New Rule Would Strengthen Grid Resiliency, Cut Carbon Emissions, and Deliver up to $15 Billion in Savings to the Nation 

The U.S. Department of Energy (DOE) proposed new energy-efficiency standards for three categories of distribution transformers to improve the resiliency of America’s power grid, lower utility bills, and significantly reduce domestic carbon-dioxide (CO2) emissions. DOE’s proposal represents a strategic step to advance the diversification of transformer core technology, which will conserve energy and reduce costs. Almost all transformers produced under the new standard would feature amorphous steel cores, which are significantly more energy efficient than those made of traditional, grain-oriented electrical steel. If adopted within DOE’s proposed timeframe, the new rule will come into effect in 2027.   

“The Biden-Harris Administration continues to use every means available to reduce America’s carbon footprint while strengthening our security posture and lowering energy costs,” said U.S. Secretary of Energy Jennifer M. Granholm. “Efficient distribution transformers enhance the resilience of our nation’s energy grid and make it possible to deliver affordable electrical power to consumers in every corner of America. By modernizing their energy-conservation standards, we’re ensuring that this critical component of our electricity system operates as efficiently and inexpensively as possible.”  

DOE estimates that the proposed standards, if finalized, would reduce U.S. CO2 emissions by 340 million metric tons over the next 30 years—an amount roughly equal to the annual emissions of 90 coal-fired power plants. DOE also expects the proposed rule to generate over 10 quads of energy savings and approximately $15 billion in savings to the nation from 30 years of shipments. 

The Administration is also working to address near-term supply chain challenges and strengthen domestic manufacturing of key components in the electric grid. In June, President Biden invoked the Defense Production Act to accelerate the domestic production of clean energy technologies, including distribution transformers and grid components. In October, DOE issued a Request for Information to gather additional public input to determine how to maximize the impact of these new authorities. The comment period closed on November 30th and DOE is carefully considering the information submitted. 

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Additionally, as the supply of traditional, grain-oriented steel tightens, DOE is focused on diversifying domestic steel production where capacity can be expanded, such as in the production of amorphous steel used in advanced transformers. In support of these efforts, DOE is also finalizing the implementation guidance for the distribution transformer and extended product system rebate programs established by the Energy Act of 2020 and funded by President Biden’s Bipartisan Infrastructure Law. This rebate program encourages the replacement of energy-inefficient distribution transformers and extended product systems with more-efficient replacements.  

A distribution transformer is a device used to change the voltage of electrical power. A common sight on utility poles in neighborhoods throughout the country, these transformers lower the voltage of electrical power before distribution to the customer. Purchasers of distribution transformers are primarily electric utilities and commercial or industrial entities.  

Current efficiency standards apply to liquid-immersed, low-voltage dry-type, and medium-voltage dry-type distribution transformers. DOE’s proposed rule would amend the energy conservation standards for all three categories.  

On Thursday, February 16, 2023, DOE will host a public meeting to solicit feedback on the proposed rulemaking from stakeholders.  

DOE’s Appliance and Equipment Standards Program implements minimum energy conservation standards for more than 60 categories of appliances and equipment. As a result of these standards, American consumers saved $63 billion on their utility bills in 2015 alone. By 2030, cumulative operating cost savings from all standards in effect since 1987 will reach nearly $2 trillion. Products covered by standards represent about 90% of home energy use, 60% of commercial building use, and 30% of industrial energy use.