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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 PROPOSED PRODUCT CLASSES ....................................... 3-4

3.4 NATIONAL SHIPMENT ESTIMATE ..................................... 3-5

3.5 MANUFACTURERS OF DISTRIBUTION TRANSFORMERS ................ 3-9

3.5.1 Potential Small Business Impacts ................................... 3-9

3.5.2 Distribution and Sales Channels .................................... 3-9

3.5.3 Import Duties on Core Steel ...................................... 3-11

3.6 TOTAL OWNING COST EVALUATION ................................. 3-11

3.7 VOLUNTARY PROGRAMS ........................................... 3-13

3.7.1 National Electrical Manufacturers Association TP 1 Standard ............ 3-13

3.7.2 ENERGY STAR® Transformers ..................................... 3-15

3.7.3 Federal Energy Management Program .............................. 3-16

3.7.4 New York State Energy Research and Development Authority ........... 3-16

3.7.5 National Grid .................................................. 3-16

3.7.6 Northeast Utilities .............................................. 3-17

3.7.7 Northeast Energy Efficiency Partnership ............................ 3-17

3.7.8 Sacramento Municipal Utility District ............................... 3-18

3.7.9 United Illuminating ............................................. 3-18

3.7.10 Wisconsin Public Power ......................................... 3-18

3.7.11 Xcel Energy ................................................... 3-18

3.8 REGULATORY PROGRAMS .......................................... 3-19

3.8.1 California Efficiency Standard .................................... 3-19

3.8.2 Massachusetts Efficiency Standard ................................. 3-19

3.8.3 Minnesota Procurement Efficiency Standard ......................... 3-19

3.8.4 New York Efficiency Standard .................................... 3-20

3.8.5 Oregon Efficiency Standard ....................................... 3-20

3.8.6 Vermont Efficiency Standard ..................................... 3-20

3.8.7 Wisconsin Efficiency Standard .................................... 3-21

3.8.8 U.S. Congress Draft Energy Bill ................................... 3-21

3.8.9 Canadian Efficiency Standard ..................................... 3-21

3.8.10 Mexican Efficiency Standard ...................................... 3-24

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

3.9.1 Distribution Transformer Types ................................... 3-29

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

3.9.3 Transformer Losses ............................................. 3-31

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LIST OF TABLES

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

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

Table 3.3.1 Proposed Distribution Transformer Product Classes ..................... 3-5

Table 3.4.1 National Distribution Transformer Shipment Estimates for 2001 ........... 3-7

Table 3.7.1 NEMA Efficiency Levels for Liquid-Immersed Distribution Transformers . . 3-14

Table 3.7.2 NEMA Efficiency Levels for Dry-Type Distribution Transformers ........ 3-15

Table 3.7.3 National Grid Design 2000 Rebate Amounts ......................... 3-17

Table 3.7.4 Northeast Utilities Energy Conscious Construction Rebate Amounts ...... 3-17

Table 3.8.1 Canadian Standards for Dry-Type Transformers ....................... 3-23

Table 3.8.2 Characteristics of Regulated Distribution Transformers in Mexico ........ 3-24

Table 3.8.3 Minimum Efficiency Levels for Transformers in Mexico ................ 3-25

Table 3.8.4 Maximum Allowed Losses for Transformers in Mexico ................. 3-26

Table 3.8.5 Transitional Standards for Small Manufacturers in Mexico .............. 3-27

Table 3.8.6 Transitional Maximum Losses for Small Manufacturers in Mexico ........ 3-28

Table 3.9.1 Options and Impacts of Increasing Transformer Efficiency .............. 3-33

LIST OF FIGURES

Figure 3.4.1 Liquid-Immersed Unit Shipments ................................... 3-6

Figure 3.4.2 Liquid-Immersed MVA Capacity Shipments .......................... 3-6

Figure 3.4.3 Dry-Type Unit Shipments ......................................... 3-6

Figure 3.4.4 Dry-Type MVA Capacity Shipments ................................ 3-6

Figure 3.5.1 Market Delivery Channels for Distribution Transformers ............... 3-10

Figure 3.9.1 Transformer Losses Vary with Load (75 kVA Dry-Type) ............... 3-30

Figure 3.9.2 Transformer Efficiency Varies with Load ............................ 3-31

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CHAPTER 3: MARKET AND TECHNOLOGY ASSESSMENT

3.1 INTRODUCTION

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

States. The Department 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 product characteristics which form the basis for

the engineering and the life-cycle-cost (LCC) analyses.

3.2 DISTRIBUTION TRANSFORMER DEFINITION

The Department’s proposed definition of a distribution transformer includes specific

definitions for each of the transformers excluded from the overall definition. This will clarify

which transformers are covered. For seven of the transformers excluded from the Department’s

definition of a distribution transformer, definitions were adapted from Institute of Electrical and

Electronics Engineers (IEEE) C57.12.80-2002: autotransformers, grounding transformers,

machine-tool (control) transformers, non-ventilated transformers, rectifier transformers,

regulating transformers, and sealed transformers. For K-factor transformers, the definition is

adapted from Underwriters Laboratories (UL) UL1561 and UL1562. The Department developed

the definitions for drive (isolation), the harmonic mitigating, special-impedance, testing, tap

ranges greater than 15 percent, uninterruptible power supply, and welding transformers based on

industry catalogues, practice, and nomenclature.

The Department proposes the following definition for a distribution transformer: 

Distribution transformer means a transformer with a primary voltage of equal to or less

than 35 kilovolts (kV), a secondary voltage equal to or less than 600 volts (V), a frequency of

55-65 Hertz (Hz), and a capacity of 10 kilovolt-amp (kVA) to 2500 kVA for liquid-immersed

units and 15 kVA to 2500 kVA for dry-type units, and does not include the following types of

transformers: (1) autotransformer; (2) drive (isolation) transformer; (3) grounding transformer;

(4) harmonic mitigating transformer; (5) K-factor transformer; (6) machine-tool (control)

transformer; (7) non-ventilated transformer; (8) rectifier transformer; (9) regulating transformer;

(10) sealed transformer; (11) special-impedance transformer; (12) testing transformer; (13)

transformer with tap range greater than 15 percent; (14) uninterruptible power supply

transformer; or (15) welding transformer.

Definitions for each of the 15 transformers not considered to be a distribution transformer

appear below:

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

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

common winding voltage.

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.

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) an autotransformer with a zig-zag winding

arrangement.

Harmonic mitigating transformer means a transformer designed to cancel or reduce the

harmonics drawn by computer equipment and other non-linear power electronic loads.

K-factor transformer means a transformer with a K-factor of 13 or greater that is

designed to tolerate the additional eddy-current losses resulting from harmonics drawn by

non-linear loads, usually when the ratio of the non-linear load to the linear load is greater than 50

percent.

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

other overcurrent protection device, and is generally used for the operation of a solenoid,

contactor, relay, portable tool, or localized lighting.

Non-ventilated transformer means a transformer constructed to prevent external air

circulation through the coils of the transformer while operating at zero gauge pressure.

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.

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 is shown in Tables 3.2.1 and 3.2.2.

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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

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

or current for the purpose of testing electrical equipment. This type of transformer is also

commonly known as an instrument transformer.

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Transformer with Tap Range greater than 15 percent means a transformer with a tap

range in the primary winding greater than the range accomplished with six 2.5 percent taps, three

above and three below rated primary voltage (e.g., six times 2.5 percent = 15 percent).

Uninterruptible Power Supply Transformer means a transformer that supplies power to

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.

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

resistance welding equipment.

3.3 PROPOSED PRODUCT CLASSES

For the standards rulemaking, the Department separated transformers into product classes

according to their capacity or other performance-related features or attributes, including those

that provide utility to the end-user or inherently affect efficiency. The Department sought

comments from stakeholders on product classes in the Framework Document Workshop held in

November 2000. Based on this feedback, the Department created ten proposed product classes,

shown in Table 3.3.1, applying the following four criteria:

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).

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Table 3.3.1 Proposed Distribution Transformer Product Classes

Number Insulation Voltage Phase BIL Rating kVA Range

1 Liquid-Immersed Medium Single - 10-833 kVA

2 Liquid-Immersed Medium Three - 15-2500 kVA

3 Dry-Type Low Single - 15-333 kVA

4 Dry-Type Low Three - 15-1000 kVA

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

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

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

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

9 Dry-Type Medium Single >96kV BIL 75-833 kVA

10 Dry-Type Medium Three >96kV BIL 225-2500 kVA

Basic impulse insulation levels (BIL) refer 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, making the magnetic fields travel further, and

thereby 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, the

Department determined that differentiation of the energy efficiency standards by BIL level

would be necessary for medium-voltage, dry-type units as 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 calculate reasonably accurate national energy savings estimates, the Department

required disaggregated shipment estimates by product class and kVA rating within each product

class. This information is considered highly sensitive by manufacturers, many of whom

indicated to the Department they were not willing to disclose that information. The Department

reviewed shipments data from the Census Bureau, but found that the data are aggregated at a

high level, grouping together dozens of kVA ratings in one value. Thus, the Department

determined that it would not be possible to create a meaningful and reasonably accurate estimate

of shipments at the product class, kVA rating using Census Bureau data.

Thus, the Department followed a different approach, soliciting a national shipment

estimate from an expert with considerable knowledge of the U.S. transformer industry. The

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3-6

Figure 3.4.1 Liquid-Immersed Unit

Shipments

Figure 3.4.3 Dry-Type Unit Shipments Figure 3.4.4 Dry-Type MVA 

Capacity Shipments

Figure 3.4.2 Liquid-Immersed MVA 

Capacity Shipments

Department selected a contractor with more than 80 years of experience working in both the

liquid-immersed and dry-type transformer industry in the U.S. The national shipment estimates

were generated by the contractor, using both knowledge of the market and a limited number of

consultative calls with other industry experts. Figures 3.4.1 through 3.4.4 present the total

aggregate shipment estimate for liquid-immersed and dry-type units. A detailed breakdown of

the shipment estimates by product class and kVA rating appears in section 9.3.1 of the shipments

analysis (Chapter 9 of this TSD).

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These pie charts show the estimated shipments for 2001 in both number of transformers

and cumulative MVA of transformer capacity. Figures 3.4.1 and 3.4.2 divide the liquidimmersed market into two principal product classes: medium-voltage, single-phase (MV-1P) and

medium-voltage, three-phase (MV-3P). Figures 3.4.3 and 3.4.4 divide the dry-type market into

low-voltage, single-phase (LV-1P); low-voltage, three-phase (LV-3P); medium-voltage, singlephase (MV-1P), and medium-voltage, three-phase (MV-3P). To simplify the illustrations, the

MV-1P and MV-3P dry-type units are shown each as aggregations of the three medium-voltage,

dry-type product classes presented in table 3.3.1, where they are broken down by BIL rating. 

This was necessary as the separate market shares of medium-voltage, dry-type by BIL rating are

small compared to the low-voltage, dry-type units.

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

value of these shipments, approximately $1.6 billion in 2001.

Table 3.4.1 National Distribution Transformer Shipment Estimates for 2001

Distribution Transformer Product Class Units 

Shipped

MVA Capacity

Shipped

Shipment Value 

(2001 US$million)

Liquid-immersed, medium-voltage, single-phase 977,388 36,633 698.8

Liquid-immersed, medium-voltage, three-phase 79,367 42,887 540.4

Dry-type, low-voltage, single-phase 23,324 983 17.8

Dry-type, low-voltage, three-phase 290,818 21,909 235.0

Dry-type, medium-voltage, single-phase, 20-45 kV

BIL

119 18 0.5

Dry-type, medium-voltage, three-phase, 20-45 kV BIL 650 776 13.5

Dry-type, medium-voltage, single-phase, 46-95 kV

BIL

121 22 0.6

Dry-type, medium-voltage, three-phase, 46-95 kV BIL 2,371 3,913 68.1

Dry-type, medium-voltage, single-phase, >96 kV BIL 20 4 0.1

Dry-type, medium-voltage, three-phase, >96 kV BIL 187 367 6.4

Total 1,374,366 107,512 1,581.2

The liquid-immersed transformer market accounted for 77 percent of the distribution

transformers sold in the United States in 2001 (on a unit basis). These transformers accounted

for 74 percent of the distribution transformer capacity measured in megavolt-amperes (MVA),

and 78 percent of the dollar value of the 2001 shipments. On a unit basis, more than 90 percent

of the liquid-immersed shipments are single-phase units. However, these single-phase units tend

to have lower kVA ratings than the three-phase units, which are more than half of the total MVA

capacity shipped of liquid-immersed distribution transformers in 2001.

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

accounting for 91 percent of units and 78 percent of MVA shipped. Medium-voltage, three-

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phase units accounted for only one percent of the units shipped, but were 18 percent of MVA

shipments in 2001. The low-voltage, single-phase units were about seven percent of the dry-type

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

about 3.5 percent of the cumulative dry-type MVA shipments in 2001. Medium-voltage, singlephase units occupy a small part of the market, representing less than one-half of one percent of

both units and MVA shipped. 

In preparing their estimates of the distribution transformer market, the Department’s

contractor identified differences between its 2001 shipment estimates and the Oak Ridge

National Laboratory (ORNL) Determination Analysis shipment estimates for 1995.1 The

differences and the understanding behind some of these differences are discussed below.

1. Compared to 1995, the 2001 shipment data suggest that more single-phase, liquidimmersed transformers were purchased as pad-mounts in 2001 than in 1995. Total

single-phase, liquid-immersed transformer shipments remained close to the traditional

one million units per year; however the average kVA size has risen in both pole- and padmounted transformers by approximately ten percent between 1995 and 2001.

2. The three-phase, liquid-immersed transformer market was considerably larger in 2001

than in 1995. This difference could be attributed to a more robust commercial and

industrial expansion in 2001 compared to 1995.

3. The single-phase, low-voltage, dry-type transformer shipment estimates are

approximately the same as the ORNL 1995 estimates, but the majority of ratings under

37.5 kVA are sand-resin type. Sand-resin type (also called epoxy-potted) transformers,

under the Department’s proposed definition, are not considered distribution transformers.

The ORNL 1995 shipment estimates probably included sand-resin type transformers, due

to the magnitude of the estimate.

4. There were more shipments of three-phase, low-voltage, dry-type transformers in 2001

compared with 1995, paralleling shipment growth in three-phase liquid-immersed

transformers.

5. The three-phase, medium-voltage, dry-type transformer market was smaller in volume

than ORNL determined in 1995, but with larger kVA ratings. These larger three-phase,

medium voltage, dry-type distribution transformers are most commonly used inside

commercial and industrial buildings when power requirements are sufficiently large that

direct feed from a liquid-immersed external transformer would be uneconomical. 

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a

 This estimate is based on a review of the Thomas Business Registry (August 2001), the ORNL contact database from

the Determination Analysis1 and participants in DOE’s Distribution Transformers Framework Workshop meeting held

November 1, 2000 in Washington, DC.

3-9

3.5 MANUFACTURERS OF DISTRIBUTION TRANSFORMERS

In total, there are more than 92 manufacturers and importers of distribution transformers

operating in the U.S. today.a Of these, sixteen 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

liquid-immersed distribution transformer market are (in alphabetical order): ABB Power T&D

Company, Cooper Power Systems, ERMCO, General Electric Power Systems, Howard

Industries, and Kuhlman Electric Corporation. Together, these six companies represent more

than 80 percent of the sales revenue of liquid-immersed distribution transformers in the U.S. 

For dry-type distribution transformer manufacturers, the ten largest companies operating

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

Corporation, Eaton Electrical, Inc., Federal Pacific Transformer Company, Hammond Power

Solutions Inc., Jefferson Electric Inc., MGM Transformer, Olsun Electrics Corporation,

Sola/Hevi-Duty, and Square D Company. Together, these companies represent more than 80

percent of the sales revenue of dry-type distribution transformers in the U.S.

3.5.1 Potential Small Business Impacts

The Department is considering the possibility of small businesses being impacted by the

promulgation of minimum efficiency standards for distribution transformers. The Department is

aware that there are small distribution transformer manufacturers, as defined by the Small

Business Administration, who would be impacted by a minimum efficiency standard. The

Department will study the impacts to these small businesses in greater detail during the

manufacturer impact analysis, which it will conduct as part of the NOPR analysis.

3.5.2 Distribution and Sales Channels

A schematic of the structure of the distribution transformer market is shown in Figure

3.5.1.1 This illustration depicts the major market players and the level of interaction between

each. The solid lines show more common distribution and sales channels and dashed lines less

frequently used channels.

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Figure 3.5.1 Market Delivery Channels for Distribution Transformers

Source: ORNL, Determination Analysis of Energy Conservation Standards for Distribution

Transformers, 1996.

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.1 There are also utilities who make

transformer purchases through distributors, such as some rural cooperatives and municipalities. 

When placing an order, the electric utility provides a specification, including the value it places

on 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 bid, 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 specification they require for their finished

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

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

when a repair does take place, it may be carried out by a repair shop or at the manufacturer’s

facility (e.g., when failure occurs within the warranty period). Additionally, some utilities may

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

replacement.

3.5.3 Import Duties on Core Steel

Import duties are applied to core steels originating in Japan and Italy. This duty is levied

at the port of entry, and amounts to a 31 percent anti-dumping duty. Generally, domestic

suppliers are able to offer equivalent specification core steels without the duty, however one

particular type of steel manufactured by Nippon Steel Corporation in Japan is patented, and is

not available to U.S. transformer manufacturers without the 31 percent duty. This electrical

steel, known as ZDMH, is a high-permeability, mechanically-scribed electrical steel, with lower

losses than conventional core steels. The mechanical scribing process reduces the losses,

making it the most efficient conventional core steel for wound-core construction.

Mexico and Canada do not apply this 31 percent import duty to electrical steel, enabling

manufacturers in these neighboring countries to produce transformers with ZDMH at a lower

cost (the steel is not taxed if incorporated into a finished product). Thus, manufacturers in these

countries have a competitive cost advantage of 31 percent on core steel, the most expensive part

of a distribution transformer. For this reason, the Department analyzed two price points for

designs using ZDMH, to make sure that when considering the appropriate standard level, it does

not regulate to a point where U.S. manufacturers would have a competitive disadvantage. The

two price points are for ZDMH purchased in Mexico or Canada and ZDMH purchased in the

United States. The prices used for this core steel (discussed in Chapter 5) reflect the 31 percent

tariff: $1.40 per pound in Mexico and Canada and $1.83 per pound for a U.S. manufacturer.

3.6 TOTAL OWNING COST EVALUATION

In 1995, it was estimated that there were approximately 44 million liquid-immersed

distribution transformers in service, of which approximately 90 percent were owned by electric

utilities.1 For dry-type transformers, there were approximately 12 million units in service, which

were primarily used by commercial and industrial customers.1 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 Reports.1, 2

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

(TOC) evaluation formulae (Equation 3.1), incorporating core and winding losses into their

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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,

TOC = (NL × A) + (LL × B) + Price Eq. 3.1

where:

TOC total owning cost ($),

NL no-load loss (Watts),

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.3 For a detailed discussion on the development and use of the TOC

formula, including examples, see the proposed draft industry standard document, IEEE

PC57.12.33. 

Utilities who use A and B factors will 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 operating life and the

depreciation period of a liquid-immersed transformer. In the last five years, deregulation has

raised concerns about payback periods as 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.1 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 five or ten years, and thus won’t recover the higher initial cost of a more efficient design. 

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

utilities to purchase designs with lower first costs and higher losses. A more recent estimate of

the percentage of electric utilities using the TOC loss evaluation formula is 50 percent for 2001.4

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

for commercial and industrial customers3 (i.e., typical users of dry-type transformers), but the

market itself appears dichotomous, split between the medium-voltage and the low-voltage units. 

The medium-voltage, dry-type transformer market functions similarly to the liquid-immersed

market, in that manufacturers receive custom-build orders with specifications or design criteria

from the customer. 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. 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

catalogue/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.1

3.7 VOLUNTARY PROGRAMS

The Department reviewed several voluntary programs promoting efficient distribution

transformers in the United States. These include the National Electrical Manufacturers

Association (NEMA) TP 1 Standard, the U.S. Environmental Protection Agency’s Energy Star

Transformers program and the Federal Energy Management Program’s TP 1 purchase program. 

The Department also reviewed several voluntary programs affecting distribution transformers

that are operating at a regional level, including the New York State Energy Research and

Development Authority, National Grid, Northeast Utilities, Northeast Energy Efficiency

Partnership, Sacramento Municipal Utility District, United Illuminating, Wisconsin Public

Power and Xcel Energy.

3.7.1 National Electrical Manufacturers Association TP 1 Standard

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

transformers.5 It encompasses liquid-immersed distribution transformers, single- and threephase as well as dry-type, low-voltage and medium-voltage, single- and three-phase. NEMA

established this national voluntary efficiency standard in 1996, and revised it in 2002.

Manufacturers must meet or exceed the minimum efficiency targets presented in Tables 3.7.1

and 3.7.2 at the appropriate loading points. TP 1 efficiency levels are adopted by states and

other agencies who are interested in establishing a standard. At a national level, the U.S.

Congress is considering the TP 1 standard for low-voltage dry-types (the draft Energy Bill is

discussed briefly in section 3.8.8). More information about TP 1 can be obtained by contacting

NEMA, tel: 703-841-3200, or by visiting

http://www.nema.org/index_nema.cfm/1427/47168E11-AA56-4B4E-9F329B339C23F115/.

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Table 3.7.1 NEMA 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 85oC, no-load loss 20oC

Efficiency levels at 50 percent of unit nameplate load

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Table 3.7.2 NEMA Efficiency Levels for Dry-Type 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 > 60kV 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: Temperature75oC 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 ENERGY STAR® Transformers

The U.S. Environmental Protection Agency (USEPA) and the DOE manage 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 must

meet or exceed in order to be classified as an ENERGY STAR® transformer is the same as NEMA’s 

TP 1. The activities of this program include 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 is sponsored and

promoted by the USEPA and DOE, with additional promotional support from the Consortium for

Energy Efficiency. For more information about this program, please contact the USEPA tel: 1-

888-STAR-YES or the Consortium for Energy Efficiency, tel: 617-589-3949.

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3.7.3 Federal Energy Management Program

The Department 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. FEMP 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: 1-800-363-3732.

3.7.4 New York State Energy Research and Development Authority

The New York State Energy Research and Development Authority (NYSERDA)

manages the New Construction Program and the Smart Equipment Choices Program, which

work to educate electrical system designers, electrical contractors, corporate facility planners,

and building developers about Energy Star transformers and their benefits.6 These programs

previously offered short-term incentives to create demand, focusing on NEMA TP 1 dry-type

distribution transformers. However, the Energy Conservation Construction Code of New York

State mandated the NEMA TP 1 standard for distribution transformers; therefore, as of July

2002, NYSERDA removed the incentives for TP 1 transformers under these two programs. 

The NYSERDA has continued some incentives under the New Construction Program for

distribution transformers exceeding the TP 1 standard. NYSERDA calculates incentives based

on the energy-saving opportunities identified for a specific project. Incentives are capped at 70

percent of the incremental cost and NYSERDA will only reduce a participant's costs to a

one-year payback. Custom incentives for installing TP 1 transformers in retrofit applications are

also available from NYSERDA. The level of incentive for retrofits is performance-based, i.e.,

based on verified annualized kWh savings for up to a two-year period following project

installation. For more information, contact NYSERDA at tel: 518-862-1090.

3.7.5 National Grid

National Grid manages the Design 2000 Plus and the Energy Advantage New Hampshire

Programs, which both work to promote energy efficiency in design and construction practices in

new and renovated commercial and industrial buildings.7 The target equipment of these

programs are NEMA TP 1 dry-type, low-voltage, three-phase units. The programs offer rebates

in Rhode Island and New Hampshire territories (the participating utilities are Narragansett

Electric and Granite State, respectively). These rebates cover 75 percent of a compliant

transformer's incremental cost over the least expensive TP 1 model, or they buy down the unit

cost until it offers a 1.5-year payback. The maximum rebate amounts are presented in Table

3.7.3. The program also offers training for transformer specifiers and provides marketing

activities to promote Energy Star units. For more information, contact National Grid at tel:

508-389-2000.

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Table 3.7.3 National Grid Design 2000 Rebate Amounts

Dry-Type, Low-Voltage, Single-Phase

kVA Maximum incentive per unit kVA Maximum incentive per unit

15 $130 112.5 $520

30 $190 150 $560

45 $225 225 $1150

75 $440 - -

3.7.6 Northeast Utilities

Northeast Utilities manages the Energy Conscious Construction Program which provides

incentives to builders and contractors to support the purchase of energy-efficient transformers.8

 

The target equipment of this standard are NEMA TP 1 dry-type, low-voltage, three-phase

distribution transformers. The program focuses its efforts on projects within the customer area

of Northeast Utilities, covering 70 to 100 percent of the additional incremental cost for a TP 1

transformer, depending on measured energy savings. The maximum rebate amounts available

are presented in Table 3.7.4. For more information, contact Northeast Utilities at tel:

1-800-286-5000.

Table 3.7.4 Northeast Utilities Energy Conscious Construction Rebate Amounts

Dry-Type, Low-Voltage, Three-Phase

kVA Maximum incentive per unit kVA Maximum incentive per unit

15 $640 150 $1140

30 $480 225 $1440

45 $570 300 $1800

75 $670 500 $2550

112.5 $700 - -

3.7.7 Northeast Energy Efficiency Partnership

The Northeast Energy Efficiency Partnership (NEEP) manages a program called Energy

Star Customer Side Transformers.9 This program works to promote Energy Star transformers

and make them the standard for all new customer-side commercial and industrial construction in

the Northeastern United States. The activities of this program include information and

marketing campaigns and training for contractors and building owners. In addition to NEEP,

this program is co-sponsored by NStar, Massachusetts Electric and the U.S. Environmental

Protection Agency. For more information, contact NEEP at tel: 1-781-860-9177.

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3.7.8 Sacramento Municipal Utility District

The Sacramento Municipal Utility District (SMUD) manages the Commercial and

Industrial Retrofit Program, which works to reduce peak demand of commercial and industrial

customers.10 This program advocates Energy Star transformers, offering financial incentives to

accelerate market adoption. SMUD offers $300 per average kW saved from 1:00 p.m. to 9:00

p.m., not to exceed 40 percent of the project cost, or $30,000 per year, per customer account. 

Incentives for retrofit applications are likely to continue, notwithstanding the adoption of

statewide appliance standards that mandate NEMA TP-1 standards. For more information,

contact SMUD at tel: 1-888-742-7683. 

3.7.9 United Illuminating

United Illuminating manages an energy-efficiency initiative in Connecticut called the

Energy Blueprint Program.11 This program works to promote energy-efficient buildings and

commercial equipment, including lighting, building envelope, Heating Ventilation & Air

Conditioning (HVAC) equipment, motors, and other energy components of commercial and

industrial systems. For transformers, Energy Blueprint promotes Energy Star transformers. The

program offers cash incentives ranging from $640 to $2,550. For more information, contact

United Illuminating at tel: 1-800-722-5584.

3.7.10 Wisconsin Public Power

Wisconsin Public Power manages a program called the Energy Star Transformer

Incentive.12 This program is based on Energy Star transformers. A cash incentive is provided,

based on realized energy savings. Before purchasing a transformer, the buyer must contact one

of the sponsoring electric utilities to receive a rebate for purchasing a TP 1 transformer. For

more information, contact Wisconsin Public Power at tel: (608) 834-4500.

3.7.11 Xcel Energy

Xcel Energy manages the Custom Efficiency Program in Minnesota to help reduce peak

load demand of commercial and industrial customers.13 Based on the NEMA TP 1 standard for

low- and medium-voltage, dry-type distribution transformers, this program offers financial

incentives of up to US$200 per kilowatt of average demand savings achieved during the system

peak period by utilizing an energy efficient distribution transformer. For more information,

contact Xcel Energy at tel: 1-800-328-8226.

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3.8 REGULATORY PROGRAMS

The Department is aware of state-level regulatory programs that impact the distribution

transformer market in California, Massachusetts, Minnesota, New York, Oregon, Vermont, and

Wisconsin. In addition, on a national level, Congress is presently considering efficiency

standards at the NEMA TP 1 level for low-voltage, dry-type distribution transformers. If this

bill were to become law, it would preempt the Department’s rulemaking process for low-voltage, 

dry-type transformers only. Rulemaking analysis would continue on the medium-voltage, drytype and the liquid-immersed distribution transformers. At the international level, the

Department is aware of standards in both Canada and Mexico that may impact the companies

servicing the North American market. Summaries of all these regulatory programs are provided

in this section.

3.8.1 California Efficiency Standard

The Title 20 Appliance Efficiency Standards regulation mandates that transformers

manufactured after March 1, 2003 and sold in California be NEMA TP 1 compliant.14 Title 20

was approved by the California Energy Commission in November 2002; final approval is

pending litigation initiated by trade associations of federally covered products. A subsequent

round of legislation targeting the liquid-immersed and dry-type, medium-voltage product

categories is scheduled in 2003. For more information, contact the California Energy

Commission at tel: 916-654-4058.

3.8.2 Massachusetts Efficiency Standard

The Massachusetts Electric Industry Restructuring Act of 1997, section 313, mandates

that all distribution transformers sold or installed after December 31, 1999 meet the NEMA TP 1

efficiency level.15 The Act has resulted in improved product availability of TP 1 transformers,

particularly for dry-types. Project managers indicate that electrical engineers are becoming more

familiar with TP 1 through code training provided by Massachusetts Board for Building

Regulations and Standards (BBRS). The standard impacts new and remodeled buildings as well

as electric utilities, and is enforced by building code inspectors. For more information, contact

the BBRS at tel: 617-727-3200.

3.8.3 Minnesota Procurement Efficiency Standard

The Minnesota Building Code requires that TP 1 compliant transformers be installed in

new and remodeled buildings for which permit applications were received on or after July 20,

1999.16 This standard affects both dry-type, low- and medium-voltage, single- and three-phase;

and liquid-immersed, single- and three-phase transformers. The market impact for this standard

is being evaluated, as the TP 1 exemption of harmonic transformers resulted in expansion of the

market for K-4 units (harmonic tolerating transformers), which are often less efficient than the

baseline transformers targeted by the State Building Code. Harmonic tolerating transformers are

classified as “K-type” transformers, with the number after the letter K representing the severity

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of the harmonics the transformer can tolerate. The Department, when informed of this market

development in Minnesota, consulted with manufacturers and decided to set the minimum value

of K-13 as exempt (see the definition in Section 3.2 of this chapter).

Minnesota has taken steps to close this building code loophole with K-4 units by

requiring documentation in the building permit application demonstrating that a harmonic

transformer is legitimately needed before it can be substituted for a transformer meeting the

minimum efficiency standard. For more information, contact the Minnesota Department of

Public Service, tel: 651-297-2313.

3.8.4 New York Efficiency Standard

New York State adopted the TP 1 standard for commercial buildings.17 The Energy

Conservation Construction Code of New York State formally mandated the TP 1 standard

starting July 2002. The Code covers dry-type, low- and medium-voltage, single- and threephase; and liquid-immersed, single- and three-phase transformers. The Code is focused on new

buildings and renovations, and compliance is enforced by state building inspectors. For more

information, contact the New York Department of State, tel: 518-474-0050.

3.8.5 Oregon Efficiency Standard

Oregon is considering an amendment to its State Energy Code, which would require TP 1

transformers.18 This standard would take effect in October 2003, and would be based on the

NEMA TP 1 level for dry-type, low- and medium-voltage, single- and three-phase, distribution

transformers. For more information, contact the Oregon Department of Energy, tel:

503-378-4040.

3.8.6 Vermont Efficiency Standard

The 2001 Vermont Guidelines for Energy-Efficient Commercial Construction endorse

NEMA’s TP 1 minimum efficiency standards.19 The City of Burlington's Energy Code went a

step further and adopted TP 1 as a mandatory standard within its jurisdiction. The mandatory

standard took effect in Burlington in January 2001, and the voluntary statewide standard took

effect in January 2002. The distribution transformers covered by the Burlington Energy Code

and the Vermont Guidelines include dry-type, low- and medium-voltage, single- and threephase. The inclusion of liquid-immersed transformers will be considered in the next round of

code revisions. To encourage compliance and adoption, Burlington Electric is offering technical

support, code training activities, and financial incentives to increase vendor and contractor

awareness of the standard. For more information, contact the Vermont Department of Public

Services, tel: 802-828-2811.

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3.8.7 Wisconsin Efficiency Standard

The State of Wisconsin Master Specifications adopted by the Wisconsin Department of

Administration require that TP 1 compliant transformers be installed in all new state facility

construction and remodeling projects starting March 2000.20 This means TP 1 is not part of the

state building code, but in fact applies to state facility construction and renovation projects. The

specifications cover dry-type, low-voltage, single- and three-phase distribution transformers. At

present, there are no activities underway that might extend the TP 1 standard to commercial

buildings. For more information, contact the Wisconsin Department of Administration, tel:

608-266-3685.

3.8.8 U.S. Congress Draft Energy Bill

Congress is considering amending the Energy Policy Act to require that low-voltage

dry-type transformers manufactured on or after January 1, 2005 meet the NEMA TP 1 minimum

efficiency standards. If the bill becomes law, it would regulate low-voltage, dry-type

distribution transformers at the NEMA TP 1 level. This standard level would preempt the

Department’s Rulemaking analysis for low-voltage, dry-type transformers. For a status update

on the draft Energy Policy Act amendments, contact the Committee on Energy and Commerce,

the U.S. House of Representatives, tel: 202-225-2927.

3.8.9 Canadian Efficiency Standard

The Canadian Government is presently engaged in the evaluation of mandatory

performance standards for distribution transformers.21 A final rule was published for dry-type

transformers (Canada Gazette, April 10, 2003), calling for compliance with efficiency values

listed in Canadian Standards Association (CSA) standard C802.2-00 starting on January 1, 2005. 

Liquid-immersed distribution transformers may be addressed by a voluntary program, that has

been drafted to allow supervisory oversight by the Canadian Government. 

In June 1997, the Office of Energy Efficiency (OEE) of 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

careful consideration of harmonizing with NEMA's TP 1 levels.

The CSA drafted and published three documents, CSA C802.1-Minimum Efficiency

Values for Liquid-Immersed Distribution Transformers, CSA C802.2-Minimum Efficiency

Values for Dry-Type Transformers, and CSA C802.3-Maximum Losses for Power Transformers, 

which supersedes the previous C802-94-Maximum Losses for Distribution, Power and Dry-Type

Transformers.

Some of the main points from these documents are:

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• Minimum efficiency tables in C802.1 set the standard for liquid-immersed transformers

in single- and three-phases at the TP 1 reference conditions, and outlined the process of

applying the TOC method of evaluating losses. 

• The percent efficiency in C802.2 for dry-type transformers is measured according to a

per unit loading of 35 percent for low-voltage and 50 percent for medium-voltage. The

efficiency levels are similar to 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.

• C802.3 is a voluntary standard that sets performance targets based on core and coil

losses. It is not part of any mandatory programs in Canada.

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 establishing minimum voluntary standards for liquid-immersed

transformers took a detour after several years of development. The CSA was harmonizing the

Canadian standard with NEMA’s TP 1, selecting the range of regulated products, the efficiency

levels and the transformer test procedures based on 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, which had incorporated energy efficiency into their

transformer procurement practices. It was found that more than 95 percent of the liquidimmersed distribution transformers sold in Canada already met the levels set by C802.1.

In 2000, the Canadian Government decided not to continue with the development of a

mandatory national standard for liquid-immersed distribution transformers. Instead, the major

Canadian utilities and manufacturers, through the Canadian Electricity Association (CEA),

presented a voluntary agreement to NRCan, which is under consideration. Under the terms of

this agreement, the electric utilities will 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, consider appropriate action. The voluntary agreement between

NRCan and the liquid-immersed stakeholder group is in its final stages of completion.

Dry-Type Transformer Standards

The NRCan pre-published an amendment to the regulations that includes dry-type

transformers on December 14, 2002. This prepublication gives notice of intent to regulate

minimum energy performance standards for dry-type transformers manufactured after January 1,

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2005. Depending on the feedback from stakeholders, NRCan may proceed with regulation of

these transformers.

Dry-type transformers in Canada include a broad range of kVA ratings, greater than those

of TP 1, or the Department of Energy’s proposed rulemaking. The proposed definition in Canada

reads that a dry-type transformer: (a) is either single-phase with a capacity from 15 to 833 kVA

or three-phase with a capacity from 15 to 7500 kVA, (b) has a nominal frequency of 60 Hz, and

(c) has a primary voltage of 35 kV or less and a secondary voltage of 600V or less (Canada

Gazette Part 1, Vol. 136, No. 50).

 See Table 3.8.1 for the percent efficiency required for dry-type transformers as taken from

the standard C802.2. 

Table 3.8.1 Canadian Standards for Dry-Type Transformers

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

kVA Minimum

LowVoltage,

(V)

1.2 kV Class,

% eff. at 

0.35 of

nameplate

BIL 20-150

kV, % eff. at

0.50 of

nameplate

kVA Minimum

LowVoltage,

(V)

1.2 kV

Class, %

eff. at 0.35

nameplate

BIL 20-150

kV, % eff.

at 0.50 of

nameplate

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

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3.8.10 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 two decades ago when it

enacted NOM-J116 in 1977.22 However, in 1989, a presidential decree modified the Normas

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

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) re-established the

mandatory character of NOMs. In addition, this law empowered the Secretaría de Energía (the

Mexican equivalent to the US 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-1997.23 NOM-002 was published in the Diario Oficial de la

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

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 3.8.2 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 15 kV

Up to 25 kV

Up to 34.5 kV

Installation Application Pad; Pole; Substation; Submersible

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. The next two tables

presented here, Tables 3.8.3 and 3.8.4, show the efficiency requirements under NOM-002 for

large manufacturers and importers of distribution transformers in Mexico. The second set,

Tables 3.8.5 and 3.8.6, provide a less stringent, transitional standard for small manufacturers

with cumulative annual production under 9 kVA. 

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The second set of tables refers to a temporary standard, established for eighteen months

to ease the transition of small manufacturers to the new standard. In May 2001, with the

transition period ending, officials from the Mexican Government’s Energy Secretariat met with

small manufacturers. These officials found that small manufacturers have not had enough time

to bring their production up to the standards in NOM-002. Because these manufacturers

represent an important source of employment, the Mexican Government decided to extend the

transitional period for small manufacturers, without specifying the duration of this extension.24

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

several Voluntary Mexican Standards. At this point, there are no plans to revise or propose

additional standards for distribution transformers.

Table 3.8.3 Minimum Efficiency Levels for Transformers in Mexico

Type Capacity kVA

Insulation Class

Up to 15 kV (%) Up to 25 kV (%) 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 98.8

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 98.5

225 98.75 98.65 98.55

300 98.80 98.70 98.60

500 98.90 98.80 98.7

Note: These efficiency levels are applicable at 100 percent of nameplate load.

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Table 3.8.4 Maximum Allowed Losses for Transformers in Mexico

Type Capacity

kVA

Insulation Class

Up to 15 kV (Watts) Up to 25 kV (Watts) Up to 34.5 kV (Watts)

Core Winding Core Winding Core Winding

LiquidImmersed,

SinglePhase

5 30 77 38 74 63 55

10 47 131 57 131 83 116

15 62 182 75 184 115 160

25 86 282 100 294 145 274

37.5 114 399 130 422 185 405

50 138 495 160 524 210 526

75 186 648 215 696 270 718

100 235 826 265 898 320 946

167 365 1322 415 1443 425 1603

LiquidImmersed,

Three-Phase

15 88 226 110 220 135 210

30 137 397 165 400 210 387

45 180 575 215 587 265 583

75 255 887 305 915 365 932

112.5 350 1247 405 1308 450 1379

150 450 1526 500 1630 525 1759

225 750 2094 820 2260 900 2410

300 910 2734 1000 2951 1100 3160

500 1330 4231 1475 4598 1540 5046

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Table 3.8.5 Transitional Standards for Small Manufacturers in Mexico

Type Capacity kVA

Insulation Class

Up to 15 kV (%) Up to 25 kV (%) Up to 34.5 kV (%)

Liquid-Immersed,

Single-Phase

5 97.50 97.40 97.30

10 97.75 97.70 97.60

15 97.95 97.90 97.80

25 98.15 98.10 98.00

37.5 98.35 98.25 98.15

50 98.50 98.40 98.25

75 98.60 98.50 98.40

100 98.70 98.55 98.50

167 98.80 98.60 98.55

Liquid-Immersed,

Three-Phase

15 97.50 97.40 97.30

30 97.80 97.70 97.60

45 98.00 97.90 97.80

75 98.15 98.05 97.95

112.5 98.25 98.15 98.05

150 98.35 98.25 98.15

225 98.45 98.35 98.20

300 98.50 98.45 98.25

500 98.55 98.50 98.35

Note: These efficiency levels are applicable to manufacturers with less than 9 kVA annual production, and should be

achieved at 100 percent of nameplate load. 

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Table 3.8.6 Transitional Maximum Losses for Small Manufacturers in Mexico

Type Capacity

kVA

Insulation Class

Up to 15 kV (Watts) Up to 25 kV (Watts) Up to 34.5 kV (Watts)

Core Winding Core Winding Core Winding

LiquidImmersed,

SinglePhase

5 36 92 45 88 74 65

10 61 169 71 164 103 143

15 80 261 93 229 141 196

25 110 361 123 361 176 334

37.5 139 490 157 511 221 486

50 166 595 190 623 254 637

75 238 827 270 872 333 887

100 292 1025 335 1136 385 1138

167 439 1589 530 1841 515 1942

LiquidImmersed,

Three-Phase

15 108 277 133 267 156 260

30 173 502 206 500 260 478

45 218 700 259 706 316 696

75 316 1098 374 1118 442 1128

112.5 439 1565 501 1619 551 1686

150 573 1944 627 2045 650 2177

225 934 2608 1005 2770 1121 3003

300 1141 3428 1195 3528 1380 3964

500 1760 5597 1848 5766 2055 6333

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

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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 non-flammable liquid-immersed transformers,

relative to the cost of dry-type prevents wide-spread 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, all dry-type transformers are larger than liquidimmersed 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 part of the transformer market because they offer safety,

environmental, and application advantages for industrial and commercial customers.

3.9.2 Transformer Efficiency Levels

There are two main kinds of losses in transformers, no-load (core) losses and load

(winding) losses. Core losses are virtually constant, 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

75kVA dry-type transformer, built with copper windings and an 80 degree temperature rise. 

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

This illustration clearly shows the exponential growth of the winding losses, in relation to the

square of the load applied to the transformer.

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

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

Eq. 3.2

where:

EEload percent efficiency at a given per unit load, 

Pload per unit load,

kVA kVA rating of transformer,

NL no load loss (Watts),

LL load loss (Watts), and

T temperature correction factor.

As equation 3.2 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

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Figure 3.9.2 Transformer Efficiency Varies with Load

Figure 3.9.1, the Department used equation 3.2 to calculate the efficiency of this 75kVA 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 shows that the efficiency of a transformer is not static, but

rather varies depending on the load applied. The apex, or highest point on the efficiency curve,

occurs at the loading point where core losses are equal to winding losses.

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

point. The loading points used in the Department’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 nearly 120 years of technology evolution, starting in 1885 with William Stanley. 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.1

This section summarizes some of the main technological methods for reducing transformer

losses.25

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

whenever the transformer is energized — that is, available to provide or providing load. Core

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

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losses are caused by the magnetic lag or reluctance of the core molecules to reorient themselves

with the 60 Hz 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. In both instances, hysteresis

and eddy current losses 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 (e.g., Metglas®). However, these measures

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

core flux density, larger 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.1 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 losses in one area

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

the overall impacts on transformer manufacturing costs.

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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

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.

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). The

Department’s analysis of the relationship between cost and efficiency for distribution

transformers is presented in Chapter 5.

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1. 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. ORNL-6847. See website:

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

2. 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

3. 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.

4. HVOLT, 2003. Distribution Transformer Market Shipment Estimates for 2001, HVOLT Inc.,

Charlotte, N.C., report submitted February 17, 2003; Hopkinson, P., 2003. HVOLT Inc.,

Charlotte, N.C., personal communication, February 3, 2003.

5. NEMA, 1996. NEMA Standards Publication No. TP 1: Guide for Determining Energy

Efficiency for Distribution Transformers, National Electrical Manufacturers Association,

Rosslyn, VA.; NEMA, 2002. NEMA Standards Publication No. TP 1: Guide for Determining

Energy Efficiency for Distribution Transformers, National Electrical Manufacturers Association,

Rosslyn, VA.

6. Brown, 2003. Matthew Brown, NYSERDA, Albany, New York, personal communication,

February 2003; Cullen O'Brien, NYSERDA, Albany, New York, personal communication,

February 2003.

7. Dagher, 2003. Fouad Dagher, National Grid, Westborough, Massachusetts, personal

communication, February 2003; National Grid, Design 2000 Plus Transformers Worksheet,

<http://www.narragansett.com/filelib/pdf/d2wk6-02.pdf>, viewed January 2003. Energy

Advantage New Hampshire Transformers Worksheet,

<http://www.granitestateelectric.com/filelib/pdf/new_transformer_complete.pdf>, viewed

January 2003.

8. Northeast Utilities, Energy Efficiency Services for Custom Services and New Construction

and Major Renovation, personal communication, July 2002.

9. Hinge, 2003. Adam Hinge, Northeast Energy Efficiency Partnerships, Inc., Lexington,

Massachusetts, personal communication, February 2003

REFERENCES

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10. Coomes, 2003. Harlan Coomes, Sacramento Municipal Utility District, Sacramento,

California, personal communication, February 2003

11. Haller, 2003. Roy Haller, United Illuminating, New Haven, Connecticut, personal

communication, February 2003 

12. Hoffman, 2003. Gregory Hoffman, Oconomowoc Utilities, Oconomowoc, Wisconsin,

personal communication, February 2003; Voigtlender, 2003. Chris Voigtlender, Waupun

Utilities, Waupun, Wisconsin, personal communication, February, 2003

13. Gruen, 2003. William Gruen, Xcel Energy, Minneapolis, Minnesota, personal

communication, February 2003; Lidbeck, 2003. Kim Lidbeck, Xcel Energy, Minneapolis,

Minnesota, personal communication, January 2003 

14. Martin, 2003. Michael Martin, California Energy Commission, Sacramento, California,

personal communication, February 2003; Holland, 2003. James Holland, California Energy

Commission, Sacramento, California, personal communication, February 2003

15. Weitz, 2002. David Weitz, Massachusetts Board of Building Regulations and Standards,

Boston, Massachusetts, personal communication, September 2002

16. Nelson, 2002. Bruce Nelson, Minnesota Department of Public Service, St. Paul, Minnesota,

personal communication, September 2002

17. Addario, 2002. John Addario, New York Department of State, Albany, New York, personal

communication, September 2002; Andrews, 2002. Ray Andrews, New York Department of

State, Albany, New York, personal communication, September 2002

18. Stephens, 2002, Charles Stephens, Oregon State Department of Energy, Salem, Oregon,

personal communication, September 2002

19. Lloyd, 2002. Randall Lloyd, Vermont Dept. of Public Services, Montpelier, Vermont, 

personal communication, September, 2002; Doe, 2002. Loren Doe, Burlington Electric,

Burlington, Vermont, personal communication, September, 2002

20. Cibulka, 2002. Richard Cibulka, Wisconsin Department of Administration, Madison,

Wisconsin, personal communication, September, 2002 

21. Delves, Katherine, P.E., Natural Resources Canada, Office of Energy Efficiency, Ottawa,

Ontario, Canada, personal communication, February 5, 2003.

22. 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).

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23. 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 NOM-002-SEDE-1997), Department of Energy, Mexico

City, Mexico.

24. ANFATE, 2001. Asociación Nacional de Fabricantes de Transformadores Eléctricos

(ANFATE, National Association of Transformer Manufacturers), Mexico City, Mexico. 

Personal communication, June 2001.

25. 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 Ridge,

Tennessee. ORNL-6847. See website:

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

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