## DISTRIBUTION TRANSFORMER MARKET

Sujit Das Energy and Global Change Analysis Section

Energy Division
Presented To: Project Review Meeting Distribution Transformer Determination Study

Washington, DC 

### December 7, 1994

## PRESENT DISTRIBUTION T 

## RANSFORMER 

## MARKET

OVERALL Two Major Types -- Liquid-Filled and Dry (Mostly Liquid-Filled) Higher kVAs Are Three Phase Total Value Of Product Shipments -- $1.5 Trillion in 1992 (Coming From More Than 230 Companies Having Annual Shipments > $100K) Imports Have Been More Than Exports -- 15% and 10% Of The Total Value Of Annual Shipments, Respectively in 1992 (Imports Used Mainly By Unregulated Independent Power Producers) Annual Sales Data Only Collected By NEMA Are Used ( Updated To Reflect Its Current Industry Membership Rates Of 72 % and 66% For Liquid -Filled And Dry-Type, Respectively) 

### LIQUID-FILLED MARKET (Oil, Silicone , R Temp.) Predominantly Serves Utilities (90% -- Total; 96% -- Single Phase; 80% - - Three Phase) Single Phase Pole Type Dominance And Limited To Some Major Manufacturers 

### Annual Sales Volume (1.1M Units, 65,000 MVA) [Stock 40M Units] Use of PCBs Remains An Issue For Concern

## FUTU RE DIS TRIBUTION TRANSFORMER MARKET

The Utility Market Depends On New Housing Starts; Whereas Gross Pvt. Domestic Investment Forecasts The Non-Utility Market The Industry Outlook Is Expected Not Much Different From Its Historical Trends [Annual Growth Rate -- 0.5-1% (Utility) and 2-2.5% (Non-Utility] 

### Liquid-Filled -- 65,000 MVA ('93) -- 79,000 MVA ('10)

1.1M Units ('93) -- 1.25M Units ('10) Dry-Type -- 27,000 MVA ('93) -- 41,300 MVA ('10)

380K Units ('93) -- 530K Units ('10) Growth In Pad Mounted Liquid-Filled Utility Transformers (At The Expense Of Pole-Type -- Aesthetic Concerns) 

### The Dry-Type Market Share To The Total MVA Sold In 2010 Will Be 35% (30% In 1993)DRY-TYPE MARKET (Ventilated, Cast)

Contributes More Than 90% Of The Total To Non-Utilities Three Phase Dominance and Numerous Manufacturers (200-400) Less Capital Intensive But More Volatile 

### Annual Sales Volume (380K Units -- 260K Ventilated, 120K Cast; 27 MVA) [Stock -- 3M Units] Numerous Less Than 10 kVA Units (25-30% Of Total 1.4M Units Are Distribution Transformers) Gaining Much Wider Acceptance


### AMORPHOUS CORE Comparatively New And The Most Energy Efficient Currently Available (Core Losses 20% Of That In Std. Transformers) Typically 20-30% More Expensive Than Energy Efficient Silicon Steel Accounts For Less Than 10% Of Annual Purchases

### 2,000

1,800 1,600 1,400 1,200 1,000 

### 800 600 400 200 0 1980 1984 1988 1992 1996 2000 2004 2008 1982 1986 1990 1994 1998 2002 2006 2010 

# Year Op en-Wound Dry Cast Resin/D Liquid Non-Utility Liquid-Utility



# Annual No. of Shipments of Distribution Transformers (1980-20 1) CAR.1l. ffA MIT.DM

### 130,000

120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1980 1984 1988 1992 1996 2000 2004 2008 1982 1986 1990 1994 1998 2002 2006 2010 

# Year O p en-Wound Dry Cast Resin-Dry Liquid Non-Utility Liquid-Utility



# A n nu al MVA Shipments of D istrib ution T ransfor mers (1980-2010)

## TRANSFORMER INDUSTRY MARKET STRUCTURE

Many Market Players And Their Interactions Exist Manufacturers (Mfrs, -- Sell Large or Custom Orders Directly To EndUsers (Mainly Utilities) *OEMs -- Buy Directly From Mfrs. According To Its Specs. Mfrs' Representatives -- Technical Resource and Broker (Agencies -- Small Mfrs and Sales Rep. -- Large Mfrs) Stocking Distributors -- Carry Inventories Of Stock Order Items *A -- Write Specs. For Commercial & Industrial (C&I) End-Users (Not Always Buy) Electrical Contractors (ECs) -- Buy Based On Agents' Specs. End-Users -- *Utilities -- Direct Purchase Through Mfrs.

C&I* -- Buy Through Electrical Contractors (Sometimes Agents) Used Transformer Or Repair Shops - - Repairs Usually Not Done; ECs buy/sell used ones
Indicate Market Players Who Are Responsible For Writing Specs.- - - - n End-User.,

Used Transformers or Repair Shops 

### Manufacti

Dry • Ventillated • Cast rer

Liquid • Oil • Silicone • R Temperature OEMs

I

Manufacturers' Representative Stocking Distributor Agents for End-User I

(A&E or Contractor)

No.

- - - - - - - - - -

Large User or Custom Order) i
Market Delivery Channels for Distribution Transformers



# 4

Electrical Contractor ndustrial

Commerical

Utilities

Note: The most common route is SOLID LINE

## DIS TRIBUTI ON TRANSFORMER PURC HASING P RACTICES

First Cost -- Widely Used By OEMs and C&I End-Users (Where Buyer Is Not The User) Total Lie Cycle Owning Cost -- Losses Are Evaluated But Its Values Vary Widely (Mainly Used By Utilities And Heavy Industrial End-Users) Band Of Equivalence -- Compensates For Uncertainties In Loss Evaluation Factor Assumptions -- Within 3% Of Lowest TOC As Equivalent TOC (Used By Utilities) Oversizing -- C&I End-Users (Contribute 85% Of Total Under Loaded Transformers) -- For Better Motor Start-Up, Reliability, Longer Life and Less Load Losses Winding Material (Aluminum Vs Copper)

-- Copper-Wound Regarded As More Energy Efficient And Reliable Than Aluminum-Wound Ones