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Utility-based economic assessment of distribution transformers considering

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JOURNAL OF OPTOELECTRONICS AND ADVANCED MATERIALS Vol. 10, No. 5, May 2008, p. 1184 - 1191

Utility-based economic assessment of distribution

transformers considering specific load characteristics and
environmental factors
ELEFTHERIOS I. AMOIRALIS*, PAVLOS S. GEORGILAKIS, MARINA A. TSILIa,
ATHANASSIOS T. SOUFLARISb
Department of Production Engineering & Management, Technical University of Crete, GR-73100, Chania, Greece
a
Faculty of Electrical & Computer Engineering, National Technical University of Athens, GR-15780, Athens, Greece
b
Schneider Electric AE, Elvim Plant, GR-32011, Inofyta, Viotia, Greece

Due to the large number of installed distribution transformers in power systems, there is a considerable potential for energy
savings through investment in low loss transformers. This paper investigates different methodologies for the economic
assessment of distribution transformers taking into account the detailed load characteristics that affect their life cycle cost.
The analysis is conducted from the electric utility point of view, using the total owning cost formula and introducing built-in
environmental factors.

(Received March 13, 2008; accepted May 5, 2008)

Keywords: Distribution Transformer, Energy Efficient Transformer, Cost Evaluation Model, Loss Evaluation, IEEE Standard C57.120,
Total Owning Cost, External Environmental Cost, Sensitivity Analysis

1. Introduction The TOC evaluation method has been developed as a

handy tool to reflect the unique financial environment
European Commission strategies aim at influencing faced by each electric utility (or industrial user) when
the scientific and engineering communities, policy makers purchasing distribution transformers. According to this
and key market actors to create, encourage, acquire and method, the variability of the cost of electric energy,
apply cleaner, more efficient and more sustainable energy capacity and financing costs is expressed through two
solutions for their own benefit and that of our wider evaluation factors developed according to IEEE standard
society [1]. The use of energy-efficient technologies is [6] and NEMA standard [7], called A and B factors,
becoming more important in our society because energy corresponding to the unit cost of no-load and load losses,
resources are expensive and scarce. In the context of the respectively. The method to define these two factors varies
recent global efforts for increases in energy savings, the according to the role of the transformer purchaser in the
application of the transformer Total Owning Cost (TOC) is energy market (two major categories can be considered:
common place in the electric utilities and large customers electric utilities and industrial users) and the depth of the
[2]. The TOC technique is the most widely used analysis (depending on the accuracy of the representation
transformer evaluation method for determining the cost- of the transformer loading characteristics). The industrial
effectiveness of energy-efficient transformers, providing a customers’ distribution transformer cost evaluation model
balance between cost of purchase and cost of energy is analysed in [8][9][10], while the simplified
losses. implementation of the IEEE standard on the electric utility
Transformer energy losses throughout their life cycle sector is extensively analysed in [2]. Since the load losses
increase significantly their operational costs, resulting to are directly linked to the type of the considered consumer
TOC values much higher than their purchase price. For the type and the specific details of the network at the
above reason, the decision for what transformer to transformer installation point, a number of versatile factors
purchase should not be based only on its purchase price. In should be incorporated in the TOC analysis. Such an
general, transformers with the lowest purchase price are analysis is performed in depth in [11] and [12], prior to the
also the ones with the highest TOC. Therefore, in order to development of the IEEE standard C57.120 [6], where the
choose the most economical transformer in long term, the authors propose several analytical formulas for the
TOC value during the lifespan of the transformer should economic evaluation of distribution transformers,
be taken into account [1][3][4]. Furthermore, the external incorporating details of the consumer type that they serve
environmental costs should be taken into consideration as and the system where they are connected. Recently, the
well, i.e., the costs that are associated with various types of impact of transformer environmental externalities and the
emissions resulting from the combustion of fossil fuels so contribution of losses to the greenhouse gas emissions
as to compensate for transformer losses [5]. generated by the global power generation mix has been
 Utility-based economic assessment of distribution transformers considering specific load characteristics… 1185

addressed [1][4]. Furthermore, Frau et al. [13] examine the LIC + LECN
case for using emissions credits to affect life-cycle costs of A= (2)
ET ⋅ CRF ⋅ IF
efficient distribution transformers, studying two 400 kVA
rated power distribution transformers with loss category LIC ⋅ PRF 2 ⋅ PUL2 + LECL ⋅ TLF 2
B= (3)
AA′ (as a nonefficient transformer) and loss category CC′ ET ⋅ CRF ⋅ IF
(as an efficient transformer), according to CENELEC where:
(Harmonization Document HD428: 1 S1:1992). As a LIC: the levelized annual generation and
result, ways to promote the policy to encourage the use of transmission system investment cost in U.S.
efficient transformers in the Spanish market are proposed, $/kW;
such as introducing incentives to private users and electric LECN: the levelized annual energy and operating cost
utilities, changing Spanish losses regulation, and allowing of no-load losses in U.S. $/kW;
utilities to participate in the CO2 emissions market. ET: the efficiency of transmission;
However, a methodology to quantify the impact of CRF: the capital recovery factor;
environmental externalities on transformer TOC has not IF: the increase factor (it represents the total money
yet been developed. that the user must pay to acquire the
In the present paper, the detailed implementation of transformer, including the purchase price,
the different TOC formulas proposed by IEEE standard overhead, fee, and tax);
C57.120 in conjunction to the specific consumer and PRF: the peak responsibility factor, which derives
system characteristics is presented. The goal of this work from the comparison of the transformer load
is to redefine the TOC methodology in order to properly curve to the overall load curve of the network
incorporate all of the aspects of the transformer life cycle, where it is connected;
evaluating not only the transformer losses but also the PUL: the peak per unit transformer load;
environmental externalities. For this purpose, the LECL: the levelized annual energy and operating cost
introduction of an appropriate environmental cost factor in of load losses in U.S. $/kW;
the TOC formula is proposed. The proposed method is TLF: the transformer loading factor.
applied to the economic evaluation of three-phase The equation yielding the CRF is as follows:
distribution transformers, considering different
transformer offers from different manufacturers, and the i ⋅ (1 + i ) BL
results of the proposed method are compared to the results CRF = (4)
(1 + i ) BL − 1
of the IEEE standard method [6] indicating the importance
of the introduction of built-in environmental factors.
The paper is organized as follows: Section 2 presents where i refers to the discount rate, and BL refers to the
the TOC technique based on the IEEE Standard C57.120. number of years of the transformer lifetime. Furthermore,
Section 3 describes the proposed transformer economic LECN and LECL are computed as follows:
evaluation method that introduces an appropriate
BL −1
(1 + EIR )
j
environmental cost factor in the TOC formula of the IEEE LECN = CRF ⋅ HPY ⋅ AF ⋅ ∑ CYEC ⋅ (5)
Standard C57.120. The transformer economic evaluation j =0 (1 + i ) j
results of IEEE Standard C57.120 are compared to the BL −1
(1 + EIR)
j
results of the proposed economic evaluation method in LECL = CRF ⋅ HPY ⋅ ∑ CYEC ⋅ (6)
Section 4. Sensitivity analysis of the results of Section 4 j =0 (1 + i ) j
with respect to various factors influencing the transformer
TOC are presented in Section 5. Section 6 concludes the where HPY indicates the hours of transformer operation
paper. per year (typically 8760 hours), AF represents the
transformer availability factor (i.e., the proportion of time
2. Total Owning Cost that it is predicted to be energized, which may be less than
unity due to failures), CYEC refers to the current year
The most widely used technique for the evaluation of energy cost (the cost of electricity) in U.S. $/kW and EIR
distribution transformers is the TOC method [2] that is is the energy cost inflation rate per year. Moreover, the
based on the following formula: PUL derives from the following equation:

TOC = BP + A ⋅ NLL + B ⋅ LL (1) BL −1

∑ ITL
j =0
TPL ⋅ (1 + TPLIF ) j
(7)
where TOC indicates the Total Owning Cost in U.S. $, BP PUL =
refers to the purchasing price of the distribution BL − 1
transformer in U.S. $, A indicates the equivalent no-load
loss cost rate in U.S. $/W, NLL refers to no-load loss in W, where ITLTPL and TPLIF indicate the initial transformer
B indicates the equivalent load loss cost rate in U.S. $/W, load (Transformer Peak Load) and the transformer peak
and LL refers to load loss in W. The optimum transformer load incremental factor (based on the transformer load
is the one with the minimum TOC. The A and B curve), respectively. Finally, the factor TLF is calculated
coefficients are computed as follows, [6]: by:
1186 Eleftherios I. Amoiralis, Pavlos S. Georgilakis, Marina A. Tsili, Athanassios T. Souflaris

TLF = LF ⋅ PUL2 (8) 3.2 Energy losses of the evaluated transformer

Initially, the annual energy losses corresponding to

where LF refers to the loss factor that derives from the the no-load losses of each evaluated transformer are
load factor lf, i.e., the mean transformer loading over its calculated (ENLLo in kWh/yr) by multiplying the given no-
lifetime, represented as an equivalent percentage of its
load losses (NLLo in kW) by the availability factor (AF) and
nominal power, according to the following equation: the total number of hours per year, based on the following
equation:
LF = 0.15 ⋅ l f + 0.85 ⋅ l f 2 (9)
E NLLo = NLLo ⋅ AF ⋅ HPY (10)
In a nutshell, a variety of calculations are incorporated
in the TOC formula, representing in detail the transformer Similarly, the annual energy losses corresponding to
load and the network characteristics at the point of its the load losses are calculated (ELlo in kWh/yr) by
installation. For this purpose, the detailed time multiplying the given load losses (LLo in kW) of each
characteristic of the load profile (consumer type) is used, evaluated transformer by the square of the load factor (lf)
incorporating proper coefficients for the long-term and the total number of hours per year:
prediction of the load growth.
ELLo = LLo ⋅ l f 2 ⋅ HPY (11)
3. Proposed methodology

This Section illustrates the details of the proposed The total annual energy losses (ELo in kWh/yr) of the
methodology adopted for the evaluation of the transformer evaluated transformer derive by adding the above-
Total Owing Cost so as to include the environmental cost, mentioned energy losses, using the equation:
presenting an extension of the IEEE Standard C57.120.
This paper proposes the introduction of an additional E Lo = E NLLo + E LLo (12)
component into the TOC formula, representing the
environmental costs that are associated with various types 3.3 Energy losses of the reference transformer
of emissions resulting from the combustion of fossil fuels
so as to compensate for transformer losses. The same (as in Section 3.2) procedure is followed so
as to compute the total annual energy losses of the
3.1 Reference transformer reference transformer (ELr in kWh/yr), as follows:

One important point of the proposed method is the E NLLr = NLLr ⋅ AF ⋅ HPY (13)
definition of the reference transformer that has to be part E LLr = LLr ⋅ l f 2 ⋅ HPY (14)
of the transformer specification of the electric utility, i.e., a
transformer with reference no-load losses NLLr and E Lr = E NLLr + E LLr (15)
reference load losses LLr. For any evaluated transformer
that has total energy losses less than the total energy losses where ENLLr and ELLr are the annual energy losses due to
of the reference transformer, the environmental cost is no-load and load losses, respectively, for the reference
considered negative, providing a further incentive for transformer.
transformer owners to invest to low loss designs,
otherwise, the environmental cost is considered positive. 3.4 Environmental cost coefficient
The key of computing the aforementioned environmental
cost is to find the energy losses that stem from the In this Section, a methodology for calculating
difference between the total energy losses of the evaluated greenhouse gas emissions (carbon dioxide (CO2), methane
transformer and the total energy losses of the reference (CH4), and nitrous oxide (N2O)) is applied [14] in order to
transformer. The selection of the reference transformer determine the equivalent emissions corresponding to each
losses is based on the contribution of the transformer MWh of produced energy and yield their environmental
energy losses to the total greenhouse gas emissions of the cost. The main goal is to quantify these emissions and to
generation system of the considered electric utility and represent them by an environmental cost coefficient.
their responsibility to the violation of the maximum values According to the type of fuel (i.e., coal, diesel, natural gas,
imposed by international standards or protocols wind, etc), gas emissions are converted into equivalent
concerning each country. The reference transformer must CO2 emissions (expressed in tonnes of equivalent CO2
correspond to the maximum permissible losses per kVA emissions, denoted as tCO ) in terms of their global
2

rating that do not result to violation of this limit and warming potential. In order to estimate the emission factor
imposition of environmental penalty to the electric utility. of each fuel type, the following equation is used:

(
GHGFueli = GCO2 + GCH 4 ⋅ 21 + GN 2O ⋅ 310 ⋅ ) 0.0036
n fueli ⋅ (1 − JT − D ) (16)
 Utility-based economic assessment of distribution transformers considering specific load characteristics… 1187

where GHG Fuel is the emission factor of each fuel

i
with the total annual energy losses of the reference
type in t CO / MWh , GCO is the CO2 emission factor in
2 2
transformer. In particular, if E Lr < E Lo , then the surplus of
kg/GJ, GCH is the CH4 emission factor in kg/GJ, G N O is
4 2 energy losses of each offered transformer is computed, and
the N2O emission factor in kg/GJ, JT-D represents the by multiplying this surplus with an environmental cost
transmission and distribution losses in %, and n fuel is the i coefficient C (in U.S. $/MWh, computed according to the
fuel conversion efficiency in %. The factor 0.0036 in
methodology presented in Section 3.4), the annual
equation (16) is used so as to convert kg/GJ into
tCO /MWh. It can be seen from equation (16) that CH4 and environmental cost ( Ceannual ) of each offered transformer is
2
N2O emissions are converted into equivalent CO2 found. Otherwise, if ELr ≥ ELo , the corresponding annual
emissions by multiplying their emission factors with 21
environmental cost is considered equal to - Ceannual . The
and 310 respectively (these values are provided by the
Intergovernmental Panel on Climate Change [15]). CH4 is environmental costs ( Ceannual or – Ceannual , according to the
thus 21 times more powerful a greenhouse gas than CO2, relationship between the energy losses of the evaluated
and N2O is 310 times more powerful than CO2. transformer and the reference transformer) are then
The above methodology enables the calculation of an multiplied by the factors k and m, respectively, yielding
environmental cost coefficient according to the fuel type the final positive environmental cost value (in case of
mix of the generation system of each considered network. transformers with energy losses greater than the reference
As an arithmetic example, let us consider the case of an
ones) or the negative environmental cost value (in case of
interconnected transmission system having the energy mix
transformers with energy losses less than the reference
shown in the second row of Table I. Using equation (16)
and the data of Table I, it can be easily found that the ones). Finally, in order to find the total environmental cost
equivalent CO2 emissions factor, Ceq, is equal to 0.8936 (Ce in U.S. $) during the transformer lifespan, the annual
t CO / MWh . Taking into account that the typical range of
environmental cost is multiplied by the transformer book-
2
CO2 emissions cost factor in the considered electric utility life (BL), as follows:
is between 10 and 30 $/ t CO and assuming a moderate2
value of 15 $ per t CO , the resulting environmental cost ⎧ − | ELo − ELr | ⋅k ⋅ C ⋅ BL, if ELr ≥ ELo
2
coefficient, C, is equal to 13.4 $/MWh. As a second Ce = ⎨ (17)
arithmetic example, let us consider the case of an isolated ⎩ | ELo − ELr | ⋅m ⋅ C ⋅ BL, if ELr < ELo
network (e.g., an island not interconnected to the mainland
grid), considering a fuel mix of 98.4% diesel and 1.6% It is important to note that the coefficients k and m
wind and using the rest of data (for diesel and wind) define how strong or weak the purchaser’s (i.e., the
presented in Table I yield a value of the equivalent CO2 electric utility) motivation is, in terms of investment to
emissions factor, Ceq, equal to 0.96 t CO / MWh , and energy efficient transformers. This motivation is
assuming a moderate emissions cost value of 15 $/ t CO ,
2
incorporated in the TOC evaluation method as a positive
the environmental cost coefficient, C, is found to be equal
2
or negative cost, affecting the electric utility purchasing
to 14.4 $/MWh. decision among the different manufacturer offers.
Therefore, factors k and m reflect the importance
3.5 TOC including environmental cost accredited to the environmental impact during this
decision. For instance, if k=0, then the electric utility does
The next step consists of the comparison of the total not take into account the environmental impact in the TOC
annual energy losses of each offered transformer formula and does not provide an incentive to the
manufacturer to offer transformers with energy losses less
Table 1. Calculation example of the equivalent CO2 than the energy losses of the reference transformer. On the
emissions factor, Ceq, according to the participation of contrary, if k=1, then the electric utility reinforces the
each fuel type to the total power production of an purchasing decision by a factor equal to the environmental
interconnected transmission system. cost coefficient C. Accordingly, if m=1, the TOC value
will be increased by a factor equal to the environmental
Natural cost coefficient C, affecting negatively the decision to
Fuel type Coal Diesel Hydro Wind
gas purchase from the considered transformer manufacturer.
Fuel For the sake of simplicity in the above calculations, C
69.77 7.6 7.6 15 0.03
participation (%)
has been considered constant throughout the transformer
GCO (kg/GJ)
2
94.6 74.1 0.0 56.1 0.0 lifetime.
GCH (kg/GJ) 0.002 0.002 0.0 0.003 0.0 The total environmental cost Ce is incorporated into
4
the TOC formula of equation (1), resulting in the following
G N O (kg/GJ) 0.003 0.002 0.0 0.001 0.0
2 equation:
n fuel (%)
i
35 30 100 45 100
TOCe = BP + A ⋅ NLL + B ⋅ LL + Ce (18)
J T − D (%) 8 8 8 8 8
GHG Fueli
1.069 0.975 0.0 0.491 0.0 4. Case studies
( t CO / MWh )
2

69.77 7.6 15 tCO2 This Section presents the economic evaluation of five
Ceq = ⋅1.069 + ⋅ 0.975 + ⋅ 0.491 = 0.8936
100 100 100 MWh different transformer offers provided by five different
1188 Eleftherios I. Amoiralis, Pavlos S. Georgilakis, Marina A. Tsili, Athanassios T. Souflaris

transformer manufacturers. The transformer offers concern in the case of the tourist consumer, the installation is
the purchase of a three-phase oil-immersed distribution located on an isolated island grid, where the value of
transformer, 50 Hz, 400 kVA. The characteristics of the energy cost is higher (due to the fact that the main fuel
transformer loading profile are represented in detail. type used in the considered isolated networks is diesel).
Special consideration is given to the distinction between
transformers installed in the interconnected transmission
system or in isolated networks (i.e., islands), since this Table 3. Computation of A and B coefficients of TOC
differentiation affects the loading profile, the cost of the formula for the four different consumers by applying the
methodology of IEEE Standard C57.120 presented in
produced energy, the load growth rate as well as the
Section 2.
environmental costs.
Parameter Domestic Industrial Rural Tourist
4.1 Transformer offers consumer consumer consumer consumer
CYEC
0.074 0.074 0.074 0.110
The objective is to select a three-phase oil-immersed ($/kWh)
distribution transformer, 50 Hz, 400 kVA, among five PRF 0.738 0.699 0.800 0.552
different transformer offers provided by five transformer ITLTPL 0.8 0.8 0.8 0.8
manufacturers. The technical characteristics of the five lf 0.678 0.461 0.709 0.382
different transformer offers are listed in Table II TPLIF 0.027 0.027 0.027 0.027
CRF 0.0937 0.0937 0.0937 0.0937
(Manufacturer 1 to Manufacturer 5 is denoted as M1 to LECN
M5). The calculations are based on a project life of 25 855.8 855.9 855.9 1268.0
($/kWh)
years and the loading profile of four typical electric utility LECL
consumers (domestic, industrial, rural and tourist 882.5 882.4 882.4 1307.2
($/kWh)
consumers). PUL 1.122 1.122 1.122 1.122
Table 2. Five different transformer offers for the 400 kVA TLF 0.787 0.561 0.819 0.478
distribution transformer. LF 0.492 0.250 0.534 0.181
A ($/W) 11.88 11.88 11.87 16.51
Offer Bid price Load No-load B ($/W) 7.70 4.51 8.48 4.22
($) losses (W) losses (W)
M1 17081 5020 670
M2 17529 3900 660 Fig. 1 presents the daily load curves corresponding to
M3 17835 4610 640 the four types of consumers (for the first year of the study
M4 18676 4570 600 period, expressed in per unit of the transformer rated
M5 19921 4170 510 power), which are taken into account for the calculation of
the parameters of Table III. The peak daily load curve of
the year is considered, corresponding to a winter working
4.2 Calculation of the A and B coefficients day in the case of domestic and industrial consumer, a
summer working day in the case of the rural consumer and
In this work, four types of transformer consumer are
a summer weekend day in the case of the tourist consumer.
investigated: 1) domestic, 2) industrial, 3) rural, and 4)
tourist consumer. For all the consumer types, it is assumed Fig. 1 illustrates the diversity of the considered consumer
that AF=97 %, IF=1, i=8 %, HPY = 8760 h, BL=25 years, type variation, which is reflected to the different values of
LIC=201.39 U. S. $/kW and EIR=2.7. load factors (lf), loss factors (LF) and transformer load
For the case study of the domestic consumer and factors (TLF) of Table 3.
based on its specific load characteristics, it is found that
PRF=0.738, ITLTPL=80%, lf= 0.678 and TPLIF=2.7%.
1.0
Moreover, the value of CYEC is considered equal to 0.074 domestic industrial rural tourist
U. S. $/kWh, corresponding to a typical cost of energy 0.9

production in the considered interconnected transmission 0.8

system. Using equations (4)-(9), (2) and (3), it is found 0.7
that CRF=0.0937, LECN=855.83 U. S. $/kWh,
Load (p.u.)

0.6
LECL=882.55 U. S. $/kWh, PUL=1.122, TLF=0.787, 0.5
LF=0.492, A=11.88 U. S. $/W and B=7.7 U. S. $/W, 0.4
respectively. The same procedure is followed for the rest 0.3
consumer types and Table III presents the A and B factors
0.2
for each consumer type, as well as the rest of the data used
0.1
in their calculation. As can be seen in Table III, apart the
specific load characteristics of each consumer, the value of 0.0
0 4 8 12 16 20 24
energy cost (CYEC) is equal for the first three types of time (h)
consumers (domestic, industrial and rural), which are
considered to be connected to the mainland grid Fig. 1. Typical daily load curves corresponding to the
(interconnected transmission system). On the other hand, four types of transformer consumers.
 Utility-based economic assessment of distribution transformers considering specific load characteristics… 1189

4.3 TOC results without the environmental cost order to maintain the total greenhouse gas emissions of the
considered electric utility system below the imposed
Table IV presents the TOC results for the 5 different national limit. The values were calculated based on the
offers of Table II, without the introduction of the total number of installed 400 kVA transformers in the
environmental cost, based on the A and B coefficients of utility network and their overall contribution to the total
Table III and the bid price as well as the losses of each
energy losses of this network. In the case of the tourist
transformer offer (Table II).
consumer, the reference values are equal to NLLr=570W
Table 4. Electric utility-based TOC without and LLr=4320W.
environmental cost for all consumer types.

Table 5. Electric utility-based TOCe with environmental

TOC without environmental cost ($) cost for all consumer types, using k=1 and m=1.
Offer Domestic Industrial Rural Tourist
consumer consumer consumer consumer TOC with environmental cost ($)
M1 63674 47674 67618 49328 Offer Domestic Industrial Rural Tourist
M2 55384 42954 58448 44884 consumer consumer consumer consumer
M3 60916 46223 64538 47856
M4 60974 46408 64564 47868
M1 64657 48251 68672 49913
M5 58071 44781 61347 45939 M2 54827 42804 57821 44961
M3 61260 46459 64901 48180
Despite the fact that the transformer offered by M1 is M4 61151 46505 64755 48060
M5 57452 44372 60692 45704
the cheapest one concerning the bid price (as can be seen
from the second column of Table II), Table IV shows that,
in long term, the transformer offered by M1 is the worst As can be observed in the results of Table V, the offer
investment since it has the highest total owning cost and of M2 remains the most profitable one. Due to the
this result exists for the four different consumer types. In introduction of the environmental cost, the difference
contrast, it is clear that the transformer offer of M2 is the between the rest of the offers is now higher, resulting to
best investment in long term, in all cases of the considered values up to 15.8% (difference in the TOCe value between
consumers, since it has the lowest total owning cost. The M1 and M2, in the case of the rural consumer, Table V).
domestic and rural consumers correspond to relatively The respective maximum difference in the case of
higher TOC values in Table IV, compared to the other transformer evaluation without environmental cost is
consumers, due to their higher load factor. The comparison 13.6% (difference in the TOC value between M1 and M2,
of the results appearing in Table IV illustrates the in the case of the rural consumer, Table IV).
importance of the detailed representation of the consumer Table VI and Table VII present the results for the
characteristics to the accurate evaluation of the total TOCe including environmental factors for different k and
owning cost: although the selection of M2 is verified in all m values, namely k=1 and m=0.6, and k=0 and m=1,
cases, a difference of up to 16656 U. S. $ in the TOC value respectively. In both cases, the difference between the
of transformers of the same loss category, according to the TOCe of M2 and the TOCe of other offers is now lower
consumer category can be observed, which is quite than the one of Table V, due to the decrease of the
considerable in case of investments for purchasing environmental cost penalty (through the decrease of factor
numerous distribution transformers by the same electric m in the calculations of Table VI) or the reduction of the
utility. environmental reward of low loss transformer offers
(through the reduction of factor k in the calculations of
4.4 TOC results with the environmental cost
Table VII).
Table V presents the TOCe results for the 5 different
offers of Table II, with the introduction of the Table 6. Electric utility-based TOCe with environmental
environmental cost, based on the A and B coefficients of cost for all consumer types, using k=1 and m=0.6.
the Table III, the coefficient C (C=13.4 $/MWh for
domestic, industrial and rural consumer, while C=14.4 TOC with environmental cost ($)
$/MWh for the tourist consumer, as calculated in Section Offer Domestic Industrial Rural Tourist
3.4) as well as k and m equal to 1. consumer consumer consumer consumer
For the calculation of environmental costs, a reference M1 64264 48020 68250 49679
transformer with NLLr=590W and LLr=4460W is selected, M2 54827 42804 57821 44930
M3 61123 46364 64756 48050
in the case of the three first consumer types, located in the
M4 61080 46466 64678 47983
interconnected utility grid. These values correspond to the M5 57452 44372 60692 45704
maximum permissible losses of a 400 kVA transformer in
1190 Eleftherios I. Amoiralis, Pavlos S. Georgilakis, Marina A. Tsili, Athanassios T. Souflaris

Table 7. Electric utility-based TOCe with environmental cost for Fig. 2 shows the sensitivity of the TOCe to percent
all consumer type, using k=0 and m=1. deviation changes in each parameter’s best estimate. The
other parameters are assumed to remain at their best
TOC with environmental cost ($) estimate values. The relative degree of sensitivity of the
Offer Domestic Industrial Rural Tourist TOCe to each parameter is indicated by the slope of the
consumer consumer consumer consumer curves (the steeper the slope of a curve, the more sensitive
M1 64657 48251 68672 49913 the TOCe is to the parameter) [16]. Based on this, as can be
M2 55384 42954 58448 44961 observed from Fig. 2, the TOCe is for all practical purposes
M3 61260 46459 64901 48180 insensitive to environmental cost coefficient (C) and the
M4 61151 46505 64755 48060 coefficient k, but quite sensitive to changes in the discount
M5 58071 44781 61347 45939 rate (i), the cost of electricity (CYEC), the number of years
of the transformer lifetime (BL), and the cost of installing
transmission systems (LIC).
5. Sensitivity analysis
15 k
In the TOC economic analysis, it is helpful to i
determine how sensitive the TOCe is to several factors of 10 CYEC
concern so that proper consideration may be given to them LIC
in the decision process. The parameters that are selected C

TOCe variation (%)

5
are: the discount rate (i), the cost of electricity (CYEC), the BL

levelized annual generation and transmission system 0

investment cost (LIC), the environmental cost coefficient -20 -10 0 10 20 30
(C), the coefficient k from equation (17), and the number of -5
years of the transformer lifetime (BL). These parameters
consist the most versatile factors in the equations yielding -10
the A, B and Ce factors of the TOCe calculation (from the
point of view of the electric utility, which is faced with an -15
Components variation (%)
increased uncertainty in the transformer economic
evaluation process, especially during the incorporation of Fig. 2. Sensitivity graph of six parameters.
environmental externalities). Before we start vary the
above-mentioned parameters, we should develop a base
case of TOCe, i.e., TOCe equal to 54827 U.S. $ (Table V – 7. Conclusion
(Domestic consumer) M2), which corresponds to k=1, m=1,
i=8 %, CYEC=0.074 U.S. $/kWh, LIC= 201.43 U.S. $/kW, In the present paper, the electric utility-based
and C=13.4 U.S. $/MWh. Table VIII and Fig. 2 present the economic assessment of distribution transformers, taking
sensitivity parameter analysis results, based on various into account their specific loading characteristics, the
parameter values. For example, by changing + 10% the power system parameters and the environmental impact of
discount rate (parameter i), the TOCe changes -3.66% in losses was presented. The analysis was based on the
comparison with the TOCe of the base case. guidelines provided by the IEEE Standard C57.120,
introducing the incorporation of environmental costs to the
TOC formula, yielding the TOCe formula. The method was
Table 8. Sensitivity parameter analysis. TOCe variation employed for the economic evaluation of a 400kVA three-
based on varying parameters values. phase oil-immersed distribution transformer, serving
different kind of consumers, installed either on an
Parameters TOCe variation (%) when varying parameter i to BL interconnected transmission system or an isolated network.
variation The results of the calculations indicated that the
(%) i CYEC LIC C k BL
incorporation of specific consumer and system
-20 8.72 -11.06 -2.75 0.20 0.2 -12.86
characteristics results to significant differences in the TOC
-15 6.34 -8.29 -2.06 0.15 0.15 -10.38 values, which must be taken into account by electric
-10 4.1 -5.53 -1.38 0.10 0.1 -7.86
utilities. The introduction of environmental costs is quite
substantial, as it reinforces the optimal transformer choice,
-5 1.99 -2.76 -0.69 0.05 0.05 -2.65 resulting to more significant difference in the TOCe values,
5 -1.88 2.76 0.69 -0.05 0.05 1.03 compared to the values based on the classical TOC
formula. Finally, sensitivity analysis was conducted so as
10 -3.66 5.53 1.38 -0.10 0.10 2.97
to investigate the impact of the TOCe parameters variation
15 -5.34 8.29 2.06 -0.15 0.15 3.85 in the final purchasing decision. According to this
20 -6.93 11.06 2.75 -0.20 0.20 4.68 analysis, the TOCe variation is quite sensitive to changes
in the discount rate and the estimated cost of energy, while
Minimum -6.93 -11.06 -2.75 -0.2 0.05 -12.86 changes in the transmission and generation system
Maximum 8.72 11.06 2.75 0.2 0.2 4.68 investment cost and the transformer lifetime duration
 Utility-based economic assessment of distribution transformers considering specific load characteristics… 1191

affect it less. On the other hand, TOCe remains practically [6] ANSI/IEEE Standard C57.120, “Loss Evaluation
stable in variation of in the environmental cost factor. Guide for Power Transformers and Reactors,” 1992.
[7] NEMA Standard, “Guide for Determining Energy
Efficiency for Distribution Transformers,” TP
Acknowledgment 1-2002.
[8] S. Merritt, S. Chaitkin, “No Load versus Load Loss,”
This paper is part of the 03ED045 research project IEEE Industry Applications Magazine, pp. 21-28,
that is co-financed by E.U.-European Social Fund (75%) Nov. 2003.
and the Greek Ministry of Development-GSRT (25%). [9] W. T. J. Hulshorst and J. F. Groeman, Energy Saving
in Industrial Distribution Transformers, KEMA
report, May 2002.
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*
Research, Brussels, Study 20198, 2003. Corresponding author: eamir@tee.gr

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