The U.S. is facing an “unprecedented” shortage of electric transformers, NREL says
Energize Weekly, March 27, 2024
The U.S. is facing an “unprecedented” shortage of electric distribution transformers creating challenges for the nation’s utilities, according to a study by the National Renewable Energy Research Laboratory (NREL).
The nation’s grid faces the dual pressures of aging transformers and a push to electrify the economy, according to the study funded by the U.S. Department of Energy.
NREL estimates that distribution transformer capacity may need to increase 160 percent to 260 percent from 2021 levels to meet residential, commercial, industrial, and transportation demands.
The transformers are the link between the high-voltage electricity sent from power plants across high-tension transmission lines and the stepped-down voltage, thanks to the transformers, that flows into homes and businesses.
“Distribution transformers are a bedrock component of our energy infrastructure,” Killian McKenna an NREL researcher, said in a statement. “But utilities needing to add or replace them are currently facing high prices and long wait times due to supply chain shortages. This has the potential to affect energy accessibility, reliability, affordability—everything.”
NREL estimates that there are currently 60 million to 80 million transformers operating with an installed capacity of 3 terawatts.
“Most of the nation’s current transformers are owned by over 3,000 distribution utilities across the country,” McKenna said. “As you can imagine, that adds an extra layer of complexity to our effort to quantify them.”
Utilities are experiencing waiting times up to two years – four times the pre-2022 lead time – for transformers and reporting price increases by as much as nine-fold.
The pinch is the result of pent-up demand after the pandemic and supply chain problems exacerbated by and labor and material shortages.
Even without new demands on the grid many of its transformers are aging – the devices are expected to last 20 years – and will need to be replaced, the NREL study said. For example, the average age of transformers for Detroit’s DTE Energy is 41 years-old.
From its preliminary analysis NREL estimates by 2050, 60 percent to 80 percent of service transformers will have been swapped out through routine replacement.
On top of that, increased load will challenge the existing transformer network and demand more transformer capacity, the study said. NREL is also assessing the impact of extreme weather events on transformers.
Among the trends driving load growth are the increased adoption of electric vehicles, heat pumps, and electric stoves.
Residential demand will vary across the country. “The largest increases in demand are expected in cold climate states where both electric vehicle adoption and adoption of heat pumps will likely significantly drive demand,” NREL said.
In the commercial and industrial sectors electricity demand is set to rise with the growth of data centers and an increase in manufacturing – spurred by government incentives – in areas such as microchips and electric vehicles.
In addition to traditional step-down transformers, step-up transformers will be needed to put wind and solar electricity on the long-distance transmission system.
While all these trends will increase the baseload demand for electricity, transformers also face a challenge from increased surges or peaks in demand, The units can meet the increased demand for a time.
“Transformers are designed to accommodate increased loading for limited periods,” NREL said. “In some situations, this extra built-in capacity could absorb some of the increase due to electrification. In such cases, the transformers are expected to run until failure.”
Using up this “extra capacity” comes with a cost. “Loading from electrification is expected to increase the rate of transformer failure in these situations, particularly post-2030,” the analysis said.
Extreme weather and climate change are also threats to transformers.
“The increasing frequency and severity of extreme weather events and longer-term trends in climate are also expected to increase transformer demand,” NREL said. “Historically, hurricanes, storms, wildfires, heat waves, blizzards, and high-wind events have caused significant damage to the transformer stock.”
In 2005, Hurricanes Katrina and Rita damaged 12,600 transformers in Entergy’s Louisianna service territory and Mississippi Power lost around 2,300 transformers. Hurricane Laura in 2020 damaged 4,760 transformers and the count in 2021’s Hurricane Ida was 6,000.
NREL estimated that slightly more than 1 percent of annual transformer shipments are replacements for weather-damaged units. “While the demand resulting from these events can seem low in terms of overall transformer demand, it can represent a massive volume of infrastructure for an individual utility,” the analysis said.
