TCO of transformers

Minute Lectures

What is the TCO of a transformer?

The Total Cost of Ownership, from purchase to decommissioning

Also called the Life Cycle Cost (LCC)

Goal: to compare transformers on

an equal basis in order to make a

purchasing decision

TCO of transformers

Minute Lectures

What are the components of the TCO?

TCO = Purchase price+ installation cost+ value of energy losses+ maintenance and repair cost+ decommissioning cost

TCO of transformers

Minute Lectures

Do all components have to be calculated? (1/2)

The TCO is not used for budgeting purposes, but to accurately compare transformers when purchasing

Therefore, only the components that differ from one transformer to another need to be calculated

TCO of transformers

Minute Lectures

Only those that differ from one transformer to another:

• Purchase price

• Lifetime value of energy losses

• Installation, maintenance and decommissioning cost: only when different technologies are compared (e.g. air-cooled vs. oil-cooled transformers)

Do all components have to be calculated? (2/2)

TCO of transformers

Minute Lectures

Value of energy losses

TCO = purchase cost + TCCloss (total capitalized cost of losses)

TCCloss = A * no load loss + B * load loss

A: easiest to be read off graph

B = A * (Loading)2

Loading = the expected average load over the life span of a transformer, harmonics incorporated.

TCO of transformers

Minute Lectures

The A-factor (1/2): graph

At an electricity price of 100 €/MWh

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Years

A f

ac

tor

(eu

ro/W

) a

t a

n e

lec

tric

ityp

ric

e

= 1

00

Eu

ro/M

Wh

6,75

3% 4% 5% 6% 7% 8% 9% 10% 11% 12%Interest

TCO of transformers

Minute Lectures

The A-factor (2/2): example

Example: what is the A-factor if the interest rate is 5%, the economic life span of the transformer is 10 years, and the electricity price 80€/MWh?

Answer: € 6.75 (see graph) * 80/100 = € 5.40

TCO of transformers

Minute Lectures

Example (1/3): conditions

Comparing a standard 1600 KVA transformer with a high efficiency unit

Characteristics:

Conditions:• Average loading: 65%, 24 hours a day, 7 days a week

• Average electricity price: 40 €/MWh• Average interest rate: 7%• Economic lifetime of the transformer: 20 years

1600 kVA transformer Pn (W) Pk (W) Purchase price (€)Existing 2800 15207 14451Energy efficient 2670 14218 14990

TCO of transformers

Minute Lectures

Example (2/3): A-factor

Total LCC = Purchase Price + A * no load loss + B * load loss

A = 9.35 €/W (see graph) * 40/100 = 3.74

B = A * (0.65)2 = 1.58

TCO of transformers

Minute Lectures

Example (3/3): conclusion

Standard transformer: Ct = 14,451 + 3.74 * 2,800 + 1.58 * 15,207 = €48,950

Energy Efficient: Ct = 14,990 + 3.74 * 2,670 + 1.58 * 14,218 = €47,440

(Pay-back period: about 5 years)

TCO of transformers

Minute Lectures

General conclusion

Energy losses can have a significant impact on the TCO of transformers, since they have a very long lifetime

The difference between the purchase price of a standard transformer and an energy-efficient one is paid back several times over the transformer’s lifespan

TCO of transformers

Minute Lectures

Round-up

TCO of a transformer is typically more than 3 times its initial purchase price

When choosing among transformers, make sure to base comparisons on TCO

In most cases, purchase price and value of energy losses are the main components in the TCO

It is prudent to purchase a more expensive, high-efficiency transformer, because it often yields a lower TCO

TCO of transformers

Minute Lectures

Links and references

• Case studies – industrial transformers>>

• Spreadsheet tool for life-cycle evaluation>>

• K-Factor & Factor K calculation>>

• Leonardo ENERGY resources on transformers>>