The Department of Energy (DOE) published its final ruling on congressionally mandated energy-efficiency standards for distribution transformers, intended to increase resiliency and efficiency along the power grid. The new ruling attempts to straddle the goal of making the power grid more resilient while simultaneously addressing concerns regarding stringent emissions requirements and a tight timeline to comply with new regulations.
In a compromise, industry representatives and the Biden administration reduced the amount of amorphous steel required to compose transformer cores from 95% to 75% and extended compliance deadlines for manufacturers from three years to five.
When implemented, these new standards are predicted to save more than $14 billion in annual energy costs, reduce about 85 million metric tons of carbon dioxide emissions (equivalent to the combined annual emissions of 18 million gas-powered cars, 22 coal-fired power plants or 10.5 million homes over 30 years), and cut wasted energy on the power grid through improved efficiencies.
The new standards are also expected to create more demand for core materials such as grain-oriented electrical steel (GOES), most of which will be manufactured in the United States. A small portion of the market will be supplied with amorphous alloy, which is also expected to be manufactured in the United States.
Amorphous steel relies on an ultra-thin metal. Not only is it more efficient than GOES, but it also provides distribution cores with more capacity. However, despite increased investment in new amorphous alloy and electrical steel manufacturing facilities, the U.S. currently has only three suppliers producing these materials, thus resulting in most distribution transformer cores made up of GOES.
Nevertheless, relying on the existing domestic supply of materials can increase resiliency and preserve steel union manufacturing jobs. GOES production will take advantage of a DOE $75 million grant that is part of Biden’s Investing in America agenda. With U.S. GOES among the lowest-emissions GOES worldwide, this move also strengthens Biden’s climate-focused goals.
“Today’s actions reflect DOE’s deep commitment to developing forward-looking solutions that align with President Biden’s industrial policy goals, including creating good-paying jobs, strengthening domestic manufacturing, and helping American workers capture the economic benefits of our clean energy economy,” said U.S. Secretary of Energy Jennifer M. Granholm. “Ultimately, it will be a piece of the solution, rather than a barrier, to help resolve the ongoing distribution transformer shortage and keep America’s businesses and workers competitive.”
A study by the National Renewable Energy Laboratory predicts that distribution transformer installations will triple by 2050. Some industry groups believe the final standards will keep markets stable by granting a gradual shift, balancing supply chain issues due to increased installations with energy-efficiency goals.
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Lori Lovely is an award-winning writer and editor in central Indiana. She writes on technical topics, heavy equipment, automotive, motorsports, energy, water and wastewater, animals, real estate, home improvement, gardening and more. Reach her at: [email protected]