Energy Conservation Standards for

Distribution Transformers

ANOPR Public Meeting

Life-Cycle Cost Analysis

Building Technologies Program

Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy

September 28, 2004

 EE-RM/STD-00-550 COMMENT 56.9

Energy Conservation Standards for 

Distribution Transformers 

ANOPR Public Meeting 

Life-Cycle Cost Analysis 

Building Technologies Program 

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

September 28, 2004 
ANOPR Analyses Flow Diagram

Market &

Tech nology F Markups for

Engineer'iii f ',\ Equipment

Analysis 17 Price

Determination

Energy use &

End-Use Load

;liaracte^ization

Life-Cycle

Cost and

Payl)ack

Perioca Analyses

National

Impact

Analysi€..

2

 EE-RM/STD-00-550 COMMENT 56.9

ANOPR Analyses Flow Diagram 

MarKet & 

l ___ _e_ch _lo_g_y __ -----,,~) ginee f1 ~ 

Screeningr 

An:sJl\lsls J/, 

Anal,ysi,s 

NOPR \'\ "? 

Final \\) .. EffectiV~) ,( Rule ,/ Date 

/ I I 

lI11arkuJ)s for \ 

Equipment . 

Price 

DeterliT'li'hatiofl (. 

"Emergy use & 

End-Use LCJ3d' 

I Life-C¥cle 

rC ~st and 

IPaylJack 

perio<"J al~ses 

._ 1 

Nat ional 

I'mpact 

Analysi~) 

\ 

'> 

2 
Purpose

Markups for Equipment Price Determination

• To characterize the channels for how distribution transformers are distributed from the

manufacturer to the customer.

• To determine prices paid by customers based on manufacturer prices of base case and

higher efficiency equipment.

Energy Use & End-Use Load Characterization

• To develop electrical energy use and peak electrical consumption characteristics for

distribution transformers.

• To provide these characteristics for selected equipment efficiency levels across a diverse

set of applications.

Life-Cycle Cost and Payback Period Analyses

• To develop the customer life-cycle cost savings and payback periods of higher efficiency

equipment.

• To evaluate the economic effects of potential standards from the customer perspective.

3

 EE-RM/STD-00-550 COMMENT 56.9

Purpose 

Markups for Equipment Price Determination 

• To characterize the channels for how distribution transformers are distributed from the 

manufacturer to the customer. 

• To determine prices paid by customers based on manufacturer prices of base case and 

higher efficiency equipment. 

Energy Use & End-Use Load Characterization 

• To develop electrical energy use and peak electrical consumption characteristics for 

distribution transformers. 

• To provide these characteristics for selected equipment efficiency levels across a diverse 

set of applications. 

• Life-Cycle Cost and Payback Period Analyses 

• To develop the customer life-cycle cost savings and payback periods of higher efficiency 

equipment. 

• To evaluate the economic effects of potential standards from the customer perspective. 

3 
Issues for Public Comment

Modeling of Transformer Load Profiles (ANOPR Issue #6)

• Distribution Chain Markups (ANOPR issue #7)

• Discount Rate Selection and Use (ANOPR Issue #8)

• Baseline Determination Through Purchase Evaluation Formulae

(ANOPR Issue #9)

• Electricity Prices (ANOPR Issue #10)

Load Growth Over Time (ANOPR Issue #11)

4

 EE-RM/STD-00-550 COMMENT 56.9

Issues for Public Comment 

• Modeling of Transformer Load Profiles (ANOPR Issue #6) 

• Distribution Chain Markups (ANOPR issue #7) 

Discount Rate Selection and Use (ANOPR Issue #8) 

• Baseline Determination Through Purchase Evaluation Formulae 

(ANOPR Issue #9) 

• Electricity Prices (ANOPR Issue #10) 

• Load Growth Over Time (ANOPR Issue #11) 

4 
l ^-;J!" - 2 a r

Transformer Design

and Cost from

Engineering Analysis

Process Flowchart

Calculate Markup and

Installation Cost

Select Transformer Design

Electricity Costs

and Prices

Transformer

Loading

i

Calculate Cost of Losses

Discount Calculate Present Value of

Rate Future Costs of Losses

1

Results: LCC

Savings and Payback 5

 EE-RM/STD-00-550 COMMENT 56.9

Transformer Design 

and Cost from' 

Engineering Analysis 

Process Flowchart 

Calculate Markup and 

Installatron Cost 

~ 

Electricity Costs 

and Prices 

Sele.ct Transfo',rmer Design 

~ Cafculate Cost of !osses 

Transformer 

Loading 

D'iscou.nt 

Rate 

~ 

Calcul'ate Present Value of 

.. Futu re Costs of Losses 

~ Results: Lee 

Savings and Payback 5 
600

4

500

4

100-I

Compliant

A

A

^L• 5aa•_aP• ^^4 ..^a AIA

^• •° ,.dg, t1, Sr1.Y•; ^'.,.y=• .•* •! • • •i • '

0 50 100 150 200 250

No-Load Losses (Watts)

. Available Designs A Selected Designs, Base G) Selected Designs, Standard Standard Level

300

6

 EE-RM/STD-00-550 COMMENT 56.9

600 ~------------------------------ ----------------------------------------~ 

500 

u;-400 

::: 

~ -III 

~ 300 

III 

o 

..J 

'C 

ca 

.3 200 

100 

o 

• 

'\ 

Compliant 

o 50 

• Available Designs 

.' t",.. ", . " •• '. ~ ... ~~ .. ... • e ,. • ,. • 

. . 

. " 

100 150 

No-Load Losses (Watts) 

.. .... . . . ~ 

" 

200 

Non-C0l11pHant 

A - - - - _ .. . . _ - -

.. 

250 

.. Selected Designs, Base (Q) Selected Designs, Standard _ Standard Level 

300 

6 
Ili,_ vlu

^`WU_

Baseline Determination Through Purchase Evaluation Formulae

(ANOPR Issue #9)

Common industry descriptors, A and B, capture current market purchase

decision criteria.

• A = equivalent first cost of no-load (core) losses ($/watt)

• B = equivalent first cost of load (winding) losses ($/watt)

Distributions of A and B represent variability (fixed over analysis period).

Different evaluation percentages applied to liquid-immersed and dry-type.

The Department seeks stakeholder comments on the purchase

decision model.

7

 EE-RM/STD-00-550 COMMENT 56.9

Baseline Determination Through Purchase Evaluation Formulae 

(ANOPR Issue #9) 

Common industry descriptors, A and B, capture current market purchase 

decision criteria. 

• A = equivalent first cost of no-load (core) losses ($/watt) 

• B = equivalent first cost of load (winding) losses ($/watt) 

Distributions of A and B represent variability (fixed over analysis period). 

Different evaluation percentages applied to liquid-immersed and dry-type. 

The Department seeks stakeholder comments on the purchase 

decision model. 

7 
Distribution Channels

Liquid-immersed

Manufacturer

Customer

Dry-type

Manufacturer

Customer

s

 EE-RM/STD-00-550 COMMENT 56.9

Distribution Channels 

Liquid-immersed Dry-type 

Manufacturer Manufacturer 

Distributor 

Contractor 

Customer Customer 

8 
Markui* for Pnt ferminatio

Markup and Installation Cost Examples

Design Line #1: 50 kVA Liquid-immersed, Single-phase

Manufacturer's selling price

Shipping

Sales tax

Cost of installation

Installed price

Design Line #7: 75 kVA Dry-type, Three-phase, Low-voltage

$1,275

$77

$151

$1,441

$2,944

Manufacturer's selling price $963

Distributor markup $337

Shipping $109

Contractor markup $141

Sales tax $146

Cost of installation $1,160

Installed price $2,855 9

 EE-RM/STD-00-550 COMMENT 56.9

. .. 

Markup and Installation Cost Examples 

Design Line #1: 50 kVA Liquid-immersed, Single-phase 

Manufacturer's selling price 

Shipping 

Sales tax 

Cost of installation 

Installed price 

$1,275 

$77 

$151 

$1,441 

$2,944 

Design Line #7: 75 kVA Dry-type, Three-phase, Low-voltage 

Manufacturer's selling price 

Distributor markup 

Shipping 

Contractor markup 

Sales tax 

Cost of installation 

Installed price 

$963 

$337 

$109 

$141 

. $146 

$1,160 

$2,855 9 
Distribution Chain Markups

(ANOPR Issue # 7)

Average markup factor for 50 kVA liquid-immersed transformer from

manufacturer selling price to installed price is 2.1.

Average markup factor for 75 kVA dry-type transformer from manufacturer

selling price to installed price is 2.5.

Issues

The Department seeks stakeholder comments on factors, methods, and

data used to determine distribution chain markups.

10

 EE-RM/STD-00-550 COMMENT 56.9

Distribution Chain Markups 

(ANOPR Issue # 7) 

Average markup factor for 50 kVA liquid-immersed transformer from 

manufacturer selling price to installed price is 2.1. 

Average markup factor for 75 kVA dry-type transformer from manufacturer 

selling price to installed price is 2.5. 

The Department seeks stakeholder comments on factors, methods, and 

data used to determine distribution chain markups. 

10 
?4C:AF1--, rft^t I F.V1.3

Electricity Costs

Liquid-immersed transformers

• Hourly marginal electricity costs

• Both capacity and energy components

• FERC and electricity market data

Dry-type transformers

• Monthly electricity bills

• Both demand and energy charges

• Tariff data from about 100 utilities

11

 EE-RM/STD-00-550 COMMENT 56.9

Electricity Costs 

.1 Liquid-immersed transformers 

• Hourly marginal electricity costs 

• Both capacity and energy components 

• FERC and electricity market data 

Dry-type transformers 

• Monthly electricity bills 

• Both demand and energy charges 

• Tariff data from about 100 utilities 

1 1 
Electricity Prices

(ANOPR Issue #10)

issues

For liquid-immersed analysis, weighted national average wholesale marginal cost

3.8 cents no-load loss , 4.5 cents load loss

For dry-type analysis , weighted national average commercial marginal rate

including demand charges

6.4 cents no-load loss, 7.4 cents load loss

The Department seeks stakeholder feedback on the two methods used

for this rulemaking to determine the cost of electricity.

12

 EE-RM/STD-00-550 COMMENT 56.9

Electricity Prices 

(ANOPR Issue #10) 

For liquid-immersed analysis, weighted national average wholesale marginal cost 

• 3.8 cents no-I,oad I,oss ~ 4.5 cents load loss 

For dry-type analysis, weighted national average commercial marginal rate, 

including demand charges 

• 6.4 ~ents no-I'oad lossl 7.4 cents load loss 

The Department seeks stakeholder feedback on the two m,ethods used 

for this rulemaking to determine the cost of electricity. 

12 
Transformer Loading

Average transformer loading

• < 100 kVA liquid-immersed - 30% RMS

• > 100 kVA liquid-immersed - 50% RMS

• Dry-type low- and medium-voltage - 35% RMS

References

• Technical Support Documents: technical details

• IEEE Transformer Loss Evaluation Guide: background

13

 EE-RM/STD-00-550 COMMENT 56.9

Transformer Loading 

• Average transformer loading 

• < 100 kVA liquid-immersed - 30% RMS 

• > 100 kVA liquid-immersed - 50% RMS 

• Dry-type low- and medium-voltage - 35% RMS 

• References 

• Technical Support Documents: technical details 

• IEEE Transformer Loss Evaluation Guide: background 

13 
ue.sModeling of Transformer Load Profiles

(ANOPR Issue #6)

For liquid-immersed, initial average loading ranges from 30% for 25 kVA to

nearly 60% for 1500 kVA.

For dry-type, initial average loading ranges from 32% for 25 kVA to 37% for

2000 kVA.

Initial peak loading assumptions directly impact load model results.

The Department seeks stakeholder feedback on the loading model

used in the ANOPR analysis, especially initial peak loading

assumptions.

14

 EE-RM/STD-00-550 COMMENT 56.9

Modeling of Transformer Load Profiles 

(ANOPR Issue #6) 

For liquid-immersed, initial average loading ranges from 30% for 25 kVA to 

nearly 60% for 1500 kVA. 

For dry-type, initial average loading ranges from 32% for 25 kVA to 37% for 

2000 kVA. 

Initial peak loading assumptions directly impact load model results. 

The Department seeks stakeholder feedback on the loading model 

use"d in the ANOPR analysis, es·peciaUy initial peak loading 

assumptions. 

14 
Load Growth Over Time

(ANOPR Issue #11)

One percent load growth used as default for liquid-immersed, zero percent load

growth for dry-type.

Load Growth

50%

40%

30%

20%

10%

0%

2005 2010 2015 2020 2025 2030 2035 2040

Year

Zero percent and two percent used for sensitivity for liquid-immersed.

The Department seeks stakeholder comments on these

assumptions.

15

 EE-RM/STD-00-550 COMMENT 56.9

~ \,~ • .so En~gy Etli&lefl~ and Aenewable Energy I "(":-~'.~ ssues ~~,. . ~. J 

Load Growth Over Time 

(ANOPR Issue #11) 

One percent load growth used as default for liquid-immersed, zero percent load 

growth for dry-type. ,----- - --- ---------------.- , 

Load Growth 

~ 50% i 

... 

0 40% _.J C) 30% ~ 

Q) 

> ;: 20% 

..!!! 

:::::I 10% 

E 

:::::I 0% 

0 2005 2010 2015 2020 2025 2030 2035 2040 

Year 

Zero percent and two percent used for sensitivity for liquid-immersed. 

The Department seeks stakeholder comments on these 

assumptions. 

15 

• 
'11 ^ l a•;- s } 1' r , t ^^ ^ ^ p

^: air i-•tr . is. . ^ . i , ^

f

^- .-t. -:n.N •:.*.1= _'^aiSs¢'ski-E!=•I^^el

=

Discount Rates

Relative (time) value of money

• Now versus later

• Determined by the interest rate for borrowed money and the rate of

return on equity

n Interest rates are borrower-dependent

n DOE analysis determines discount rate by owner type

n Analysis, and consequently the discount rate, are in real terms

16

 EE-RM/STD-00-550 COMMENT 56.9

Discount Rates 

• Relative (time) value of money 

• Now versus later 

• Determined by the interest rate for borrowed money and the rate of 

return on equity 

• Interest rates are borrower-dependent 

• DOE analysis determines discount rate by owner type 

Analysis, and consequently the discount rate, are in real terms 

16 
Discount Rate Selection and Use

(ANOPR Issue # 8)

Average Discount Rate by Ownership Category

• 4.35% Property Owner

• 7.55% Industrial Companies

• 7.46% Commercial Companies

• 4.16% Investor Owned Utilities

• 4.31% Publicly Owned Utilities

• 3.33% Government

The Department invites comments on these discount rates

17

 EE-RM/STD-00-550 COMMENT 56.9

Discount Rate Selection and Use 

(ANOPR Issue # 8) 

Average Discount Rate by Ownership Category 

• 4.35%) 

• 7.55%) 

• 7.46% 

• 4.16% 

• 4.31 %) 

• 3.33% 

Property Owner 

Industrial Companies 

Commercial Companies 

Investor Owned Utilities 

Publicly Owned Utilities 

Government 

The Department invites comments on these discount rates 

17 
Example of LCC Results

DL 1: 5OkVA, Liquid-immersed, Single-phase

Mean = ($13)

Forecast: LCC Savings

10,000 Trials Frequency Chart

Z

I0

.046-

.030 -

.015-

.000

($1,000) ($500)

I

.1 I

$500

609

- 456.7

11

18

 EE-RM/STD-00-550 COMMENT 56.9

Example of LCC Results 

DL 1: 50kVA, Liquid-immersed, Single-phase 

10,000 Trials 

.

0611 

.046 1 

--

~ 

---.CI 

(w;:I 

.CI 

CI 

... 

c.. 

I 

1 

.

030 1 

-i 

.015 

Forecast: LCC Savings 

Frequency Chart 

.000 --'-----,...-----...... 

($1,000) ($500) $0 

,----- - - -, - 609 

I Mean = ($13) 1·-

1- 456.7 

. ." i- ..... 

. n 

[- 304.5 ~ 

_ n 

, = 

;- 152.2 ~ 

$500 $1,000 

18 
500

400

300

200

100

0

-100

-200

-300

-400

-500

Example of LCC Results

DL 1: 50 kVA, Liquid-immersed, Single-phase

2 3 4 5

Candidate Standard Level

Candidate Efficiency

Standard Rating Mean LCC

Savings Levels (percent)

1 98.90 $134

2 99.10 $158

3 99.30 (S13)

4 99.40 ($54)

5 99.58 ;a ^'f7 7,

Mean LCC w/o Standard $4,914

19

 EE-RM/STD-00-550 COMMENT 56.9

Example of LCC Results 

DL 1: 50 kVA, Liquid-immersed, Single-phase 

500 ~------~----------~ 

400 r---------

300 . -... -.-----.-.-.... -...... --...... .. --.. -............. --.... ---.--- --... ---._ ... ---.. ---.. -

Candidate Efficiency Mean LCC Standard Rating Savings Levels (percent) 

200 --- ----.- 1 98.90 $134 

2 99.10 $158 

3' 99.30 ($13) 

~ -1 00 ---------------------------------.. - -.. ---..... .... .. 4 99.40 ($64) 

o -200-- -.--------.------.... --- Cl -300 _ __________ ._. ______ 1 _______ _ 

5 99.58 ($359) 

I f , 

-400 --------. --- -.... -----

-500 ~------------------~ 

1 2 3 4 5 

Mean LCCw/o Standard $4,914 ] 

Candidate Standard Level 

19 
±Tai ' Jai: i ; p 4

Example of Payback Results

DL 9: 300 kVA, Dry-type, Three -phase, Medium-voltage

Forecast: payback

9,406 Trials Frequency Chart

.091-I

.068

.045

M

I- .023

. 000

0.3 6.4

Mean = 5.7 years

12.5 18.6

- 852

- 639

11

426

4,.a

213

-0 -4

24.6

20

 EE-RM/STD-00-550 COMMENT 56.9

Example of Payback Results 

DL 9: 300 kVA, Dry-type, Three-phase, Medium-voltage 

Forecast: payback 

9,406 Trials Frequency Chart 

.091 -r-------.---------~I;::============~ 

Mean = 5.7 years 

852 

.068 ........ . ................................................................................................................................................... 639 

.-~ " -tI 

n 

.CI .045 ........ . .............................................................................................................................................. - 426 .c ~ 

.CI 

o c: .023 ...... . 

. 000 --'--------IIu.u. ..................... 

0.3 6.4 

c 

n 

:I 

................................................................................................................... - 213 Q 

12.5 18.6 24.6 

20 
Example of Payback Results

DL 9: 300 kVA, Dry-type, Three-phase, Medium-voltage

35

30

5

0

1 2 3 4 5

Candidate Standard Leve

Candidate

Standard

Level

Efficiency

Rating

(percent)

Mean

Payback

(years)

1 98.90 4.8

2 99.19 6.1

3 99.30 5.7

4 99.40 8.9

5 99.58 13.1

21

 EE-RM/STD-00-550 COMMENT 56.9

Example of Payback Results 

DL 9: 300 kVA, Dry-type, Three-phase, Medium-voltage 

35 ~------------------~ 

30 

~ 

u 

(t1 15 

..0 

>, 

~ 10 

~~~ 

~~~~~~~~~~~ 

1 2 3 4 5 

Candidate Standard Level 

Candidate Efficiency Mean 

Standard Rating Payback 

Level (percent) (years) 

1 ,98.90 4.8 

2 99.10 6.1 

3 9g~30 5.7 

4 99.40 8.9 

5 99,58 13.1 

21 
Other Issues

The Department seeks input on whether income tax effects are

significant enough to warrant inclusion in the LCC analysis for the

NOPR.

The Department requests specific stakeholder comments on the power

factor of 1.0 assumption.

The Department seeks comments and recommendations from

stakeholders on any other aspects related to the Life-Cycle Cost

Analysis.

22

 EE-RM/STD-00-550 COMMENT 56.9

Other Issues 

The Department seeks input on whether income tax effects are 

significant enough to warrant inclusion in the Lee analysis for the 

NOPR. 

The Department requests spec,jfic stakeholder comments on the power 

factor of 1.0 assumption. 

The Department seeks co'mments and recomm,endati'ons from 

stakeholders on any other aspects related to the Life-Cycle Cost 

Analysis. 

22