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Abstract—The goal of this article is to encourage electric utilities and technical performance) for both utilities and their
and potential investors to purchase and install high-efficiency customers [1][2].
distribution transformers where they are cost-effective. This
paper proposes a methodology that implements the complex Many electrical distribution utilities claim that they
economic analyses needed to accurately determine the emission- purchase distribution transformers using some type of loss
reduction potential of high-efficiency distribution transformers. evaluation procedure. Over the past 25 years, these purchasing
This methodology properly introduces the environmental cost practices have been established, as the utilities have apparently
into the life cycle cost (total owning cost) calculations become aware of the range and the value of distribution
implemented by electric utilities, and its results are compared to transformer losses [3]. On the other hand, very few industrial
the classical total owning cost (without environmental cost), and commercial customers include evaluation of distribution
indicating the importance of environmental aspects of transformer losses in the purchasing process [4][5]. References
transformer economy evaluation, which may affect significantly [6][7] proposed an evaluation technique from the industrial and
the currently-employed transformer purchasing policy in the commercial customers’ point of view. Moreover, the expected
near future. Moreover, a sensitivity analysis of the various factors large increases in energy demand and the need to undertake
involved in the transformer life cycle cost is implemented, factors effective measures to protect the environment could be partially
such as the transformer loading profile, the specific solved by improvements in energy efficiency of distribution
characteristics of the network where the transformer is installed
transformers. Optimized distribution transformers (cost-
and the uncertainty of the environmental cost impact on the final
effective and highly efficient designs) would provide numerous
energy cost.
global benefits to the wider public as well as local benefits to
Keywords-component; distribution transformers; Total Owning electrical distribution companies, their customers and other
Cost; environmental externalities; sensitivity analysis; users of distribution transformers [8][9][10].
The origin of this work lies in the fact that nowadays there
I. INTRODUCTION is an increased interest in the protection of the environment
The distribution transformer is the most important single from greenhouse gas emissions. In addition, green certificates
piece of electrical equipment installed in electrical distribution markets are in operation in various electricity markets all over
networks with a large impact on the network’s overall cost, the world. For an electric utility (Distribution Company) that
efficiency and reliability. Selection and acquisition of has numerous distribution transformers in its network, there is
distribution transformers which are optimized for a particular an opportunity to install high efficient distribution transformers
distribution network, the utility’s investment strategy, the that have less total energy losses than less efficient
network’s maintenance policies and local service and loading transformers, so they pollute the environment less. Bearing all
conditions will provide definite benefits (improved financial these into mind, the goal of this work is to redefine the Total
Owning Cost (TOC) method to properly incorporate all the
aspects of the transformer life cycle, evaluating not only the
transformer losses but also the environmental externalities. i (1 i ) BL
Moreover, the paper deals with current economic evaluation CRF
practices adopted by electrical utilities and (1 i ) BL 1
industrial/commercial customers in selecting distribution where i refers to discount rate, and BL refers to the number of
transformers. To compare and assess these practices, proper years of the transformer lifetime.
analysis tools are proposed, taking into account environmental
economics into the TOC equation. Further special B. Methodology for the calculation of the proposed
characteristics embedded in the proposed analysis reinforce its
environmental cost coefficient
robustness and novelty, compared to other approaches
proposed in the relevant literature. Additional factors which Pollution resulting from electricity generation can be
incorporate the reliability cost associated with the loss of load broadly categorized as having local, regional, and global
probability due to transformer failures are also included into environmental consequences. Regional and global impacts are
the TOC formula. Section II clearly illustrates the proposed caused primarily by the emission of atmospheric pollutants that
method for the calculation of the environmental cost as well as have longer residence times, causing dispersal over large areas.
the TOC with and without the environmental cost. Section III Most important among these gases is CO2, which is a
shows the different way that the economic evaluation is carried greenhouse gas and can contribute to global warming [12].
out for commercial/industrial transformer users. Section IV is Each kWh has an external cost, i.e. the environmental and
dedicated to results and discussion. Section V presents health costs to society that are not fully reflected in the price of
sensitivity analysis results when varying various parameters electricity. These externalities originate in the various types of
involved in the TOC formula. Section VI concludes the paper. emissions resulting from the combustion of fossil fuel. In this
Section, a methodology for calculating greenhouse gas
II. ECONOMIC EVALUATION METHOD FOR ELECTRIC emissions (carbon dioxide (CO2), methane (CH4), and nitrous
UTILITIES oxide (N2O)) is applied [13] in order to determine the
equivalent emissions corresponding to each MWh of produced
A. Total Owning Cost technique energy and yield their environmental cost. These pollutants
The most widely used technique for the evaluation of have become a major concern for most European countries.
distribution transformers is the TOC method [11] that is based Therefore, the main goal is to measure these emissions and to
on the following formula: illustrate them by an environmental cost coefficient, i.e. a
penalty value that will be added to the electricity cost. It may
be noted that, although the above environmental costs depend
TOC BP A NLL B LL on the generation technology and are not directly linked to
distribution transformers, transformer owners should assume
where TOC indicates the Total Owning Cost in €, BP refers to these costs as transformer losses correspond to a surplus of
the purchasing price of the distribution transformer in €, A energy that must be produced by the existing generation mix of
indicates the equivalent no-load loss cost rate in €/W, NLL the power system where they are connected. According to the
refers to no-load loss in W, B indicates the equivalent load loss type of fuel (i.e. coal, diesel, natural gas, wind etc), gas
cost rate in €/W, and LL refers to load loss in W. The optimum emissions are converted into equivalent CO2 emissions
transformer is the one with the minimum TOC. The A and B (measured in t CO , i.e. tonnes of equivalent CO2 emissions) in
2
coefficients are computed as follows: terms of their global warming potential. In order to estimate the
emission factor of each fuel type, the following equation is
LIC EL AF HPY used:
A
CRF
LIC EL LF HPY
GHGFueli GCO 2
GCH 4 21 GN 2O 310 0.0036
n fueli (1 JT D )
B
CRF
where GHG Fuel is the emission factor of each fuel type in
where LIC indicates the levelized annual generation and i
transmission system investment cost in €/W, EL refers to the t CO / MWh , GCO is the CO2 emission factor in kg/GJ, GCH is
2 2 4
cost of electricity in €/kWh, AF represents the transformer the CH4 emission factor in kg/GJ, G N O is the N2O emission 2
availability factor (i.e. the proportion of time that it is predicted factor in kg/GJ, JT-D represents the transmission and
to be energized, which may be less than unity due to failures),
distribution losses in %, and n fuel is the fuel conversion
HPY indicates the hours of operation per year (typically 8760 i
hours), CRF refers to the capital recovery factor, and LF refers efficiency in %. The factor 0.0036 in equation (6) is used so as
to the loss factor that derives from the load factor lf (i.e. the to convert kg/GJ into t/MWh. It can be seen from equation (6)
mean transformer loading over its lifetime, represented as an that CH4 and N2O emissions are converted into equivalent CO2
equivalent percentage of its nominal power) as follows: emissions by multiplying their emission factors with 21 and
310 respectively (theses values are provided by the
Intergovernmental Panel on Climate Change). CH4 is thus 21
LF 0.15 l f 0.85 l f 2
times more powerful a greenhouse gas than CO2, and N2O is
The equation yielding the CRF is as follows: 310 times more powerful than CO2. Taking into consideration
equation (6) and the participation percentage of each fuel type ELLo LLo l f 2 HPY
for the electric utility system of Table I, the equivalent tonnes
of CO2 emissions per year is 0.8936 t CO / MWh (Ceq) for this
2
The total annual energy losses (ELo in kWh/yr) of the given
specific electric utility. The typical range of CO2 emissions cost transformer are reached by adding the above-mentioned energy
factor in the considered electric utility is between 8 and 20 losses, using the equation:
€/ t CO . Assuming a moderate value of 10 € per t CO , the
2 2
E Lo E NLLo E LLo
resulting environmental cost coefficient, C, is equal to 8.936
€/MWh. The same procedure is followed so as to compute the total
annual energy losses of the reference transformer (ELr in
TABLE I. CALCULATION EXAMPLE OF THE EQUIVALENT CO2 EMISSION kWh/yr), as follows:
FACTOR C eq ACCORDING TO THE PARTICIPATION OF EACH FUEL TYPE TO THE
TOTAL POWER PRODUCTION OF AN ELECTRIC UTILITY SYSTEM. E NLLr NLLr AF HPY
Natural
Fuel type Coal Diesel Hydro Wind
gas
E LLr LLr l f 2 HPY
Fuel participation (%) 69.77 7.6 7.6 15 0.03
GCO2 (kg/GJ) 94.6 74.1 0.0 56.1 0.0 E Lr E NLLr E LLr
GCH 4 (kg/GJ) 0.002 0.002 0.0 0.003 0.0
where ENLLr and ELLr are the annual energy losses due to no-
G N 2O (kg/GJ) 0.003 0.002 0.0 0.001 0.0 load losses and load losses, respectively, for the reference
n fuel (%) 35 30 100 45 100
transformer.
i
J T D (%) 8 8 8 8 8 The next step consists of the comparison of the total annual
energy losses of each offered transformer with the total annual
GHG Fuel ( t CO2 / MWh )
i
1.069 0.975 0.0 0.491 0.0 energy losses of the reference transformer. In particular, if
69.77 7.6 15 tCO2 E Lr E Lo , then the surplus of energy losses of each offered
Ceq 1.069 0.975 0.491 0.8936
100 100 100 MWh transformer is computed, and by multiplying this surplus with
the environmental cost coefficient C (calculated in Section
C. Proposed TOC methodology including environmental cost II.B), the annual environmental cost of each offered
In this Section, a methodology for the calculation of the transformer is found. Otherwise, if ELr t ELo , then the
environmental cost is proposed. Afterwards, the environmental corresponding annual environmental cost is considered
cost is incorporated into the TOC formula. The main aspect of negative, providing a further incentive for transformer owners
this methodology is to quantify the penalties associated to to invest to low loss designs. Finally, in order to find the total
emissions due to transformer losses, overcoming the difficulty environmental cost (Ce in €) during the transformer lifespan,
to define the exact contribution of each transformer to these the annual environmental cost is multiplied by the transformer
emissions. For that purpose, a reference transformer is selected, book-life (BL), as follows:
i.e. a transformer with reference no-load losses NLLr and
reference load losses LLr. For any given transformer that has | ELo ELr | C BL, if ELr t ELo
total energy losses less than the total energy losses of the Ce ®
reference transformer, there is no environmental penalty, ¯ | ELo ELr | C BL, if ELr ELo
otherwise, an environmental cost is calculated. The key of
For the sake of simplicity in the above calculations, C has
computing the aforementioned environmental cost is to find the
been considered constant throughout the transformer lifetime.
energy losses that stem from the difference between the total
energy losses of the given transformer and the total energy The total environmental cost is incorporated into the TOC
losses of the reference transformer. formula of equation (1), resulting in the following equation:
Initially, the annual energy losses corresponding to the no-
load losses of each given transformer are calculated (ENLLo in TOC e BP A NLL B LL Ce
kWh/yr) by multiplying the given no-load losses (NLLo in kW)
by the availability factor (AF) and the total number of hours per
year, based on the following equation: 1) Example: It is given that AF=1, lf=0.5, NLLr=300 W,
NLLo=431 W, LLr=2000 W, LLo=2284 W, C=8.936 €/MWh.
E NLLo NLLo AF HPY Using equations (7) to (12) we obtain ENLLo=3775.56 kWh/yr,
ELLo=5001.96 kWh/yr, ELo=8777.52 kWh/yr, ENLLr=2628
Similarly, the annual energy losses corresponding to the kWh/yr, ELLr=4380 kWh/yr, ELr=7008 kWh/yr. Next, equation
load losses are calculated (ELLo in kWh/yr) by multiplying the (13) gives that the total environmental cost for the examinant
given load losses (LLo in kW) of each given transformer by the distribution transformer during its lifespan is Ce=395.31 €.
load factor (lf) and the total number of hours per year:
III. ECONOMIC EVALUATION METHOD FOR INDUSTRIAL B=3.1 €/W. Then, Table III presents the TOC results for the 9
AND COMMERCIAL USERS different models, with and without the introduction of the
environmental cost.
Commercial and industrial transformer purchasers can use a
more simplified but effective approach for evaluating
transformer losses [14]. This involves the same formula used TABLE II. NINE DIFFERENT TRANSFORMER MODELS FOR THE 160 KVA
by electric utilities, (1), but a different calculation procedure for DISTRIBUTION TRANSFORMER.
the coefficients A and B, without taking into account the total Transformer Bid No-load Load losses
environmental cost. The equivalent first cost of no-load losses model price (€) losses (W) (W)
for any particular transformer can be calculated as follows: D1 6630 486 2674
D2 14325 7.08
99.0 D1 D2
D3 14210 6.64 D3 D4
D5 D6
D4 15895 4.30 D7 D8
D9
98.5
D5 15435 4.72
Transformer efficiency (%)
D6 15093 5.08
98.0
D7 14627 5.11
D8 14114 7.44
D9 13867 - 97.5
D. Transformer Efficiency
An alternative approach to the evaluation of a transformer 97.0
0 10 20 30 40 50 60 70 80 90 100 110 120 130
based on its no-load and load losses is to measure its energy Transformer loading (%)
efficiency at a specific load or in a given load spectrum. The
general expression for efficiency is [14]: Figure 1. Transformer efficiency for each given model of transformer.
4 AF
BL
2
0
ACKNOWLEDGMENT
-20 -10
-2
0 10 20 30 This paper is part of the 03ED045 research project that is
co-financed by E.U.-European Social Fund (75%) and the
-4
Greek Ministry of Development-GSRT (25%).
-6
-8 REFERENCES
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