Proposed DOE Transformer Efficiency Standards Are Too Low

Energy efficiency, environmental and consumer groups strongly criticize the U.S. Department of Energy's proposed new energy efficiency standards for distribution transformers - the metal boxes mounted on utility poles or installed in buildings - because they deprive power consumers of billions of dollars in potential energy savings and millions of tons of harmful pollution reductions by favoring old transformer designs over innovative U.S.-made energy-efficient technologies.
 
“Last week, President Obama called for an American economy 'built to last,' said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy. “Unfortunately, the Department of Energy has proposed new distribution transformer standards built on last-century technology rather than provide a path towards use of new advanced technology that was invented in the U.S. but is now mostly exported to Asia.”
 
According to DOE's analysis, the proposed weak standards for utility transformers will save about 50 terawatt hours (TWh) and net consumers about $3.7 billion over 30 years. But the largest manufacturers of utility transformers suggested significantly stronger standards in DOE-sponsored public negotiations last year that would have quadrupled savings to nearly 200 terawatt hours and $14 billion net savings for consumers over 30 years. Some manufacturers of building transformers also proposed higher efficiency standards, which would have significantly increased savings from these products as well.
 
“What's most surprising is that DOE's proposal falls short of efficiency levels proposed by some of the largest transformer manufacturers,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project, a coalition of consumer, environmental and efficiency groups. “Just increasing the standards to levels which major manufacturers have described as acceptable would significantly increase benefits for consumers and the environment.”
 
The DOE's proposed standards cover two basic types of electric distribution transformers: liquid-immersed transformers like the round cans seen hanging from utility poles or square metal boxes on concrete pads in residential subdivisions, and low-voltage dry-type transformers that are installed in new buildings.
 
“The cost of energy wasted by inefficient transformers is spread over all consumers' utility bills,” said Charlie Harak of the National Consumer Law Center. “For low-income consumers, these utility bills take a disproportionate bite out of their pocketbooks, so for them, it's especially important to reduce transformer energy waste.”
 
DOE rejected higher standards for utility transformers for fear of supply availability and price increases of amorphous metal, a core material that makes transformers more energy-efficient. Although amorphous metal is manufactured in South Carolina, most of it is currently exported to India and China. During last year's negotiations, major transformer manufacturers expressed confidence that amorphous metal and traditional silicon steel would vigorously compete for market share at efficiency levels above DOE's weak proposal.
 
“If DOE is going to make a decision to forego billions of dollars in consumer benefits based on an unsubstantiated fear about the supply and pricing of core materials, it really must first analyze the competitive impact that those higher standards create, and determine that the fear is justified,” said Robin Roy, director of Building Energy and Clean Energy Strategy at the Natural Resources Defense Council. “The biggest manufacturers, who stand to lose the most if they can't acquire materials at a fair price, said they don't share DOE's fear, so DOE needs to re-think these standards.”
 
DOE estimates that the higher standards for liquid-immersed transformers would reduce polluting emissions by about four times more than DOE's weak proposed standards. At the higher levels, CO2 emissions would be cut by 113 million metric tons (an amount equal to the annual emissions of 28 coal-fired power plants), nitrogen oxides by 93,000 metric tons and toxic mercury by about a half ton.
 
“Saving money and reducing pollution at the same time is usually a no-brainer,” said Tim Ballo of Earthjustice. “We hope that DOE will come to their senses and strengthen this critical standard.”
 
Under the terms of a court settlement, a final standard is required in October.