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

EE-DET-97-550 COMMENT 00A
PRESENT DISTRIBUTION TRANSFORMER 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

EE-DET-97-550 COMMENT 00A
FUTURE DISTRIBUTION 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)

EE-DET-97-550 COMMENT 00A
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

EE-DET-97-550 COMMENT 00A
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

Open-Wound Dry Cast Resin/D Liquid Non-Utility Liquid-Utility

Annual No. of Shipments of Distribution

Transformers (1980-20 1) CAR.1l. ffAMIT.DM

EE-DET-97-550 COMMENT 00A
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

Open-Wound Dry Cast Resin-Dry Liquid Non-Utility Liquid-Utility

Annual MVA Shipments of Distribution

Transformers (1980-2010)

EE-DET-97-550 COMMENT 00A
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.

EE-DET-97-550 COMMENT 00A
- - - - 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

EE-DET-97-550 COMMENT 00A
DISTRIBUTION TRANSFORMER PURCHASING PRACTICES

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

EE-DET-97-550 COMMENT 00A