North America | April 5, 2024

US: Restrictions on distribution transformers

Energy efficiency gains will be achieved with 75% of the transformers on the market being manufactured with grain-oriented electrical steel (GOES) and another 25% with amorphous alloy.

 

USA, Washington: The Biden administration finalized energy efficiency regulations for distribution transformers. The Department of Energy said the regulations would help accelerate the development of green energy nationwide and form part of the Biden administration’s “commitment to tackling the climate crisis.” Requiring more efficient transformers could save utilities and businesses $824 million a year.

“These standards are going to make America’s power grid more resilient,” Energy Secretary Jennifer Granholm said. “They’ll support good-paying, high-quality manufacturing jobs, and they’ll help us deploy more affordable and reliable and clean electricity more quickly across the country.”

She added that this could provide long-term certainty for domestic manufacturing and production investments, and position American producers and workers to capture an evolving and growing market. According to her, the new standards could slash 85 million metric tons of CO2.

Under DOE’s regulations, energy efficiency gains will be achieved with 75% of the transformers on the market being manufactured with grain-oriented electrical steel (GOES) and another 25% with amorphous alloy, with manufacturers given five years to ensure compliance. The standards require transformers to be more energy efficient and are a scaled-down version of the original, widely criticized, proposal from January 2023, under which 95% of distribution transformers would have been required to be made with amorphous alloy and manufacturers would have three years to comply.

That proposal led to bipartisan legislation by Sens. Sherrod Brown, D-Ohio, and Ted Cruz, R-Texas, requiring DOE to issue standards at levels that preserve market opportunities for transformer manufacturers. GOES represents over 95% of the domestic distribution transformer market and the country has just one small producer of amorphous steel, relying on foreign materials with a market share of less than 5%. Thus, ramping up reliance on amorphous steel could make the grid vulnerable.

Louis Finkel, the senior vice president of government relations for the National Rural Electric Cooperative Association (NRECA), said that the standards provide stability for most of the market and afford a gradual shift towards tighter efficiency standards for transformers.

Distribution transformers are essential for the grid and will remain in higher demand due to the deterioration of existing infrastructure and demand increase. The National Renewable Energy Laboratory said that distribution transformer installations will need to triple by 2050. In North America, AK Steel is the sole producer of GOES, manufacturing the product in Butler, Pennsylvania. It is then finished at a facility in Zanesville, Ohio.

Source: Fox News