Conway, S.C.-based Metglas Inc. is the sole U.S. producer of a nontraditional steel called amorphous metal to form the cores of distribution transformers—the equipment that transfers power from high-voltage transmission lines to residential and business lines.

Amorphous metal allows electrons to move freely, unlike other metals that route electrons on specific paths. Metglas currently produces 18,500 tons of it per year, with plans to double capacity.

According to a 2020 report from the Bonneville Power Administration, a federal agency that provides hydropower to residents in the Northwest, amorphous cores are a “mature and proven technology” that is “widely used” in many parts of the world.

Some transformer producers, such as Howard Power Solutions, Laurel, Miss., use amorphous steel cores, claiming they capture and transmit more electricity than other transformers, which saves energy. In a fact sheet about the technology, the company states, “Amorphous core transformers can lower core loss by 60%–70% compared to transformers made with conventional cores, resulting in cost avoidance from reduced generation and deferral of generation and transmission capacity expansions.”

Metglas’ president and COO Rob Reed believes the amorphous cores waste less electricity and are more environmentally friendly than cores produced by the traditional steel industry. He also thinks it’s the solution to the ongoing transformer shortage—particularly now, when equipment is needed to expand the electric grid.

Many of the legacy steel companies disagree, arguing that this technology could add to supply chain woes and delay the Biden administration’s electrification campaign.

A Department of Energy-proposed regulation could force transformer producers to use amorphous cores. The DOE believes this efficiency proposal will benefit efforts to address climate change, but in Senate testimony, David Tudor, CEO and general manager of power supplier Associated Electric Cooperative Inc., disputed that idea, claiming that it would slow down expansion and maintenance of the electric grid.

Others, including the American Public Power Association and the National Rural Electric Cooperative Association, have urged DOE to shelve or scale back the regulation, fearing supply chain issues and risks to the grid associated with a shift to cleaner energy.

This year, DOE issued $10 million in rebates for replacement of inefficient transformers with more efficient ones, and the Biden administration has urged Congress to appropriate $250 million for transformer production. The DOE considers efficiency targets “primarily achievable by using amorphous steel,” but has not implemented a mandate.

However, groups like the North American Electric Reliability Corp. have expressed concern that new efficiency regulations would discourage traditional steel production and jeopardize availability to build transformer cores.

Currently, 95% of transformer cores in the United States use traditional steel imported and produced domestically by Cleveland-Cliffs Inc., Cleveland, with a one-year lead time. Cleveland-Cliffs produced 250,000 tons of electrical steel in 2022.

The DOE is required by consent decree to finalize regulations by June 2024, with rules going into effect in 2027. If the proposal is finalized, it’s expected to avert 256 million metric tons of carbon dioxide and 1,847 million tons of methane.

Despite his concern about the timing, Scott Aaronson, senior vice president of security and preparedness at the Edison Electric Institute, said amorphous steel “is where the market is going.”