- Finalizing stricter energy efficiency requirements for distribution system transformers could threaten grid reliability if the U.S. Department of Energy moves too quickly, utilities warned in comments filed Monday. DOE proposed new standards for the transformers in December, to go into effect in 2027.
- The problem, warned the Edison Electric Institute, is DOE’s plan would essentially require new liquid-immersed distribution transformers to use amorphous core steel — and the U.S. does not currently produce enough of that type of steel, making replacements hard to come by. “Improved transformer efficiency is important but cannot come at the expense of reliability,” wrote EEI, the trade group for U.S. investor-owned utilities.
- Efficiency advocates say DOE’s proposal is achievable and would cut energy waste by up to 50%, relative to most current transformer models. And the nation’s sole producer of amorphous steel cores, South Carolina-based Metglas, told DOE it is bringing on additional production capacity and can meet increasing demand for its product.
The lead times for new distribution system transformers can exceed two years, a problem that has been getting more attention in recent months as the situation worsened.
In November, a broad coalition representing the electric sector warned a shortage of distribution system transformers was depleting replacement stockpiles and slowing electrification goals. Procurement times, utilities said, had risen to more than a year, up from about three months in 2020.
U.S. senators discussed the issue last week in a hearing on grid security, pointing to labor and mineral shortages as the issue.
“These products were available within eight to 12 weeks just a few years ago,” said Sen. Joe Manchin, D-W.Va. “I don’t know what the hell happened to the production line.”
DOE’s new proposed efficiency standards could exacerbate the issue or solve it, depending on whom you ask.
The agency’s proposal would functionally require new distribution transformers use amorphous core steel, EEI said.
“However, at the present time, most transformers do not use amorphous core steel and the shift that DOE expects to its production has not yet occurred, meaning that access currently — and in the next several years — to transformers that would comply with the proposed standards is constrained,” EEI said.
The group offered two alternatives to finalizing the rule: DOE should either adopt a lower trial standard energy efficiency level that does not require a full move to amorphous steel or determine no new standard is needed.
“In the interim period, and under either scenario, the department should take decisive action to build critical domestic supply chain capacity now by investing significant funding to build up domestic supply chains and steel production capabilities,” EEI said.
Comments filed by the National Rural Electric Cooperative Association echoed these themes.
“If this proposal is implemented as currently contemplated, it would have serious consequences to NRECA members’ ability to provide affordable, reliable electric service to millions of Americans,” the group said. “We urge the agency to ... issue a final rule that maintains the current standard.”
Efficiency advocates, including the American Council for an Energy-Efficient Economy, say the new rule could actually help address the shortage in distribution transformers. Most use grain-oriented electrical steel, or GOES.
“There is available capacity to produce amorphous steel in the U.S.,” the groups said. “One way to resolve supply
constraints on GOES in the near term is to accelerate current transformer designs to utilize amorphous steel.”
Advocates say the proposed standards will give utilities more options, allowing GOES and amorphous steel technologies to be available in the marketplace.
“Additionally, adding capacity to amorphous production is relatively fast and inexpensive compared to adding GOES capacity in the U.S.,” they said.
The coalition includes the Environmental Defense Fund, Natural Resources Defense Council, U.S. PIRG and others.
Indeed, steel producer Metglas told DOE it is “bringing on additional capacity of amorphous steel to meet this demand. The footprint of an amorphous steel production line relatively is small and can be commissioned quickly.”
Metglas has a “single-digit” share of the domestic distribution transformer market, Rob Reed, president and chief operating officer, told Utility Dive in February, but could quickly scale to more than 20%. The company has sold its transformer cores in China, India and Canada.
However Cleveland-Cliffs, the sole producer of GOES for distribution transformers in North America, warned DOE that scaling up new steel production would not be so easy.
The company said it has “significant concerns with the proposed rule ... [which] will weaken domestic supply chains and increase the country’s dependence on imported materials for transformers and related inputs critical to electric grid operations and energy transition efforts.”
DOE’s proposal is “not technologically feasible because it establishes an unrealistic implementation timeline,” Cleveland-Cliffs said. The timeline “is entirely too short ... [and] does not account for the fact that market demand for electricity will significantly increase in the coming years, particularly as EVs gain a greater foothold in the marketplace.”