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CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

TABLE OF CONTENTS

3.1 INTRODUCTION ............................................................................................... 3-1

3.2 DISTRIBUTION TRANSFORMER DEFINITION ........................................... 3-1

3.3 EQUIPMENT CLASSES .................................................................................... 3-6

3.4 NATIONAL SHIPMENT ESTIMATE............................................................... 3-7

3.5 MANUFACTURERS OF DISTRIBUTION TRANSFORMERS .................... 3-11

3.5.1 Potential Small Business Impacts...................................................................... 3-12

3.5.2 Distribution and Sales Channels........................................................................ 3-12

3.6 TOTAL OWNING COST EVALUATION....................................................... 3-13

3.7 VOLUNTARY PROGRAMS............................................................................ 3-15

3.7.1 National Electrical Manufacturers Association TP 1 Standard ......................... 3-15

3.7.2 National Electrical Manufacturers Association – NEMA Premium Program... 3-16

3.7.3 Energy Star Transformers.................................................................................. 3-17

3.7.4 Consortium for Energy Efficiency..................................................................... 3-17

3.7.5 Federal Energy Management Program .............................................................. 3-18

3.7.6 National Grid ..................................................................................................... 3-18

3.7.7 Seattle City Light ............................................................................................... 3-18

3.8 REGULATORY PROGRAMS ......................................................................... 3-18

3.8.1 U.S. National Energy Bill – Energy Policy Act of 2005 ................................... 3-19

3.8.2 Canadian Efficiency Standard............................................................................ 3-19

3.8.3 Mexican Efficiency Standard............................................................................. 3-24

3.9 TECHNOLOGY ASSESSMENT...................................................................... 3-28

3.9.1 Distribution Transformer Types ........................................................................ 3-28

3.9.2 Transformer Efficiency Levels.......................................................................... 3-29

3.9.3 Transformer Losses............................................................................................ 3-30

LIST OF TABLES

Table 3.2.1 Normal Impedance Ranges for Liquid-Immersed Transformers................. 3-5

Table 3.2.2 Normal Impedance Ranges for Dry-Type Transformers............................. 3-5

Table 3.3.1 Distribution Transformer Equipment Classes.............................................. 3-7

Table 3.4.1 National Distribution Transformer Shipment Estimates for 2009............. 3-10

Table 3.7.1 National Electrical Manufacturers Association TP 1 Efficiency Levels for 

Liquid-Immersed Distribution Transformers................................................................. 3-16

Table 3.7.2 National Electrical Manufacturers Association TP 1 Efficiency Levels for 

Dry-Type Distribution Transformers............................................................................. 3-16

Table 3.7.3 NEMA Premium Efficiency Levels for Low-Voltage, Dry-Type Distribution 

Transformers.................................................................................................................. 3-17

Table 3.8.1 Canadian Efficiency Regulations for Dry-Type Transformers.................. 3-23
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Table 3.8.2 Proposed Revised Canadian Efficiency Regulations for Medium-Voltage 

Dry-Type Transformers................................................................................................. 3-23

Table 3.8.3 Characteristics of Regulated Distribution Transformers in Mexico.......... 3-25

Table 3.8.4 Minimum Efficiency Levels for Transformers in Mexico......................... 3-26

Table 3.8.5 Maximum Allowed Losses for Transformers in Mexico........................... 3-27

Table 3.9.1 Options and Impacts of Increasing Transformer Efficiency...................... 3-32

LIST OF FIGURES

Figure 3.4.1 Liquid-Immersed Unit Shipments, 2009 .................................................... 3-8

Figure 3.4.2 Liquid-Immersed Megavolt-Ampere Capacity Shipments, 2009 .............. 3-8

Figure 3.4.3 Dry-Type Unit Shipments, 2009 ................................................................ 3-9

Figure 3.4.4 Dry-Type Megavolt-Ampere Capacity Shipments, 2009........................... 3-9

Figure 3.5.1 Market Delivery Channels for Distribution Transformers....................... 3-12

Figure 3.9.1 Transformer Losses Vary with Load (75 Kilovolt-Ampere Dry-Type)... 3-29

Figure 3.9.2 Transformer Efficiency Varies with Load................................................ 3-30
3-1

CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

3.1 INTRODUCTION

This chapter provides a profile of the distribution transformer industry in the United 

States. The U.S. Department of Energy (DOE) developed the preliminary market and 

technology assessment presented in this chapter primarily from publicly available information. 

This assessment is helpful in identifying the major manufacturers and their equipment

characteristics, which form the basis for the engineering and life-cycle cost (LCC) analyses.

3.2 DISTRIBUTION TRANSFORMER DEFINITION

The definition of a distribution transformer was established in the Energy Policy Act 

(EPACT) of 2005, and further refined by DOE when it was codified into the Code of Federal 

Regulations (CFR) on April 27, 2006. 10 CFR 431.192; 71 FR 24972.

EPACT 2005 established that the definition of a distribution transformer would be as 

follows:

The term 'distribution transformer' means a transformer that -

(i) has an input voltage of 34.5 kilovolts or less;

(ii) has an output voltage of 600 volts or less; and 

(iii) is rated for operation at a frequency of 60 Hertz.

The term 'distribution transformer' does not include –

(i) a transformer with multiple voltage taps, the highest of which equals at least 20 

percent more than the lowest;

(ii) a transformer that is designed to be used in a special purpose application and is 

unlikely to be used in general purpose applications, such as a drive transformer, 

rectifier transformer, auto-transformer, impedance transformer, regulating 

transformer, sealed and non-ventilating transformer, machine tool transformer, 

welding transformer, grounding transformer, or testing transformer; or 

(iii) any transformer not listed in clause (ii) that is excluded by the Secretary by rule 

because 

(I) the transformer is designed for a special application;

(II) the transformer is unlikely to be used in general purpose applications; and

(III) the application of standards to the transformer would not result in 

significant energy savings.

The term  ̳low-voltage dry-type distribution transformer‘ means a distribution transformer that -

(A) has an input voltage of 600 volts or less;

(B) is air-cooled; and

(C) does not use oil as a coolant.
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The term  ̳transformer‘ means a device consisting of two or more coils of insulated wire that 

transfers alternating current by electromagnetic induction from one coil to another to change the 

original voltage or current value.

In the April 2006 final rule, DOE clarified some of the exemptions which were not 

defined in the statute, based on the test procedure rulemaking which had been developing the 

definition of a distribution transformer. These definitions were based primarily on industry 

sources including the Institute of Electrical and Electronics Engineers (IEEE) and the National 

Electrical Manufacturers Association (NEMA). In addition, EPACT 2005 did not provide kVA 

ranges which were used by DOE in this rulemaking proceeding to bound its scope of coverage. 

Therefore, in the April 2006 final rule, DOE established kilovolt-ampere (kVA) ranges that were 

consistent with the scope of applicability for the test procedure and energy conservation 

standards rulemakings DOE had been conducting on distribution transformers. This means that 

DOE‘s coverage authority granted by Congress is broader than that subset of distribution 

transformers that are being regulated in this proceeding.

The following text includes all the definitions that were codified into 10 CFR 431.192 in 

the April 2006 final rule for distribution transformers. 

Autotransformer means a transformer that:

(a) Has one physical winding that consists of a series winding part and a common 

winding part; 

(b) Has no isolation between its primary and secondary circuits; and 

(c) During step-down operation, has a primary voltage that is equal to the total of the 

series and common winding voltages, and a secondary voltage that is equal to the 

common winding voltage.

Basic model means a group of models of distribution transformers manufactured by a single 

manufacturer, that have the same insulation type (i.e., liquid-immersed or dry-type), have the 

same number of phases (i.e., single or three), have the same standard kVA rating, and do not 

have any differentiating electrical, physical or functional features that affect energy 

consumption. Differences in voltage and differences in basic impulse insulation level (BIL) 

rating are examples of differentiating electrical features that affect energy consumption.

Distribution transformer means a transformer that -

(1) Has an input voltage of 34.5 kV or less;

(2) Has an output voltage of 600 V or less;

(3) Is rated for operation at a frequency of 60 Hz; and

(4) Has a capacity of 10 kVA to 2500 kVA for liquid-immersed units and 15 kVA to 

2500 kVA for dry-type units; but

(5) The term ―distribution transformer‖ does not include a transformer that is an–

(i) Autotransformer;

(ii) Drive (isolation) transformer;

(iii) Grounding transformer;

(iv) Machine-tool (control) transformer;

(v) Nonventilated transformer;
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(vi) Rectifier transformer;

(vii) Regulating transformer;

(viii) Sealed transformer;

(ix) Special-impedance transformer;

(x) Testing transformer;

(xi) Transformer with tap range of 20 percent or more;

(xii) Uninterruptible power supply transformer; or

(xiii) Welding transformer.

Drive (isolation) transformer means a transformer that -

(a) Isolates an electric motor from the line;

(b) Accommodates the added loads of drive-created harmonics; and 

(c) Is designed to withstand the additional mechanical stresses resulting from an 

alternating current adjustable frequency motor drive or a direct current motor drive.

Efficiency means the ratio of the useful power output to the total power input.

Excitation current or no-load current means the current that flows in any winding used to excite 

the transformer when all other windings are open-circuited.

Grounding transformer means a three-phase transformer intended primarily to provide a neutral 

point for system-grounding purposes, either by means of: 

(a) A grounded wye primary winding and a delta secondary winding; or 

(b) A transformer with its primary winding in a zig-zag winding arrangement, and with 

no secondary winding.

Liquid-immersed distribution transformer means a distribution transformer in which the core and 

coil assembly is immersed in an insulating liquid.

Load loss means, for a distribution transformer, those losses incident to a specified load carried 

by the transformer, including losses in the windings as well as stray losses in the conducting 

parts of the transformer.

Machine tool (control) transformer means a transformer that is equipped with a fuse or other 

over-current protection device, and is generally used for the operation of a solenoid, contactor, 

relay, portable tool, or localized lighting.

Medium-voltage dry-type distribution transformer means a distribution transformer in which the 

core and coil assembly is immersed in a gaseous or dry compound insulating medium, and which 

has a rated primary voltage between 601 V and 35 kV.

No-load loss means those losses that are incident to the excitation of the transformer.

Nonventilated transformer means a transformer constructed so as to prevent external air 

circulation through the coils of the transformer while operating at zero gauge pressure.
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Phase angle means the angle between two phasors, where the two phasors represent 

progressions of periodic waves of either: 

(1) Two voltages; 

(2) Two currents; or 

(3) A voltage and a current of an alternating current circuit.

Phase angle correction means the adjustment (correction) of measurement data to negate the 

effects of phase angle error.

Phase angle error means incorrect displacement of the phase angle, introduced by the 

components of the test equipment.

Rectifier transformer means a transformer that operates at the fundamental frequency of an 

alternating-current system and that is designed to have one or more output windings connected to 

a rectifier.

Reference temperature means 20 ̊ C for no-load loss, 55 ̊ C for load loss of liquid-immersed 

distribution transformers at 50 percent load, and 75 ̊ C for load loss of both low-voltage and 

medium-voltage dry-type distribution transformers, at 35 percent load and 50 percent load, 

respectively. It is the temperature at which the transformer losses must be determined, and to 

which such losses must be corrected if testing is done at a different point. (These temperatures 

are specified in the test method in Appendix A to this part.)

Regulating Transformer means a transformer that varies the voltage, the phase angle, or both 

voltage and phase angle, of an output circuit and compensates for fluctuation of load and input 

voltage, phase angle or both voltage and phase angle.

Sealed Transformer means a transformer designed to remain hermetically sealed under specified 

conditions of temperature and pressure.

Special-Impedance Transformer means any transformer built to operate at an impedance outside 

of the normal impedance range for that transformer‘s kVA rating. The normal impedance range 

for each kVA rating for liquid-immersed and dry-type transformers is shown in Table 3.2.1 and 

Table 3.2.2, respectively.
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Table 3.2.1 Normal Impedance Ranges for Liquid-Immersed Transformers

Single-Phase Transformers Three-Phase Transformers

kVA Impedance (%) kVA Impedance (%)

10 1.0-4.5 15 1.0-4.5

15 1.0-4.5 30 1.0-4.5

25 1.0-4.5 45 1.0-4.5

37.5 1.0-4.5 75 1.0-5.0

50 1.5-4.5 112.5 1.2-6.0

75 1.5-4.5 150 1.2-6.0

100 1.5-4.5 225 1.2-6.0

167 1.5-4.5 300 1.2-6.0

250 1.5-6.0 500 1.5-7.0

333 1.5-6.0 750 5.0-7.5

500 1.5-7.0 1000 5.0-7.5

667 5.0-7.5 1500 5.0-7.5

833 5.0-7.5 2000 5.0-7.5

2500 5.0-7.5

Table 3.2.2 Normal Impedance Ranges for Dry-Type Transformers

Single-Phase Transformers Three-Phase Transformers

kVA Impedance (%) kVA Impedance (%)

15 1.5-6.0 15 1.5-6.0

25 1.5-6.0 30 1.5-6.0

37.5 1.5-6.0 45 1.5-6.0

50 1.5-6.0 75 1.5-6.0

75 2.0-7.0 112.5 1.5-6.0

100 2.0-7.0 150 1.5-6.0

167 2.5-8.0 225 3.0-7.0

250 3.5-8.0 300 3.0-7.0

333 3.5-8.0 500 4.5-8.0

500 3.5-8.0 750 5.0-8.0

667 5.0-8.0 1000 5.0-8.0

833 5.0-8.0 1500 5.0-8.0

2000 5.0-8.0

2500 5.0-8.0

Temperature Correction means the mathematical correction(s) of measurement data, obtained 

when a transformer is tested at a temperature that is different from the reference temperature, to 

the value(s) that would have been obtained if the transformer had been tested at the reference 

temperature.

Test Current means the current of the electrical power supplied to the transformer under test.

Test Frequency means the frequency of the electrical power supplied to the transformer under 

test.

Test Voltage means the voltage of the electrical power supplied to the transformer under test.

Testing Transformer means a transformer used in a circuit to produce a specific voltage or 

current for the purpose of testing electrical equipment. 
3-6

Total Loss means the sum of the no-load loss and the load loss for a transformer.

Transformer with Tap Range of 20 percent or more means a transformer with multiple voltage 

taps, the highest of which equals at least 20 percent more than the lowest, computed based on the 

sum of the deviations of the voltages of these taps from the transformer‘s nominal voltage. 

Uninterruptible Power Supply Transformer means a transformer that is used within an 

uninterruptible power system, which in turn supplies power to loads that are sensitive to power 

failure, power sags, over voltage, switching transients, line noise, and other power quality 

factors.

Waveform Correction means the adjustment(s) (mathematical correction(s)) of measurement data 

obtained with a test voltage that is non-sinusoidal, to a value(s) that would have been obtained 

with a sinusoidal voltage.

Welding Transformer means a transformer designed for use in arc welding equipment or 

resistance welding equipment.

3.3 EQUIPMENT CLASSES

DOE divides covered equipment into classes by: (a) the type of energy used; (b) the 

capacity; or (c) any performance-related features that affect consumer utility or efficiency. (42 

U.S.C. 6295(q)) Different energy efficiency standards may apply to different equipment classes. 

In the previous rulemaking on distribution transformers with a final rule published in October 

2007, DOE proposed 10 equipment classes and received general support on these equipment 

classes. The 10 equipment classes divided up the population of distribution transformers by:

(a) Type of transformer insulation - liquid-immersed or dry-type, 

(b) Number of phases - single or three,

(c) Voltage class - low or medium (for dry-type units only), and

(d) Basic impulse insulation level (for medium-voltage, dry-type units only).

On August 8, 2005, the President signed into law EPACT 2005, which contained a 

provision establishing energy conservation standards for two of DOE‘s equipment classes 

(ECs)—EC3, low-voltage, single-phase, dry-type and EC4, low-voltage, three-phase, dry-type. 

With standards thereby established for low-voltage, dry-type distribution transformers, DOE no 

longer considered these two equipment classes for standards during the previous rulemaking. 

Since the current rulemaking is considering new standards for distribution transformers, DOE 

has decided to also revisit low-voltage, dry-type distribution transformers to determine if higher 

efficiency standards are justified. Table 3.3.1 presents the ten equipment classes within the 

scope of this rulemaking analysis, and provides the kVA range associated with each.
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Table 3.3.1 Distribution Transformer Equipment Classes

EC* # Insulation Voltage Phase BIL Rating kVA Range

EC1 Liquid-Immersed Medium Single - 10-833 kVA

EC2 Liquid-Immersed Medium Three - 15-2500 kVA

EC3 Dry-Type Low Single - 15-333 kVA

EC4 Dry-Type Low Three - 15-1000 kVA

EC5 Dry-Type Medium Single 20-45kV BIL 15-833 kVA

EC6 Dry-Type Medium Three 20-45kV BIL 15-2500 kVA

EC7 Dry-Type Medium Single 46-95kV BIL 15-833 kVA

EC8 Dry-Type Medium Three 46-95kV BIL 15-2500 kVA

EC9 Dry-Type Medium Single ≥ 96kV BIL 75-833 kVA

EC10 Dry-Type Medium Three ≥ 96kV BIL 225-2500 kVA

* EC = Equipment Class

Basic impulse insulation level (BIL) refers to the level of insulation wound into a 

transformer, dictating its design voltage. Generally, higher BIL ratings have lower transformer 

operating efficiencies because the additional insulation and necessary clearances increase the 

distance between the core steel and the windings, contributing to higher losses. In addition, as 

the overall size of the windings increases due to additional insulation surrounding each wire, the 

core window through which the windings pass must increase, creating a larger core and 

increasing losses in the core. Recognizing this important aspect of transformer design, and after 

consultation with industry experts, DOE determined that differentiation of the energy efficiency 

standards by BIL level would be necessary for medium-voltage (MV), dry-type units, since these 

transformers experience significant variability in efficiency due to their BIL ratings. This 

decision is consistent with NEMA‘s TP 1-2002 (described in section 3.7.1).

3.4 NATIONAL SHIPMENT ESTIMATE

To prepare an estimate of the national impact of energy conservation standards for 

distribution transformers, DOE needed to estimate annual transformer shipments. For accuracy 

in this calculation, unit shipments were required by equipment class and kVA rating within each 

equipment class. Detailed shipment information like this is highly sensitive to manufacturers, 

many of whom indicated to DOE they would not be able to disclose their shipments. DOE

researched public sources of transformer shipment information, such as the data compiled by the 

U.S. Census Bureau, but found that the data are aggregated, with many kVA ratings bundled in 

one value. Thus, DOE determined that it would not be possible to create an accurate estimate of 

transformers by kVA rating using U.S. Census Bureau data.

Instead, to develop its shipments estimate, DOE contracted a company with considerable 

knowledge of the U.S. transformer industry. This contractor has collectively more than 80 years 

of experience working in both the liquid-immersed and dry-type transformer industry in the U.S. 

DOE tasked the contractor with using its knowledge of the market, plus a limited number of 

consultative calls, to compile a national estimate of shipments for liquid-immersed and dry-type 

transformers.

Figure 3.4.1 through Figure 3.4.2 present the total aggregate shipment estimates for 

liquid-immersed units, while Figure 3.4.3 through Figure 3.4.4 present low-voltage and medium-
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voltage dry-type units. These pie charts show the estimated shipments for 2009 in both number 

of transformers and cumulative megavolt-ampere (MVA) of transformer capacity. The 

superclasses are subdivided into two principal groups—single-phase and three-phase. To 

simplify the illustrations, the single-phase and three-phase medium-voltage, dry-type units are 

shown each as aggregations of the three equipment classes presented in Table 3.3.1, where they 

are broken down by BIL rating. This was necessary as the separate market shares of mediumvoltage, dry-type by BIL rating are small compared to the low-voltage, dry-type units. A 

detailed breakdown of the shipment estimates by equipment class and kVA rating appears in the 

shipments analysis (Chapter 9 of this TSD).

Liquid 

1-Phase

93%

Liquid 

3-Phase

7%

Figure 3.4.1 Liquid-Immersed Unit Shipments, 2009

Liquid 

1-Phase

41%

Liquid 

3-Phase

59%

Figure 3.4.2 Liquid-Immersed Megavolt-Ampere Capacity Shipments, 2009
3-9

Dry-LV 

1-Phase

8%

Dry-MV 

1-Phase

0.6%

Dry-LV 

3-Phase

90%

Dry-MV 

3-Phase

1.7%

Figure 3.4.3 Dry-Type Unit Shipments, 2009

Dry-LV 1-

Phase

3%

Dry-MV 1-

Phase

0.2%

Dry-LV 3-

Phase

70%

Dry-MV 3-

Phase

27%

Figure 3.4.4 Dry-Type Megavolt-Ampere Capacity Shipments, 2009

Table 3.4.1 presents the actual shipment estimates by equipment class and the estimated 

value of these shipments, approximately $2.09 billion in 2009.
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Table 3.4.1 National Distribution Transformer Shipment Estimates for 2009

Distribution Transformer Equipment Class Units 

Shipped

MVA Capacity 

Shipped

Shipment Value 

(2009 US$million)

Liquid-immersed, medium-voltage, single-phase 683,726 21,994 714.8

Liquid-immersed, medium-voltage, three-phase 49,739 32,266 786.0

Dry-type, low-voltage, single-phase 17,740 647 22.0

Dry-type, low-voltage, three-phase 206,929 15,778 394.4

Dry-type, medium-voltage, single-phase, 20-45 kV BIL 709 23 0.7

Dry-type, medium-voltage, three-phase, 20-45 kV BIL 522 257 6.2

Dry-type, medium-voltage, single-phase, 46-95 kV BIL 546 23 0.8

Dry-type, medium-voltage, three-phase, 46-95 kV BIL 2,074 3,655 98.7

Dry-type, medium-voltage, single-phase, ≥ 96 kV BIL 202 9 0.3

Dry-type, medium-voltage, three-phase, ≥ 96 kV BIL 1,286 2,206 66.2

Total 963,473 76,858 2,090.1

The liquid-immersed transformer market accounted for 76 percent of the distribution 

transformers sold in the United States in 2009 (on a unit basis). These transformers accounted 

for 71 percent of the distribution transformer capacity measured in MVA, and 72 percent of the 

dollar value of the 2009 shipments. On a unit basis, more than 93 percent of the liquid-immersed 

shipments are single-phase. However, these single-phase units tend to have lower kVA ratings 

than the three-phase units, which are more than 59 percent of the total MVA capacity shipped of 

liquid-immersed distribution transformers in 2009.

In the dry-type market, low-voltage, three-phase distribution transformers dominate, 

accounting for 90 percent of units and 70 percent of MVA shipped. Medium-voltage, threephase units accounted for only 1.7 percent of the units shipped, but were 27 percent of MVA 

shipments in 2009. The low-voltage, single-phase units were about 8 percent of the dry-type 

units shipped; however, because their kVA ratings tend to be small, they only accounted for 

about 3 percent of all dry-type MVA shipments in 2009. Medium-voltage, single-phase units 

occupy a small part of the market, representing 0.6 percent of the dry-type units shipped and 0.2 

percent of dry-type MVA shipped.

In preparing its estimates of the distribution transformer market, DOE‘s contractor 

identified several key insights to place the 2009 shipment estimates into perspective.

1. Fundamentally, 2009 was characterized by slow housing starts, minimal industrial and 

commercial activity, and general retrenchment in the country.

2. Distribution transformer shipments reflected the slow economic activity in all segments.

3. The data for 2009 looked relatively weak compared to DOE‘s previous distribution 

transformer market size estimate from 2001.

a. Liquid-immersed, single-phase distribution transformer unit shipments were down 

30 percent but up substantially in price, reflecting higher material costs.
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b. Liquid-immersed, three-phase distribution transformer unit shipments were down 

37.5 percent but up in both price and average size, with significant increases in 

data center applications.

c. Low-voltage, dry-type distribution transformer unit shipments were down 33 

percent as a reflection of the units largely being short lead-time, off-the-shelf 

items that are easily defrayed in tight business conditions for better times.

d. Medium-voltage, dry-type distribution transformer unit shipments were actually 

up in 2009 compared to past years. This is attributable to the fact that these are 

long lead-time items, and many were ordered during the high economic growth 

period in 2008. Additionally, some purchases were likely expedited in 2009 to 

beat the DOE energy conservation standards that took effect in the beginning of 

2010.

3.5 MANUFACTURERS OF DISTRIBUTION TRANSFORMERS

In total, there are more than 60 manufacturers and importers of distribution transformers 

operating in the U.S. today.1 Of these, 16 major companies represent about 80 percent of both 

the liquid-immersed and dry-type markets.

From a manufacturing point of view, the six largest companies operating in the liquidimmersed distribution transformer market are (in alphabetical order): ABB Power T&D 

Company, Cooper Power Systems, Electrical Repair and Maintenance Company (ERMCO), 

Howard Industries, Power Partners, and Prolec-General Electric. Together, these six companies 

represent more than 80 percent of the sales revenue of liquid-immersed distribution transformers 

in the United States. 

For low-voltage dry-type distribution transformer manufacturers, the seven largest 

companies operating in the United States include (in alphabetical order): Acme Electric 

Corporation, Eaton Electrical, Inc., Federal Pacific Transformer Company, General Electric, 

Hammond Power Solutions Inc., Olsun Electrics Corporation, and Square D Company. 

Together, these companies represent more than 80 percent of the sales revenue of low-voltage 

dry-type distribution transformers in the U.S.

For medium-voltage dry-type distribution transformers manufacturers, the seven largest 

companies operating in the U.S. include (in alphabetical order): ABB Power T&D Company, 

Federal Pacific Transformer Company, Hammond Power Solutions Inc., Jinpan International 

Ltd., Magnetic Technologies Corp., MGM Transformer Company, and Olsun Electrics 

 

1 This estimate is based on a review of the Thomas Business Registry (June 2005), United Laboratories (UL) 

Listings (June 2005), Canadian Standards Association (CSA) Listings (June 2005), Factory Mutual (FM) Listings 

(June 2005), the ORNL contact database from the Determination Analysis, and participants in DOE‘s Distribution 

Transformers Framework Workshop meeting held November 1, 2000 in Washington, DC.
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Corporation. Together, these companies represent more than 80 percent of the sales revenue of 

medium-voltage dry-type distribution transformers in the United States.

3.5.1 Potential Small Business Impacts

DOE is considering the possibility of small businesses being impacted by the 

promulgation of minimum efficiency standards for distribution transformers. DOE is aware that 

there are small distribution transformer manufacturers, defined by the Small Business 

Administration as having 750 employees or fewer, who would be impacted by a minimum 

efficiency standard. DOE will study the potential impacts to these small businesses in greater 

detail during the manufacturer impact analysis (MIA), which it will conduct as part of the notice 

of proposed rulemaking (NOPR) analysis.

3.5.2 Distribution and Sales Channels

A schematic of the distribution transformer market is shown in Figure 3.5.1.

i

 This 

illustration depicts the major market players and the level of interaction between them. The solid 

lines show more common distribution and sales channels and dashed lines less frequently used 

channels.

Figure 3.5.1 Market Delivery Channels for Distribution Transformers

The market delivery channel for electric utilities is generally direct, with the majority of 

these customers placing orders directly with manufacturers. It is estimated that electric utilities

purchase over 90 percent of their distribution transformers directly from manufacturers, 

specifying their desired features and performance.i There are also utilities, such as some rural 

cooperatives and municipalities, that make transformer purchases through distributors. When 

placing an order, the electric utility provides a specification, including the value it places on 
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future core and coil losses over the life of the transformer (see section 3.6 for a discussion of 

total owning cost). This market dynamic leads manufacturers to develop custom designs in their 

contract bids, reflecting the customer‘s performance requirements and the dynamic costs of 

material, equipment, and labor at a transformer manufacturer‘s facility. 

The delivery channel for commercial and industrial customers can be complex, working 

through intermediaries such as stocking distributors and electrical contractors. Electrical 

contractors typically purchase transformers using specifications written by themselves or by 

agents. Some larger industrial customers buy transformers directly from distributors or 

manufacturers based on specifications drafted by in-house experts. Any large-volume or 

custom-order purchases made (e.g., orders from the petrochemical or the pulp and paper 

industry) are typically made directly with transformer manufacturers. Similarly, original 

equipment manufacturers (OEMs) know the exact specifications they require for their finished 

equipment and typically work directly with manufacturers when placing an order.

Transformers with major damage are usually replaced rather than repaired. However, 

when a repair does take place (e.g., when failure occurs within the warranty period), it may be 

carried out by a repair shop or at the manufacturer‘s facility. Additionally, some utilities may 

choose to carry out their own repairs if this option is less expensive than disposal and 

replacement.

3.6 TOTAL OWNING COST EVALUATION

In 1995, there were an estimated 44 million liquid-immersed distribution transformers in 

service, of which approximately 90 percent were owned by electric utilities.i For dry-type 

transformers, there were approximately 12 million units in service, which were primarily used by 

commercial and industrial customers.i The liquid-immersed market, dominated by the electric 

utility sector, drove efficiency ratings higher over time, encouraging more efficient materials and 

manufacturing methods. A detailed discussion of these improvements and efficiency trends 

between the years 1950 and 1993 can be found in two Oak Ridge National Laboratory (ORNL)

reports.i,ii

Following the energy price shocks of the 1970s, utilities started using total owning cost 

(TOC) evaluation formulas (Equation 3.6.1), incorporating core and winding losses into their 

purchasing decisions. The TOC consists of the quoted transformer price and energy losses in the 

core and winding over the anticipated life of the unit.

Expressed as a formula,

Equation 3.6.1

TOC = (NL A) + (LL B) + Price

where:

TOC = total owning cost ($),

NL = no-load loss (Watts),
3-14

A = equivalent first-cost of no-load losses ($/Watt),

LL = load loss at the transformer‘s rated load (Watts),

B = equivalent first-cost of load losses ($/Watt), and 

Price = bid price (retail price)($).

The capitalized cost per watt of no-load and load losses, the A and B factors, vary from 

one electric utility to another. They are derived from several variables, including the avoided 

costs of system capacity, generation capacity, transmission and distribution capacity and energy, 

the levelized fixed charge rate, the peak responsibility factor, the transformer loss factor, and the 

equivalent annual peak load.iii For a detailed discussion on the development and use of the TOC 

formula, including examples, see the draft industry standard document, Institute of Electrical and 

Electronics Engineers, Inc. (IEEE) PC57.12.33.

Utilities that use A and B factors compare two or more proposals from manufacturers and 

select the one that offers them the lowest total owning cost (i.e., the lowest combination of first 

cost and operating cost over the life of the transformer). Before electric utility deregulation 

started in North America, 30 years was considered the standard operating life and the 

depreciation period of a liquid-immersed transformer. Deregulation has raised concerns about 

payback periods, since electric utilities are not sure if they will own the transformer for its entire 

life. This uncertainty has forced some electric utilities to reduce their A and B factors, equating 

to a decreased emphasis on losses and, therefore, a reduction in transformer efficiency ratings.

In 1996, ORNL estimated that ―more than 90 percent‖ of electric utilities used the TOC 

method of loss evaluation at the time of purchase, which drove the market toward increasingly 

efficient designs.

i

 More recently, however, the possibility of deregulation and the associated sale 

of distribution networks has meant that utilities purchasing transformers today may not own 

them in 5 or 10 years, and thus will not recover the higher initial cost of a more efficient design. 

These regulatory changes and the general uncertainty surrounding deregulation have driven some 

utilities to purchase designs with lower first costs and higher losses.

Similarly, DOE‘s final rule for distribution transformers that was published in October 

2007 has caused some utilities to reexamine their A and B factors. DOE is aware that some 

utilities have deemphasized the importance of A and B factors and placed more emphasis on 

lower first costs as a result of the minimum efficiency standards. However, through 

conversations with industry professionals and manufacturers, DOE believes that the majority of 

utilities still purchase distribution transformers based on a total owning cost approach. 

Furthermore, many utilities have critically examined their A and B factors in response to the 

2007 rulemaking, and have altered their A and B factors in response.

The IEEE draft standard PC57.12.33 has a chapter discussing transformer efficiency for 

commercial and industrial customersiii (i.e., typical users of dry-type transformers), but the 

market itself appears split between the medium-voltage and the low-voltage units. The mediumvoltage, dry-type transformer market functions similarly to the liquid-immersed market, in that 

manufacturers receive custom-build orders with specifications or design criteria from customers. 

Because these customers pay for (and are concerned about) the electricity lost in their own 

distribution systems, they are concerned about the performance of the transformers they order. 
3-15

The low-voltage, dry-type transformer market does not participate in the manufacturing process; 

instead these units are generally sold ―off-the-shelf‖ or on a catalog stock order basis. Most of 

the low-voltage, dry-type transformers installed inside buildings or plants are purchased by 

electrical contractors or building managers who are not responsible for paying future energy 

bills. Thus, the designs of these transformers are commonly driven toward the lowest first-cost, 

lower efficiency units. This trend was identified by ORNL.i

3.7 VOLUNTARY PROGRAMS

DOE reviewed several voluntary programs promoting efficient distribution transformers 

in the United States. When DOE‘s previous rulemaking for distribution transformers took effect 

in January of 2010, many voluntary programs ended. This is because the minimum efficiency 

requirements were greater than or equal to the efficiency level dictated by the voluntary program, 

or the program needed revising in light of the new standard levels.

In this section, DOE considers several voluntary programs that are still operating, and 

several programs that recently became inactive. These include the NEMA Standards Publication 

TP 1, Guide for Determining Energy Efficiency for Distribution Transformers, (NEMA TP 1) 

and NEMA Premium Standard, the Federal Energy Management Program‘s TP 1 purchase 

program, the U.S. Environmental Protection Agency‘s Energy Star Transformers program, and 

the Consortium for Energy Efficiency‘s Commercial and Industrial Transformers Initiative. 

DOE also reviewed several voluntary programs operating at a regional level that offer custom 

incentive programs for distribution transformers, such as the programs offered by National Grid 

and Seattle City Light.

3.7.1 National Electrical Manufacturers Association TP 1 Standard

The NEMA TP 1 standard established a voluntary efficiency standard for distribution 

transformers.iv It encompassed liquid-immersed distribution transformers, single- and threephase, as well as dry-type, low-voltage and medium-voltage, single- and three-phase units. The 

efficiency levels for liquid-immersed and medium-voltage dry-type distribution transformers 

were superseded, though, by DOE‘s final rule, published in October 2007. Additionally, 

Congress established NEMA TP 1 as the standard for low-voltage dry-type transformers 

(EPACT 2005, August 8, 2005). Therefore, the NEMA TP 1 standard levels are no longer 

voluntary, but required.

 NEMA established this national voluntary efficiency standard in 1996, and revised it in 

2002.v Manufacturers had to meet or exceed the minimum efficiency targets presented in Table 

3.7.1 and Table 3.7.2 at the appropriate loading points. At that time, NEMA TP 1 efficiency 

levels were adopted by States and other agencies that were interested in establishing a standard. 

More information about NEMA TP 1 can be obtained by contacting NEMA, tel: 703-841-3200, 

or by visiting http://www.nema.org/stds/tp1.cfm#download .
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Table 3.7.1 National Electrical Manufacturers Association TP 1 Efficiency Levels for 

Liquid-Immersed Distribution Transformers

Liquid-Immersed, Single-Phase Liquid-Immersed, Three-Phase

kVA Min Efficiency (%) kVA Min Efficiency (%)

10 98.3 15 98.0

15 98.5 30 98.3

25 98.7 45 98.5

37.5 98.8 75 98.7

50 98.9 112.5 98.8

75 99.0 150 98.9

100 99.0 225 99.0

167 99.1 300 99.0

250 99.2 500 99.1

333 99.2 750 99.2

500 99.3 1000 99.2

667 99.4 1500 99.3

833 99.4 2000 99.4

- - 2500 99.4

Notes: Temperature: load-loss 85 ̊ C, no-load loss 20 ̊ C

Efficiency levels at 50 percent of unit nameplate load

Table 3.7.2 National Electrical Manufacturers Association TP 1 Efficiency Levels for DryType Distribution Transformers

Dry-Type, Single-Phase Dry-Type, Three-Phase

kVA

Min Efficiency (%)

kVA

Min Efficiency (%)

LowVoltage

Medium-Voltage LowVoltageMedium-Voltage

≤60 kV BIL >60 kV BIL ≤60 kV BIL >60 kV BIL

15 97.7 97.8 97.6 15 97.0 97.2 96.8

25 98.0 98.1 97.9 30 97.5 97.6 97.3

37.5 98.2 98.3 98.1 45 97.7 97.8 97.6

50 98.3 98.4 98.2 75 98.0 98.1 97.9

75 98.5 98.5 98.4 112.5 98.2 98.3 98.1

100 98.6 98.6 98.5 150 98.3 98.4 98.2

167 98.7 98.8 98.7 225 98.5 98.5 98.4

250 98.8 98.9 98.8 300 98.6 98.6 98.5

333 98.9 99.0 98.9 500 98.7 98.8 98.7

500 - 99.1 99.0 750 98.8 98.9 98.8

667 - 99.2 99.0 1000 98.9 99.0 98.9

833 - 99.2 99.1 1500 - 99.1 99.0

- - - - 2000 - 99.2 99.0

- - - - 2500 - 99.2 99.1

Notes: Temperature: 75 ̊ C for both low- and medium-voltage

Low-voltage efficiency levels at 35 percent of unit nameplate load

Medium-voltage efficiency levels at 50 percent of unit nameplate load

3.7.2 National Electrical Manufacturers Association – NEMA Premium Program

The NEMA Premium program establishes a voluntary efficiency standard for lowvoltage, dry-type distribution transformers. It encompasses both single- and three-phase lowvoltage, dry-type units. For a low-voltage, dry-type distribution transformer to qualify as NEMA 
3-17

Premium, it must have 30 percent fewer losses than the NEMA TP 1 level. NEMA established 

this national voluntary efficiency program in July 2010. Manufacturers must meet or exceed the 

minimum efficiency targets presented in Table 3.7.3 at the appropriate loading points. More 

information about NEMA Premium can be obtained by contacting NEMA, tel: 703-841-3200, or 

by visiting http://www.nema.org/gov/energy/efficiency/premium/transformersProgram.cfm.

Table 3.7.3 NEMA Premium Efficiency Levels for Low-Voltage, Dry-Type Distribution 

Transformers

Single-Phase Three-Phase

kVA Min Efficiency (%) kVA Min Efficiency (%)

15 98.39 15 97.90

25 98.60 30 98.25

37.5 98.74 45 98.39

50 98.81 75 98.60

75 98.95 112.5 98.74

100 99.02 150 98.81

167 99.09 225 98.95

250 99.16 300 99.02

333 99.23 500 99.09

- - 750 99.16

- - 1000 99.23

Note: Efficiency levels at 35 percent of unit nameplate load.

3.7.3 Energy Star Transformers

The U.S. Environmental Protection Agency (U.S. EPA) and DOE managed a program 

called Energy Star Transformers to overcome market barriers preventing industrial/commercial 

customers and utilities from purchasing more energy-efficient, dry-type, low-voltage, single- and 

three-phase units. The minimum efficiency that a transformer had to meet or exceed to be 

classified as an Energy Star transformer was the same as NEMA‘s TP 1. The activities of this 

program included use of the Energy Star label, marketing assistance to manufacturers and 

distributors, and free software tools for end users (including a downloadable cost evaluation 

model and an energy-efficiency calculator). This program was sponsored and promoted by the 

U.S. EPA and DOE, with additional promotional support from the Consortium for Energy 

Efficiency (CEE).

The Energy Star Transformers program was suspended on May 1, 2007 because EPACT 

2005 established NEMA TP 1 as the standard for low-voltage dry-type transformers. For more 

information or questions about this program, please contact the U.S. EPA tel: 1-888-STAR-YES

or visit http://www.epa.gov/; or CEE, tel: 617-589-3949, or visit http://www.cee1.org/.

3.7.4 Consortium for Energy Efficiency

The CEE‘s Commercial and Industrial Transformers Initiative, launched in 1997, 

promoted the manufacture and sale of high-efficiency transformers. Historically, CEE and its 

members partnered with the Energy Star Transformers Program to promote high-efficiency 

performance guidelines for low-voltage distribution transformers specified by the NEMA TP 1 
3-18

standard. CEE members and other participating organizations include electric utilities, and 

statewide or regional efficiency organizations, which may be utility-based. CEE published an 

Initiative Description and Market Assessment, which identifies the transformer market barriers to 

efficiency for interested utilities and other organizations. In 2010 the CEE was considering 

updating its high-efficiency transformer specification because NEMA TP 1 was set as the 

Federal minimum efficiency level for low-voltage dry-type transformers. For more 

information, contact CEE at tel: 617-337-9274.

3.7.5 Federal Energy Management Program

DOE manages the Federal Energy Management Program (FEMP), which helps Federal 

buyers identify and purchase energy-efficient equipment, including distribution transformers. 

The FEMP standard for distribution transformers is based on the NEMA TP 1 standard, and 

includes all units listed in TP 1. While the liquid-immersed and medium-voltage dry-type 

recommendations (based on NEMA TP 1) are superseded by DOE‘s 2007 final rule, FEMP still

offers buyers support tools such as efficiency guidelines, cost-effectiveness examples, and a cost 

calculator. FEMP also offers training, on-site audits, demonstrations, and design assistance. For 

more information, interested stakeholders can contact FEMP at tel: 1-202-586-5772, or visit 

http://www1.eere.energy.gov/femp/.

3.7.6 National Grid

National Grid offers a custom measure incentive for energy efficient replacement 

distribution transformers. Each transformer purchase is evaluated independently based on first 

costs and energy savings (annually and during peak loading) compared to the existing 

transformer. If the replacement distribution transformer passes National Grid‘s custom criteria, 

up to 50 percent of the first costs can be reimbursed, capped at a 1.5 year payback and based on a 

dollar cost per unit of savings. For more information, contact National Grid at 1-781-907-1000

or efficiency@us.ngrid.com.

3.7.7 Seattle City Light

Seattle City Light manages the Energy Smart Services Custom Incentive Program.vi The 

program provides incentives for distribution transformers that exceed the NEMA TP-1 standards 

for low-voltage, dry-type distribution transformers. Incentives provided cover up to 70 percent 

of the cost for qualifying equipment, or $0.23 per kilowatt-hour saved. Usually incentives are 

applied to utility-owned equipment. For more information contact Seattle City Light at tel: 206-

684-3000, or visit www.seattle.gov/light/.

3.8 REGULATORY PROGRAMS

On August 8, 2005 the President signed into law EPACT 2005. This legislation 

established the energy conservation standard for low-voltage, dry-type distribution transformers 

at the industry voluntary program level of NEMA TP 1-2002. This Federally mandated standard 
3-19

is the national standard, preempting any State efficiency standards for this type of equipment

when it took effect on January 1, 2007. At the international level, DOE is aware of standards in 

both Canada and Mexico that may impact the companies servicing the North American market. 

Summaries of these regulatory programs are provided in this section.

3.8.1 U.S. National Energy Bill – Energy Policy Act of 2005

The U.S. Congress enacted legislation requiring that low-voltage, dry-type transformers 

manufactured on or after, or imported into the U.S. on or after January 1, 2007, meet the NEMA 

TP 1 minimum efficiency standards: 

LOW VOLTAGE DRY TYPE DISTRIBUTION TRANSFORMERS.—The efficiency of 

a low-voltage dry-type distribution transformer manufactured on or after January 1, 2007, 

shall be the Class I Efficiency Levels for distribution transformers specified in table 4–2 

of the  ̳Guide for Determining Energy Efficiency for Distribution Transformers‘ 

published by the National Electrical Manufacturers Association (NEMA TP–1–2002).

During DOE‘s previous rulemaking on distribution transformers, DOE adopted the 

NEMA TP 1-2002 standard level set by EPACT 2005. As such, DOE no longer considered lowvoltage, dry-type transformers in that analysis, and published a final rule in 2007 that contained 

new standards for only liquid-immersed and medium-voltage, dry-type units. At this point in 

time, DOE will revisit low-voltage, dry-type distribution transformers to see if higher standard 

levels are warranted.

3.8.2 Canadian Efficiency Standard

The Canadian Government regulates efficiency of dry-type transformers. The regulation 

mandates compliance with the efficiency values listed in Canadian Standards Association (CSA) 

standard C802.2-00 as of January 1, 2005 (Canada Gazette, April 10, 2003). Liquid-immersed 

distribution transformers are addressed by a voluntary program, which has been drafted to allow 

supervisory oversight by the Canadian Government. 

In June 1997, the Office of Energy Efficiency at Natural Resources Canada (NRCan) 

announced that it intended to develop regulated minimum performance standards for 

transformers. These proposed regulations would affect interprovincial trade and transformers 

imported into Canada. Consultative workshops followed this announcement, which included 

discussion around harmonizing with NEMA's TP 1 levels.

The CSA drafted and published CSA C802.2-Minimum Efficiency Values for Dry Type 

Transformers, in which efficiency is measured according to a per unit loading of 35 percent for 

low-voltage and 50 percent for medium-voltage. The efficiency levels are the same as NEMA 

TP 1 except the CSA added an additional significant digit (zero) in the hundredths place. For 

this standard, the reference winding temperature is 75 ̊C, as in NEMA's TP 1. A proposed 

amendment in June 2010 would result in increasing the standard levels for medium-voltage drytype to align with the current DOE standards.
3-20

As a result of the process of working with the CSA and a range of stakeholders, NRCan 

chose to separate the regulatory processes for liquid-immersed and dry-type transformers.

Liquid-Immersed Transformer Standards

The process of regulating minimum efficiency levels for liquid-immersed transformers 

was stopped after several years of development. The CSA harmonized the Canadian standard 

with NEMA‘s voluntary standards, selecting the range of regulated equipment, the efficiency 

levels, and the transformer test procedures based on NEMA TP 1 and TP 2. However, a market 

analysis revealed that the liquid-immersed transformer market in Canada is dominated by the 

nine provincially operated electric utilities, each of which had already incorporated energy 

efficiency into their transformer procurement practices. It was found that more than 95 percent 

of the liquid-immersed distribution transformers sold in Canada already met the NEMA TP-1 

efficiency levels.

Thus, the Canadian Government decided not to continue with the development of a 

regulation for liquid-immersed distribution transformers. Instead, the major Canadian utilities 

and manufacturers, through the Canadian Electricity Association (CEA), signed a voluntary 

agreement with NRCan. Under the terms of this agreement, the electric utilities agreed to adopt 

the minimum efficiency levels based on the CSA C802.1-00 standard when purchasing liquidfilled transformers, and to report the performance of virtually all liquid-immersed transformers 

installed in Canada to NRCan. NRCan will then determine if the efficiency of the market is 

degrading and, if so, take appropriate action.

Dry-Type Transformer Standards

NRCan pre-published an amendment to Canada‘s regulations that includes dry-type 

transformers on December 14, 2002. This amendment was published on April 23, 2003. This 

minimum energy performance standard for dry-type transformers became effective on January 1, 

2005. The regulations included a broad range of kVA ratings, more than are included in NEMA 

TP 1 or the Department of Energy‘s rulemaking on distribution transformers.

A consultation forum was organized in June 2005 by NRCan with the objective of 

analyzing some issues pertaining to the Canadian regulation. As a result of this focus, some 

changes were made to the regulation and modifications proposed to the CSA C802.2 Standard. 

Meetings were convened in July and September 2005 involving of NRCan, the CSA C802.2 

subcommittee, transformer manufacturers and other stakeholders to address these issues. At 

these meetings, some of the key changes to the dry-type transformer regulation agreed were:

Elimination of the tap range exemption, so there is no exemption in the Canadian 

regulations based on a tap range.

Addition of an exemption for furnace transformers. This exemption was necessary due to 

the removal of the tap range exemption. Furnace transformers were defined as "a threephase step-down transformer that is designed to be connected to an electric-arc furnace, 
3-21

and has a delta-wye switching arrangement plus high-voltage taps for changing the level 

of the low voltage supplied to the furnace."

Exclusion of drive transformers with two or more output windings or a low-voltage line 

current larger than 1500 amperes. This means that drive transformers designed with one 

output winding and a low-voltage line current less than or equal to 1500 Amperes are 

subject to regulation.

Clarification that transformers with resin-cast coils (not encapsulated cores) are covered 

by the regulation. The exemptions for sealed transformers and non-ventilated 

transformers do not apply to resin-cast coil transformers.

Elimination of the minimum low-voltage values, and addition of a maximum low-voltage 

line current of 4000 amperes. 

In addition, the following change was made to the CSA dry-type performance standard, 

and this change may be incorporated in the Energy Efficiency Regulations in a future 

amendment:

Adoption of two BIL groupings for medium-voltage dry-type transformers, consistent 

with the BIL groupings in NEMA TP 1-2002.

At the September 2005 meeting, an amendment to the definition of a dry-type 

transformer was also agreed as follows:

Dry-type transformer means a transformer, including a transformer that is incorporated 

into any other product, in which the core and coils are in a gaseous or dry compound 

insulating medium and that

(a) is either single-phase with a capacity from 15 to 833 kVA or three-phase with a 

capacity from 15 to 7500 kVA, and

(b) has a nominal frequency of 60 Hz, 

but does not include transformers having a rated low voltage line current larger than 

4000 amperes.

Additional amendments were made by NRCan in the following years, and most recently 

in June 2010, NRCan pre-published proposed amendments to regulations. (Canada Gazette Part 

I, June 12, 2010) The amendments proposed the following changes:

Increase existing standards for single- and three-phase dry-type transformers to 

harmonize with DOE standards.

Increase the scope of coverage to include transformers with a BIL up to 199 kVA. 

DOE‘s standards have an upper limit of 150 kVA.
3-22

Adopt exclusions for the following transformers: special impedance, grounding, furnace, 

resistance grounding, and on-load regulating.

Remove exclusions for ―transformers with tap ranges of 20%, uninterruptible power 

supply transformers, instrument transformers, machine tool (control) transformers, and 

encapsulated transformers.‖

―Scale efficiency values for three-phase units with a rating between 3,000 to 7,500 kVA,‖ 

which are not covered by the U.S. standards.

Adopt a ―more stringent table of normal impedance ranges (i.e., units with an impedance 

level that fell outside the normal impedance ranges would be excluded from the 

[minimum efficiency performance standards]).‖

Table 3.8.1 presents the current efficiency requirements for dry-type transformers. 

Table 3.8.2 presents the proposed revised efficiency requirements for medium-voltage dry-type 

transformers.
3-23

Table 3.8.1 Canadian Efficiency Regulations for Dry-Type Transformers

Single-Phase Three-Phase

kVA

Minimum 

Low 

Voltage 

(V)

1.2 kV Class 

Efficiency 

(%), at 35% 

Loading

BIL 20-150kV 

Efficiency 

(%), at 50% 

Loading

kVA

Minimum 

Low 

Voltage (V)

1.2 kV Class 

Efficiency 

(%), at 35% 

Loading

BIL 20-

150kV 

Efficiency 

(%), at 50% 

Loading

15 120/240 97.70 97.60 15 208Y/120 97.00 96.80

25 120/240 98.00 97.90 30 208Y/120 97.50 97.30

37.5 120/240 98.20 98.10 45 208Y/120 97.70 97.60

50 120/240 98.30 98.20 75 208Y/120 98.00 97.90

75 120/240 98.50 98.40 112.5 208Y/120 98.20 98.10

100 120/240 98.60 98.50 150 208Y/120 98.30 98.20

167 120/240 98.70 98.70 225 208Y/120 98.50 98.40

250 120/240 98.80 98.80 300 208Y/120 98.60 98.50

333 120/240 98.90 98.90 500 208Y/120 98.70 98.70

500 480 - 99.00 750 208Y/120 98.80 98.80

667 480 - 99.00 1000 208Y/120 98.90 98.90

833 480 - 99.10 1500 480Y/277 - 99.00

- - - - 2000 480Y/277 - 99.00

- - - - 2500 480Y/277 - 99.10

- - - - 3000 600Y/347 - 99.10

- - - - 3750 4160Y/2400 - 99.20

- - - - 5000 4160Y/2400 - 99.20

- - - - 7500 4160Y/2400 - 99.20

Table 3.8.2 Proposed Revised Canadian Efficiency Regulations for Medium-Voltage DryType Transformers

Single-Phase Efficiency (%) Three-Phase Efficiency (%)

kVA 20-45kV 

BIL

46-95kV

BIL

96-199kV 

BIL kVA 20-45kV BIL

46-95kV 

BIL

96-199kV 

BIL

15 98.10 97.86 97.6 15 97.50 97.18 96.80

25 98.33 98.12 97.9 30 97.90 97.63 97.30

37.5 98.49 98.30 98.10 45 98.10 97.86 97.60

50 98.60 98.42 98.20 75 98.33 98.12 97.90

75 98.73 98.57 98.53 112.5 98.49 98.30 98.10

100 98.82 98.67 98.63 150 98.60 98.42 98.20

167 98.96 98.83 98.80 225 98.73 98.57 98.53

250 99.07 98.95 98.91 300 98.82 98.67 98.63

333 99.14 99.03 98.99 500 98.96 98.83 98.80

500 99.22 99.12 99.09 750 99.07 98.95 98.91

667 99.27 99.18 99.15 1,000 99.14 99.03 98.99

833 99.31 99.23 99.20 1,500 99.22 99.12 99.09

- - - - 2,000 99.27 99.18 99.15

- - - - 2,500 99.31 99.23 99.20

- - - - 3,000 99.34 99.26 99.24

- - - - 3,750 99.38 99.30 99.28

- - - - 5,000 99.42 99.35 99.33

- - - - 7,500 99.48 99.41 99.39

Note: At 50 percent unit nameplate load.
3-24

3.8.3 Mexican Efficiency Standard

Mexico is one of the regional leaders in promoting and regulating energy efficiency. In 

recent years, other countries, such as Argentina, Ecuador, and Peru, have requested assistance 

from Mexico in the development and implementation of national efficiency programs.

Mexico began regulating distribution transformers more than three decades ago when it 

enacted NOM-J116 in 1977.vii However, in 1989, a presidential decree modified the Normas 

Oficiales Mexicanas (Official Mexican Standards) from mandatory to voluntary standards; 

NOM-J116 became NMX-J116, a Norma Mexicana (Mexican Standard). In 1992, the Ley 

Federal sobre Metrología y Normalización (Federal Law on Metering and Standards) reestablished the mandatory character of NOMs. In addition, this law empowered the Secretaría de 

Energía (the Mexican equivalent to the U.S. Department of Energy) to formulate and enact 

mandatory standards for electrical equipment. 

A new mandatory standard was enacted in 1994, NOM-001-SEMP-1994, to regulate the 

energy efficiency and safety of electrical equipment including distribution transformers. In 

1997, Mexico‘s government proposed a revision to NOM-001, and also proposed a new 

standard, NOM-002-SEDE-1997.viii NOM-002 was published in the Diario Oficial de la 

Federación (Official Registry) for public revision and enacted two years later in October 1999.

In 2010, NOM-002 was revised to update several aspects of the standard. The new 

version of the document, NOM-002-SEDE-2010, was approved by the Comité Consultivo 

Nacional de Normalización de Instalaciones Eléctricas (CCNNIE) on July 8, 2010. Once it is 

published in the Diario Oficial de la Federación, the new standard will take effect six months 

later.

This standard, which regulates liquid-immersed units, is the only compulsory efficiency 

regulation of distribution transformers in Mexico. Dry-type distribution transformers are used in 

Mexico, but neither government nor industry has moved to regulate them. Table 3.8.3 presents 

the characteristics of regulated distribution transformers in Mexico.
3-25

Table 3.8.3 Characteristics of Regulated Distribution Transformers in Mexico

Characteristic Specification

Power Supply Single-phase

Three-phase

Nominal Capacity 5 to 167 kVA (single-phase)

15 to 500 kVA (three-phase)

Insulation Class Up to 95 kV BIL (Up to 15 kV)

Up to 150 kV BIL (Up to 25 kV)

Up to 200 kV BIL (Up to 34.5 kV)

Installation Application Pad; Pole; Substation; Submersible

Status of Transformer Newly purchased

Repaired/Refurbished

NOM-002 provides two sets of tables with the specified minimum efficiency levels and 

the unit losses in watts, both tested at 100 percent of nameplate load. Since the requirements in 

NOM-002 are based on 100 percent loading, they are not directly comparable to DOE‘s 

efficiency standards. Table 3.8.4 and Table 3.8.5 show the efficiency requirements under NOM002, which were left unchanged in the 2010 revision of the standard. However, while the 

previous version of NOM-002 allowed a less stringent standard for small manufacturers with 

cumulative annual production under 9 kVA, the 2010 version has removed this provision. This 

is partially because the reduced standards for small manufacturers were not typically applied in 

practice, and many small manufacturers were complying at the same efficiency level as the large 

manufacturers.

While there is only one mandatory standard for distribution transformers, there are 

several voluntary Mexican standards. This description only deals with the mandatory standards.
3-26

Table 3.8.4 Minimum Efficiency Levels for Transformers in Mexico

Type

Capacity 

[kVA]

Insulation Class

Up to 95 kV BIL

(Up to 15 kV)

[%]

Up to 150 kV BIL

(Up to 25 kV )

[%]

Up to 200 kV BIL

(Up to 34.5 kV)

[%]

Liquid-Immersed, 

Single-Phase

5 97.90 97.80 97.70

10 98.25 98.15 98.05

15 98.40 98.3 98.2

25 98.55 98.45 98.35

37.5 98.65 98.55 98.45

50 98.75 98.65 98.55

75 98.90 98.80 98.70

100 98.95 98.85 98.75

167 99.00 98.90 98.80

Liquid-Immersed, 

Three-Phase

15 97.95 97.85 97.75

30 98.25 98.15 98.05

45 98.35 98.25 98.15

75 98.50 98.40 98.30

112.5 98.60 98.50 98.40

150 98.70 98.60 98.50

225 98.75 98.65 98.55

300 98.80 98.70 98.60

500 98.90 98.80 98.70

Note: These efficiency levels are applicable at 100 percent of nameplate load, and do not include losses from 

protective accessories.
3-27

Table 3.8.5 Maximum Allowed Losses for Transformers in Mexico

Type Capacity 

[kVA]

Insulation Class

Up to 95 kV BIL

(Up to 15 kV) 

[Watts]

Up to 150 kV BIL

(Up to 25 kV )

[Watts]

Up to 200 kV BIL

(Up to 34.5 kV)

[Watts]

Core

Losses

Total 

Losses

Core

Losses

Total 

Losses

Core

Losses

Total 

Losses

LiquidImmersed, 

SinglePhase

5 30 107 38 112 63 118

10 47 178 57 188 83 199

15 62 244 75 259 115 275

25 86 368 100 394 145 419

37.5 114 513 130 552 185 590

50 138 633 160 684 210 736

75 186 834 215 911 270 988

100 235 1061 265 1163 320 1266

167 365 1687 415 1857 425 2028

LiquidImmersed, 

Three-Phase

15 88 314 110 330 135 345

30 137 534 165 565 210 597

45 180 755 215 802 265 848

75 255 1142 305 1220 365 1297

112.5 350 1597 405 1713 450 1829

150 450 1976 500 2130 525 2284

225 750 2844 820 3080 900 3310

300 910 3644 1000 3951 1100 4260

500 1330 5561 1475 6073 1540 6586

Note: These losses are applicable at 100 percent of nameplate load, and do not include losses from protective 

accessories.

It is important to note that Mexican efficiency standards represent an absolute minimum 

efficiency for each unit that is sold. According to the standards, every transformer must be 

within the minimum requirement, whereas U.S. DOE requirements provide a tolerance that is 

applicable to the transformers depending on the number of units built based on the average of the 

losses. Therefore, manufacturers selling in Mexico must apply a design margin to account for 

the statistical variation on loss measurements. Typically, this margin is around 6 percent of the 

maximum total losses, which decreases the average losses of the manufacturer‘s units by 6 

percent compared to the efficiency requirement.

In practice, however, many distribution transformers sold in Mexico exceed the minimum 

efficiency requirement. Unlike the United States, utility services in Mexico are provided by a 

single, public utility called Comisión Federal de Electridad (CFE). Due to the high loss 

evaluation formula that CFE uses, many manufacturers produce transformers with losses that are 

20 percent or more below the minimum requirement.
3-28

3.9 TECHNOLOGY ASSESSMENT

A transformer is a device constructed with two primary components: a magnetically 

permeable core, and a conductor of a low-resistance material wound around that core. A 

distribution transformer's primary function is to change alternating current from one voltage 

(primary) to a different voltage (secondary). It accomplishes this through an alternating 

magnetic field or "flux" created by the primary winding in the core, which induces the desired 

voltage in the secondary winding. The change in voltage is determined by the "turns ratio," or 

relative number of times the primary and secondary windings are wound around the core. If 

there are twice as many secondary turns as primary turns, the transformer is a step-up 

transformer, with a secondary voltage that would be double the primary voltage. Conversely, if 

the primary has twice as many turns as the secondary, the transformer is called a step-down 

transformer, with the secondary voltage half as much as the primary voltage. Distribution 

transformers are always step-down transformers.

Transformer losses are generally small, in the vicinity of a few percent or less of the total 

power handled by the transformer. There are two main kinds of losses in transformers: no-load 

(core) losses and load (winding) losses. Higher transformer efficiencies are achieved by 

reducing the losses associated with these two assemblies: the core and the windings.

3.9.1 Distribution Transformer Types

In general, there are two primary types of distribution transformer: liquid-immersed and 

dry-type. Liquid-immersed transformers typically use oil as both a coolant (removing heat from 

the core and coil assembly) and a dielectric medium (preventing electrical arcing across the 

windings). Liquid-immersed transformers are typically used only outdoors because of concerns 

over oil spills or fire if the oil temperature reaches the flash-point level. In recent decades, new 

insulating liquid insulators (e.g., silicone fluid) have been developed which have a higher flashpoint temperature than mineral oil, and transformers with these liquids can be used for indoor 

applications. However, high initial costs for these low-flammable, liquid-immersed 

transformers, relative to the cost of dry-type units, prevents widespread market adoption.

Dry-type transformers are air-cooled, fire-resistant devices that do not use oil or other 

liquid insulating/cooling media. Because air is the basic medium used for insulating and cooling 

and it is inferior to oil in these functions, dry-type transformers are larger than liquid-immersed 

units for the same voltage and/or kVA capacity. As a result, when operating at the same flux and 

current densities, the core and coil assembly is larger and hence incurs higher losses. Due to the 

physics of their construction (including the ability of these units to transfer heat), dry-type units 

have higher losses than liquid-immersed units. However, dry-type transformers are an important 
3-29

part of the transformer market because they can offer safety, environmental, and application 

advantages.

3.9.2 Transformer Efficiency Levels

There are two main types of losses in transformers: no-load (core) losses and load 

(winding) losses. Core losses are virtually constant with loading, occurring continuously in the 

core material to keep the transformer energized and ready to provide power at the secondary 

terminals. Core losses are present even if the load on the transformer is zero. Winding losses 

occur in the primary and secondary windings around the core, and increase as the square of the 

load applied to the transformer. Winding losses result primarily from the electrical resistance of 

the winding material.

Figure 3.9.1 depicts the change in core and coil losses with transformer loading on a 75 

kVA dry-type transformer, built with copper windings and an 80 degree temperature rise. This 

illustration clearly shows the quadratic growth of the winding losses.

Figure 3.9.1 Transformer Losses Vary with Load (75 Kilovolt-Ampere Dry-Type)

The equation used to calculate the percent efficiency of a transformer at any loading point 

is given as follows (IEEE, C57.12.00):

Equation 3.9.1

where:

EEload = percent efficiency at a given per unit load,

Pload = per unit load,
3-30

kVA = kVA rating of transformer,

NL = no-load loss (Watts),

LL = load loss (Watts), and

T = temperature correction factor.

As Equation 3.9.1 shows, the efficiency of a transformer is not a static value, but rather 

will vary depending on the per unit load (Pload) applied to the transformer. Using the losses 

plotted in Figure 3.9.1, DOE used Equation 3.9.1 to calculate the efficiency of this 75 kVA drytype transformer at each loading point from 0 to 100 percent of nameplate load. The results are 

shown in Figure 3.9.2, which clearly indicates that the efficiency of a transformer is not constant, 

but rather varies with loading. The highest efficiency occurs at the loading point where core 

losses are equal to winding losses.

Figure 3.9.2 Transformer Efficiency Varies with Load

Consequently, any discussion of transformer efficiency must include an assumed loading 

point. The loading points used in DOE‘s analysis of distribution transformers are discussed in 

the energy use and end-use load characterization section of this TSD (Chapter 6).

3.9.3 Transformer Losses

This section discusses methods to reduce transformer losses that have been developed 

over the 125 years of technology evolution. The physical principles of distribution transformer

operation are discussed in detail in Chapter 2 of the Determination Analysis of Energy 

Conservation Standards for Distribution Transformers.

i

 This section summarizes some of the 

main technological methods for reducing transformer losses.ix
3-31

Core losses occur in the core material of the distribution transformer, and are present 

whenever the transformer is energized – i.e., available to provide or providing load. Core losses 

are chiefly made up of two components: hysteresis and eddy current losses. Hysteresis losses are 

caused by the magnetic lag or reluctance of the core molecules to reorient themselves with the 60 

hertz alternating magnetic field applied by the primary winding. Eddy current losses are actual 

currents induced in the core by the magnetic field, in the same manner that the field induces 

current in the secondary winding. However, these currents cannot leave the core, and simply 

circulate within each lamination, eventually becoming heat. Both hysteresis and eddy currents

create heat in the core material.

Measures to reduce core losses include utilizing thinner cold-rolled oriented laminated 

steel (e.g., M2 or M3) or amorphous material. However, these measures increase the 

manufacturing cost. In the case of amorphous material, due to a lower maximum core flux 

density, larges cores must be built, which increases the winding losses.

Winding losses occur in both the primary and secondary windings when a transformer is 

under load. These losses, the result of electrical resistance in both windings, vary with the 

square of the load applied to the transformer. As loading increases, winding losses increase and 

are typically much more significant than core losses at levels higher than 50 percent of the 

nameplate loading point.

Methods of reducing winding losses tend to cause an increase in no-load losses. One 

method is to increase the cross-sectional area of the conductor (decreasing current density in the 

winding material), but that means the core has to be made larger to accommodate the larger 

volume of the conductor, increasing core losses. Transposition of a multi-strand conductor can 

also help reduce winding losses.

Table 3.9.1 was prepared by ORNL.i This table summarizes the methods of making a 

transformer more efficient by reducing the number of watts lost in the core (no-load) and 

winding (load). However, as previously discussed, measures taken to reduce the losses in one 

area often increase the losses in another. This table presents those inter-relational issues, as well 

as the overall impacts on transformer manufacturing costs.
3-32

Table 3.9.1 Options and Impacts of Increasing Transformer Efficiency

No-load 

losses

Load

losses

Cost 

impact

To decrease no-load losses

Use lower-loss core materials Lower No change* Higher

Decrease flux density by:

(a) Increasing core cross-sectional area (CSA)

(b) Decreasing volts per turn

Lower

Lower

Higher

Higher

Higher

Higher

Decrease flux path length by decreasing conductor CSA Lower Higher Lower

Use 120 ̊ symmetry in three-phase cores** Lower No change TBD

To decrease load losses

Use lower-loss conductor material No change Lower Higher

Decrease current density by increasing conductor CSA Higher Lower Higher

Decrease current path length by:

(a) Decreasing core CSA

(b) Increasing volts per turn

Higher

Higher

Lower

Lower

Lower

Lower

* Amorphous-core materials would result in higher load losses because flux density drops, requiring a larger core 

volume.

** Sometimes referred to as a ―hexa-transformer‖ design.

The methods shown in Table 3.9.1 for making a transformer more efficient are discussed 

in the screening analysis (Chapter 4) and the engineering analysis (Chapter 5). DOE‘s analysis 

of the relationship between cost and efficiency for distribution transformers is presented in 

Chapter 5.
3-33

 

i ORNL, 1996. Determination Analysis of Energy Conservation Standards for Distribution Transformers, P.R. 

Barnes, J.W. Van Dyke, B.W. McConnell, S. Das, Oak Ridge National Laboratory, Oak Ridge, Tennessee. ORNL6847. See website: http://www.eere.energy.gov/buildings/appliance_standards/commercial/dist_transformers.html

ii ORNL, 1995. The Feasibility of Replacing or Upgrading Utility Distribution Transformers During Routine 

Maintenance, P.R. Barnes, J.W. Van Dyke, B.W. McConnell, S.M. Cohn, S.L. Purucker, Oak Ridge National 

Laboratory, Oak Ridge, Tennessee, ORNL-6804/R1. See website: 

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

iii IEEE, 2001. IEEE PC57.12.33/D8 Draft Guide for Distribution Transformer Loss Evaluation, prepared by the 

Working Group for the Guide for Distribution Transformer Loss Evaluation of the Distribution Sub-committee of 

the IEEE Transformers Committee, October 2001.

iv NEMA, 1996. NEMA Standards Publication No. TP 1: Guide for Determining Energy Efficiency for Distribution 

Transformers, National Electrical Manufacturers Association, Rosslyn, VA.

v NEMA, 2002. NEMA Standards Publication TP 1-2002: Guide for Determining Energy Efficiency for 

Distribution Transformers, National Electrical Manufacturers Association, Rosslyn, VA.

vi Seattle City Light, Energy Smart Services, <http://www.cityofseattle.net/light/conserve/business/cv5_fi.htm>, 

viewed July 2005.

vii Gomez, 2001. Jose Antonio Gomez, P.E., Asociacion de Normalizacion y Certificacion (ANCE, Association of 

Standards and Certification). Mexico City, Mexico. personal communication, June 17, 2001.; Lara, 2001. Ing. Rene 

Perez Lara, Dirección General de Gas LP y de Instalaciones Eléctricas, Secretaría de Energía. Mexico City, 

Mexico. Personal communication, May, 2001. (Gas and Electric Installations Division, Department of Energy).

viii Manifestación de Impacto Regulatorio, Proyecto de Norma Oficial Mexicana NOM-002-SEDE-1997. Secretaría 

de Energía, Mexico City, Mexico, 1997 (Regulatory Impact Analysis, Proposed Official Mexican Standard NOM002-SEDE-1997), Department of Energy, Mexico City, Mexico.

ix Energy Efficient Transformers, Barry W. Kennedy, McGraw-Hill Publishing, New York, NY. Control of 

Transformer Losses in Canada, D.A. Wiegand, IEEE Journal, 1994. Determination Analysis of Energy 

Conservation Standards for Distribution Transformers, P.R. Barnes, J.W. Van Dyke, B.W. McConnell, S. Das, Oak 

Ridge National Laboratory, Oak Ride, Tennessee. ORNL-6847. See website: 

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