# Life Cycle Cost Estimation and Analysis of Transformers Based on Failure Rate
## 2 Materials and Methods
### Life Cycle Cost Analysis  
The life cycle of electrical equipment includes the entire process of equipment from design planning to transportation to designated locations for installation and operation, as well as various maintenance, technical improvements, troubleshooting, and decommissioning during use. Any link in the entire life cycle requires a certain amount of expenditure and the sum of these expenses is called the life cycle cost. This cost is no longer a single acquisition cost; it includes other direct costs and various indirect costs beyond the acquisition cost [14]. The specific diagram is shown in Figure 1. \begin{table}
\begin{tabular}{c c} \hline \hline
**Item** & **Value** \\ \hline Equipment type & Transformer \\ Voltage level & 110 kV \\ Operation date & 2011.12 \\ Equipment model & SSZ11-63000/110 \\ Rated capacity (MVA) & 63 \\ Arrangement & Above ground and outdoors \\ Pollution class & C \\ Insulator & Oil immersion \\ Winding configurations & Three-winding \\ Cooling method & ONAF \\ Rated voltage & 110 kV \\ Rated current & 330.7 A \\ Substation type & AIS \\ \hline \hline \end{tabular}
\end{table} 
Table 1: The specific parameters of the 110 kv transformer. The paradigm of life cycle cost management has ushered in a transformative shift in the decision-making processes of enterprises, steering away from solely prioritizing the initial investment cost of individual equipment. This approach transcends the conventional focus on one-time procurement expenses and embraces a more comprehensive perspective, accounting for the entirety of costs incurred throughout the operational lifespan of the equipment. In doing so, life cycle cost management recognizes that the true economic impact extends beyond the initial investment, encompassing a spectrum of expenses entailed during the equipment's operational tenure [20]. This nuanced consideration empowers enterprises to make more informed and sustainable procurement and selection decisions, strategically factoring in the holistic financial implications over the entire life cycle of the equipment. The best advantage from the comprehensive cost-effectiveness of the equipment is found, so that the power equipment we ultimately purchase can obtain the lowest cost option throughout the entire life cycle while meeting the availability of production and operation. Fueled by the growing emphasis on energy conservation and market development, power industry enterprises are actively advocating for the study of equipment life cycle cost. This approach aims to harmonize power demand with the judicious allocation of resources and expenses. In this study, we use transformers as an example to construct a life cycle cost measurement model. According to LCC theory, in order to clarify the cost types of the entire life cycle of assets, and achieve quantitative analysis and application of production costs, LCC calculation divides costs into five stages for calculation: initial investment, operation and maintenance, maintenance, failure, and recovery disposal costs. The specific calculation formula is as follows:  
1. Initial cost C1  
The initial investment cost of transformers is the cost expenditure before the equipment is put into operation. This article will make LCC costs more comprehensive and refined, and divide the initial investment cost into procurement and construction costs, installation and debugging costs, and other expenses. The cost estimation model is as follows [21]:  
\[C_{1}=C_{\text{ep}}+C_{\text{ic}}+C_{\text{oc}} \tag{1}\]  
where \(C_{\text{ep}}\) is the equipment purchase cost; \(C_{\text{ic}}\) is the installation and commissioning cost; and \(C_{\text{oc}}\) is other cost. The purchase cost of equipment mainly includes the bid winning price, and the installation and debugging cost mainly includes the owner's transportation cost, construction and installation cost, and debugging cost. It can usually be calculated  
Figure 1: The flow diagram of the life cycle cost management of power equipment.