 19.32 20.45 24.66 25.86 29.81

PC 3, Dry-Type, LV, Single-Phase 58.14 63.13 66.9 66.93 74.09 78.53

PC 4, Dry-Type, LV, Three-Phase 35.97 36.84 38.36 41.12 46.99 56.22

PC 5, Dry-Type, MV, Single-Phase 22.47 25.59 27.08 29.06 34.29 38.69

PC 6, Dry-Type, MV, Three-Phase 17.76 21.47 22.32 24.14 28.63 31.5

PC 7, Dry-Type, MV, Single-Phase 29.10 32.46 34.10 38.04 42.7 46.88

PC 8, Dry-Type, MV, Three-Phase 19.78 22.12 23.29 26.57 30.29 33.77

PC 9, Dry-Type, MV, Single-Phase 12.57 20.01 22.17 26.56 28.02 35.45

PC 10, Dry-Type, MV, Three-Phase 20.77 22.27 24.39 28.99 30.43 38.25

*CSL = Candidate Standard Level

The next section presents the operating costs, which are substantially more complex than

the transformer first costs.

10.3.2.2 Operating Cost

Operating costs are an essential, yet complex, part of calculating national economic

impact from a candidate distribution transformer standard. The Department used eleven distinct

inputs to calculate operating costs. This large number of inputs is necessary because

transformers have both no-load and load losses, and because electricity has both energy and

capacity costs. The combination of distinct losses and distinct capacity and energy costs creates

the necessity for four price and two loss coefficients. Potential load growth requires a load

growth adjustment factor. Peak loading, peak load coincidence, and average loading require 

three additional factors to characterize load losses. Finally, the Department used an electricity

price forecast scalar to characterize future trends in electricity prices consistent with the AEO

forecast.

Transformer operating cost is the annual cost of transformer losses. The Department

assumed zero maintenance cost in calculating the transformer operating cost. The Department

calculated annual operating cost using the following formula to capture the diversity of potential

factors that can affect transformer operating costs:

OC/Cap = EPFS(y) × (ENL × (NLLMCC + 8760 × NLLMEC) + ELL × (LAdjust(y))2

 × (PRF × PL2 × LLMCC + 8760 × RMS2 × LLMEC))/Cap Eq. 10.17

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where: 

OC = the operating cost, 

Cap = the rated capacity of the transformer, 

EPFS(y) = the electricity price forecast scalar for year y, 

ENL = the no-load losses at rated load,

NLLMCC = the no-load loss marginal cost of capacity, 

NLLMEC = the no-load loss marginal energy cost,

ELL = the load losses at rated load,

LAdjust(y) = the load growth adjustment factor in year y,

PRF = the peak responsibility factor, 

PL = the initial peak load,

LLMCC = the load loss marginal cost of capacity, 

RMS = the root mean square loading of the transformer, and 

LLMEC = the load loss marginal energy cost.

The Department expressed the costs in units of 2001 dollars per kVA of rated capacity. 

One additional complexity in the operating cost equation that is shared with the NES calculation,

is that the Department applied an adjustment factor to incorporate the 0.75 rule to ENL and ELL, as

explained in sections 10.2.2.1 and 10.2.2.2, to convert from design line data to product class

estimates.

The following four sections explain the inputs of the operating cost equation that are not

explained in the NES section. 

10.3.2.3 Peak Responsibility Factor 

The peak responsibility factor (PRF), in combination with the initial peak loading, is

necessary for estimating the capacity cost impacts of transformer load losses. The transformer

PRF is the square of the ratio of the transformer load at the time of the customer peak load to the

transformer peak load. The Department used the average PRF from the hourly and/or monthly

load analysis for the liquid-immersed and dry-type transformers, respectively, as reported in the

LCC analysis. Table 10.3.2 presents the PRFs used in the analysis for the ten product classes.

Table 10.3.2 Peak Responsibility Factors by Product Class

PC 1 PC 2 PC 3 PC 4 PC 5 PC 6 PC 7 PC 8 PC 9 PC 10

PRF 0.37 0.61 0.47 0.49 0.50 0.53 0.51 0.53 0.54 0.54

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10.3.2.4 Initial Peak Load 

The initial peak loading, in combination with the PRF, is necessary for calculating

capacity cost impacts from transformer load losses. The initial peak loading is the annual perunit peak load on the transformer during the first year of operation. The initial peak load is

estimated as a percentage of the rated peak load of the transformer. The IEEE’s Draft Guide for

Distribution Transformer Loss Evaluation4 defines a similar but distinct measure of peak

transformer loading called an "Equivalent Annual Peak Load" that accounts for changes in peak

load over the life of the transformer. Rather than use the equivalent annual peak load method,

the Department characterized a range of possible initial peak loads by defining a distribution of

initial peak loads. Chapter 6, section 6.3.4 provides further description. Table 10.3.3 presents

the initial peak loadings used in the analysis for the ten product classes.

Table 10.3.3 Initial Peak Loading by Product Class

PC 1 PC 2 PC 3 PC 4 PC 5 PC 6 PC 7 PC 8 PC 9 PC 10

Initial Peak Loading 0.85 0.85 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75

10.3.2.5 Electricity Price Forecast Scalar 

The electricity price forecast scalar converts current electricity costs for forecasted costs

for the period 2001 to 2070. The electricity price forecast scalar is the ratio of the unit cost of

electricity in real dollars in a given year to the real cost of electricity in the year 2001. The

Department used AEO 2003 forecasts to obtain the electricity price forecast scalar. For the

period beyond 2025, the Department used the real price trend from 2015 to 2025 to extrapolate

the electricity price scalar. 

10.3.2.6 Marginal Electricity Costs

The characterization of four distinct marginal electricity costs is necessary to calculate

the operating costs of transformers and the financial impact of distribution transformer efficiency

standards. In an electricity system, there are both energy costs and capacity costs. Depending

on the load shape of a particular load, the average value of capacity costs and energy costs are

distinct. Since no-load losses and load losses have distinct load shapes compared to each other

and since different customers have different load shapes, such costs vary by loss type and by the

product class of the transformer. The Department therefore used distinct marginal energy and

capacity costs for no-load losses and load losses for each transformer product class. No

transformer size scaling is necessary for the marginal costs, although the design-line-to-productclass mapping described in section 10.2.2.2 needs to be applied to convert the design line output

from the LCC to product class information for the NPV calculation. The Department calculated

capacity costs in units of 2001$/kW/year, while energy costs are in units of 2001$/kWh. The

names for the four types of marginal cost are: no-load loss marginal capacity cost (NLLMCC),

load loss marginal capacity cost (LLMCC), no-load loss marginal energy cost (NLLMEC), and

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load loss marginal energy cost (LLMEC). Table 10.3.4 summarizes the four marginal costs for

the ten product classes. 

Table 10.3.4 Marginal Energy and Demand Cost by Product Class

Marginal Demand Cost by Product Class ($/kW)

PC 1 PC 2 PC 3 PC 4 PC 5 PC 6 PC 7 PC 8 PC 9 PC 10

NLL 102.3 117.7 79.2 85.3 87.9 88.5 87.7 88.6 89.1 89.1

LL 55.1 61.6 55.2 61.4 61.4 68.7 67.4 68.9 70.3 70.3

Marginal Energy Cost by Product Class ($/kWh)

PC 1 PC 2 PC 3 PC 4 PC 5 PC 6 PC 7 PC 8 PC 9 PC 10

NLL 0.025 0.025 0.059 0.055 0.053 0.053 0.053 0.053 0.052 0.052

LL 0.035 0.032 0.061 0.057 0.055 0.055 0.055 0.055 0.055 0.055

10.3.2.7 Discount Rate

The discount rate expresses the time value of money, and is the final input to the NPV

calculation. The Department used a real discount rates of 3.0 and 7.0 percent as established by

the Office of Management and Budget (OMB) in Circular A-4, Regulatory Analysis.

8

 The

discount rates that the Department used in the LCC are distinct from those it used in the NPV

calculations, in that the LCC discount rates reflect the owner cost of capital and the financial

environment of electric utilities and commercial and industrial entities.

10.4 RESULTS

10.4.1 National Energy Savings and Net Present Value from Candidate Standard Levels

 The NES and NPV results from the NES spreadsheet model for CSL 1 through CSL 5

are shown in Table 10.4.1. Tables 10.4.2 and 10.4.3 present NPV and NES results for liquidimmersed transformers by product class. Tables 10.4.4 and 10.4.5 present NPV and NES results

for dry-type transformers by product class. It should be reiterated that, currently, the NES

spreadsheet model uses discrete point-values rather than a distribution of values for all inputs. 

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Table 10.4.1 Summary of Cumulative NES (2007-2035) and NPV (2007-2070) Impact

Distribution

Transformers Analysis Discount Rate(percent)

Candidate Standard Level

CSL 1 CSL 2 CSL 3 CSL 4 CSL 5

Liquid-immersed

NES (quads) 1.90 3.04 5.22 6.97 7.86

NPV (billion 2001$)

3 6.56 8.33 6.45 5.10 -0.79

7 1.68 1.50 -1.21 -3.19 -7.39

Dry-type

NES (quads) 4.98 5.75 6.71 7.46 8.18

NPV (billion 2001$)

3 32.83 37.24 41.95 43.80 44.45

7 10.09 11.27 12.39 12.25 11.41

Figures 10.4.1 through 10.4.4 illustrate the typical pattern of national savings and costs

resulting from standards for liquid-immersed and dry-type transformers over time. The figures

show the nature of net savings for all five candidate standard levels relative to the base case.

10.4.1.1 Liquid-Immersed Results

Figure 10.4.1 Liquid-Immersed Distribution

Transformers: NES and NPV

Impacts: 3% Discount Rate

Figure 10.4.2 Liquid-Immersed Distribution

Transformers: NES and NPV

Impacts: 7% Discount Rate

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Table 10.4.2 Net Present Value During 2007-2070: Liquid-Immersed Transformers by

Product Class

Product Class

Net Present Value ($Billions)

Discount Rate: 3 percent Discount Rate: 7 percent

CSL 1 CSL 2 CSL 3 CSL 4 CSL 5 CSL 1 CSL 3 CSL 3 CSL 4 CSL 5

1. Liquid-immersed, mediumvoltage, single-phase 2.96 3.03 0.42 -1.30 -7.12 0.78 0.30 -1.88 -3.77 -7.18

2. Liquid-immersed, mediumvoltage, three-phase 3.59 5.30 6.03 6.41 6.33 0.90 1.20 0.67 0.58 -0.21

Total 6.56 8.33 6.45 5.10 -0.79 1.68 1.50 -1.21 -3.19 -7.39

Table 10.4.3 Cumulative Primary Energy Savings During 2007-2035: Liquid-Immersed

Transformers by Product Class

Product Class

Cumulative Primary Energy Savings (Quads)

CSL 1 CSL 3 CSL 3 CSL 4 CSL 5

1. Liquid-immersed, medium-voltage, single-phase 0.94 1.48 2.59 3.97 4.26

2. Liquid-immersed, medium-voltage, three-phase 0.96 1.55 2.63 3.01 3.60

Total 1.90 3.04 5.22 6.97 7.86

10.4.1.2 Dry-Type Results

Figure 10.4.3 Dry-Type Distribution

Transforms: NES and NPV

Impacts: 3% Discount Rate

Figure 10.4.4 Dry-Type Distribution

Transforms: NES and NPV

Impacts: 7% Discount Rate

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Table 10.4.4 Net Present Value During 2007-2070: Dry-Type Transformers by Product

Class

Product Class

Net Present Value ($Billions)

Discount Rate: 3 percent Discount Rate: 7 percent

CSL 1 CSL 2 CSL 3 CSL 4 CSL 5 CSL 1 CSL 3 CSL 3 CSL 4 CSL 5

3. Dry-type, low-voltage,

single-phase 2.34 2.52 2.58 2.62 2.61 0.71 0.74 0.76 0.74 0.72

4. Dry-type, low-voltage,

three-phase 29.14 32.99 37.07 38.85 39.68 9.03 10.07 11.07 11.04 10.37

5. Dry-type, medium-voltage,

single-phase, 20-45 kV BIL 0.0073 0.0084 0.0099 0.0102 0.0098 0.0021 0.0023 0.0027 0.0025 0.0021

6. Dry-type, medium-voltage,

three-phase, 20-45 kV BIL 0.32 0.36 0.42 0.42 0.40 0.08 0.09 0.11 0.09 0.07

7. Dry-type, medium-voltage,

single-phase, 46-95 kV BIL 0.0055 0.0070 0.0087 0.0087 0.0084 0.0015 0.0018 0.0021 0.0017 0.0013

8. Dry-type, medium-voltage,

three-phase, 46-95 kV BIL 0.93 1.24 1.71 1.73 1.63 0.25 0.32 0.41 0.34 0.24

9. Dry-type, medium-voltage,

single-phase, >96 kV BIL 0.0006 0.0009 0.0011 0.0013 0.0009 0.0002 0.0002 0.0002 0.0003 0.0001

10. Dry-type, medium-voltage,

three-phase, >96 kV BIL 0.09 0.13 0.14 0.17 0.12 0.02 0.03 0.03 0.04 0.01

Total 32.83 37.24 41.95 43.80 44.45 10.09 11.27 12.39 12.25 11.41

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Table 10.4.5 Cumulative Primary Energy Savings During 2007-2035: Dry-Type

Transformers by Product Class

Product Class

Cumulative Primary Energy Savings (Quads)

CSL 1 CSL 3 CSL 3 CSL 4 CSL 5

3. Dry-type, low-voltage, single-phase 0.35 0.38 0.39 0.42 0.43

4. Dry-type, low-voltage, three-phase 4.39 5.07 5.87 6.53 7.20

5. Dry-type, medium-voltage, single-phase, 20-45 kV BIL 0.0012 0.0014 0.0017 0.0020 0.0021

6. Dry-type, medium-voltage, three-phase, 20-45 kV BIL 0.05 0.06 0.08 0.09 0.09

7. Dry-type, medium-voltage, single-phase, 46-95 kV BIL 0.0010 0.0012 0.0017 0.0019 0.0021

8. Dry-type, medium-voltage, three-phase, 46-95 kV BIL 0.17 0.21 0.33 0.38 0.41

9. Dry-type, medium-voltage, single-phase, >96 kV BIL 0.0001 0.0002 0.0002 0.0003 0.0003

10. Dry-type, medium-voltage, three-phase, >96 kV BIL 0.02 0.02 0.03 0.04 0.04

Total 4.98 5.75 6.71 7.46 8.18

10.5 SPREADSHEET DESCRIPTION AND INSTRUCTIONS

10.5.1 Spreadsheet Description

The transformer national impact spreadsheet has two components: a) Shipments and b)

NES/NPV. The shipments component contains all of the necessary input information and

calculations to forecast transformer shipments by product class for candidate standard levels. 

The national impact spreadsheet is contained in a Microsoft Excel file available at the DOE

website:

http://www.eere.energy.gov/buildings/appliance_standards/commercial/dist_transformers.html 

10.5.1.1 Introduction

This worksheet provides an outline of the contents of the entire national impact

spreadsheet and describes the function of individual worksheets.

10.5.1.2 Model Flowchart

This worksheet presents the flowchart of the shipments and the NES modules.

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10.5.2 NES/NPV

The purpose of the NES/NPV part of the national impact spreadsheet is to calculate some

of the key quantities by which a candidate energy efficiency standard may be evaluated. Two

such quantities are national source energy savings and NPV. Source energy is total energy saved

(or reduction in losses) by transformers. NPV is a measure of the net benefit to consumers due

to an energy-efficiency standard. This section provides a basic description of the NES module

and its various component worksheets.

10.5.2.1 Input Worksheets

There are several worksheets that contain data from other sources, which are used in the

calculation of the NES and NPV. These worksheets are:

10.5.2.2 Shipments and Affected Stock (from “Stock” sheets)

To forecast energy savings from transformers as a result of a standard, it is crucial to

have an accurate estimate of transformer shipments and subsequent efficiency of the stock. The

shipments calculation comprises its own analysis, described earlier in this chapter. The NES

calculation references shipments and affected stock data from the “Stock” sheets (12 in all—6

sheets each for liquid-immersed and dry-type transformers for the base case and the candidate

standard levels).

10.5.2.3 Marginal Prices

The “LCC Data by Product Class” worksheet contains the marginal energy price and the

demand price data. Marginal prices, which differ from average prices, are used to calculate

savings in operating cost due to improved efficiency of the transformer stock. This worksheet

also contains energy loss (or consumption) data, referred to as the load and the no-load loss data,

for different product classes. The data in this worksheet use an estimate of the market share

(from the “Market Share Data” worksheet) by efficiency level to calculate average values of

equipment cost, load, and no-load losses for each standard level.

10.5.2.4 Site2Source

This worksheet contains the conversion factors for calculating source energy from site

energy. Site energy is the energy saved by a transformer itself. Source energy includes all

energy used in the production and delivery of the energy to the site. Source energy consumption

has general economic, industrial, and environmental effects and is therefore a key indicator of

the desirability of any candidate standard.

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10.5.2.5 Calculation Worksheet

This worksheet performs all of the calculations necessary for an assessment of NPV and

source energy savings. The algorithm of the model is implemented by applying formulae to

input data contained in the above worksheets. The calculation worksheet also serves a ‘tracking’

function, displaying intermediate results for each year.

10.5.2.6 Annual Impacts

This worksheet makes several calculations for the base case (in the absence of a national

standard) as well as all the candidate standard levels. Savings are calculated as the difference

between the base case and the candidate standard level energy consumption. The total

equipment costs for each year are derived from shipments and average first costs (retail price

plus installation costs). The total fuel cost savings are calculated by combining unit fuel prices,

and the load and no-load losses of the transformer units in stock (affected stock, in this case). 

The capacity savings are calculated using the marginal demand price along with the load and noload losses of the transformer units in stock. Finally, the total source energy savings of the

transformers is calculated using the marginal heat rates located in the “Site2Source” worksheet.

10.5.2.7 Output Worksheets

The output worksheets serve two purposes. First, they provide both detailed and

summarized results of the calculation worksheets. Second, they serve as an interface to the

utility impact and national employment analyses that DOE will conduct at a later stage of this

rulemaking.

10.5.2.8 Output

This worksheet presents the consolidated outputs produced for each product class when

the user runs the macro for All Classes. The All Classes button is on the “Summary of Results”

worksheet. Total savings and NPV for the forecast period are summarized in tables for each

standard level. For convenience, these results are also summarized on the “Summary of Results”

worksheet.

10.5.2.9 Summary of Results

In addition to providing the summaries of NES and NPV for each standard level, this

worksheet presents a graph of the NES and NPV across standard level by product class.

10.5.2.10 Charts

This worksheet displays the savings charts for years 2007 through 2035 produced for all

the candidate standard levels when the user runs a specific scenario or a product class in the

"Summary of Results" sheet. 

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10.6 USING THE SPREADSHEET

The “Summary of Results” worksheet serves as the user interface for running the model

for a particular product class. To provide flexibility, the spreadsheet facilitates some user

modifications to the model. The user may select a particular macroeconomic forecast which

determines fuel prices, electricity sales, and income data to be used by the model. The user may

also directly input new values for implicit discount rates, which quantify consumer preference

for immediate, instead of delayed, savings. Additionally, the user can make a selection for longterm purchase elasticity for transformers.

The All Classes button on the “Summary of Results” worksheet runs the model for all

classes and creates a summary of outputs in the “Output” sheet. 

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REFERENCES

1. HVOLT Consultants Inc., P. Hopkinson, and J. Puri, Distribution Transformer Market

Shipment Estimates for 2001, February 17, 2003. 3704 High Ridge Road, Charlotte, NC,

28270, tel: (704) 846-3290, e-mail: P.Hopkinson@hotmail.com. Prepared for Navigant

Consulting, Inc.,Washington DC.

2. U.S. Department of Commerce - Bureau of Economic Analysis, Industry Economic

Division Information Guide, II. Gross Domestic Product by Industry Accounts, 1977-

2001 Shipments of Manufacturing Industries, 2002. (Last accessed February, 2003).

<For Readme page, see http://www.bea.gov/bea/dn2/readves.htm For data, go to

http://bea.gov/bea/pn/ndn0304.exe>

3. U.S. Department of Energy-Energy Information Administration, Annual Energy Review

2001, Chapter 8: Electricity, Table 8.5 Electricity End Use, 1949-2001, 2002. (Last 

accessed May 29, 2003). <http://www.eia.doe.gov/emeu/aer/txt/stb0805.xls>

4. Institute of Electrical and Electronics Engineers Inc, Draft Guide for Distribution

Transformer Loss Evaluation, October, 2001. 345 East 47th Street, New York, NY.

Report No. IEEE PC57.12.33/D8. 

5. Institute of Electrical and Electronics Engineers Inc, Guide For Loading Mineral OilImmersed Transformers, 1995. 345 East 47th Street, New York, NY. Transformer

Committee of the IEEE Power Engineering Society. Report No. IEEE Std C57.91-1995. 

6. U.S. Department of Energy-Energy Information Administration, National Energy

Modeling System: An Overview 2003, 2003. Report No. DOE/EIA-0581(2003).

<http://www.eia.doe.gov/oiaf/aeo/overview/index.html>

7. U.S. Department of Energy - Energy Information Administration, Annual Energy

Outlook 2003: With Projections Through 2025, January, 2003. Washington, DC. Report

No. DOE/EIA-0383(2003). <http://www.eia.doe.gov/oiaf/aeo>

8. U.S. Office of Management and Budget, Circular A-4: Regulatory Analysis, September

17, 2003. <http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf> 

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