Transformers: An Essential Link of the Electrical Grid

Sourcing Transformers UtilitiesLook through your office or home window. If you can see a power line, there are chances a power transformer may be in the area.

What does a transformer actually do?

These heavy pieces of equipment transform the voltage of electricity, either stepping it up for transmission lines to carry electricity from power plants over long distances; or stepping it down to carry electricity to residential and commercial areas. The large power transformers (LPTs), located in substations, can be found near power plants, transmission lines, industrial zones and residential areas. LPTs can be the size of a small house. Other transformers, on poles, are as small as a garbage bin.

Transformers are essential for utilities as they are key links of the electrical system.Electric Grid Representation VeracityBy the way, do not forget that your charging cords are also transformers!

 Capital investment

Utilities started to heavily invest in the electrical infrastructure in the 1960s and 1970s. The capital spending is now reaching is lowest point in 50 years, even though power consumption is increasing by 2% a year.

The following graph by ABB shows a decrease in investment with a reduced amount of transformers ordered every year. This first wave of capital spend ended in 1990s, and should be naturally followed by a wave of replacement. Nevertheless, utilities cannot always afford it and numerous have decided to extend their transformers’ life, with the drawback of increased outage and failure risks.

Power Transformer Investment ABB Risks of failure and outage

Every product goes through 3 main stages in its life-cycle, as shown on the “bathtub” graph:

Bathtub curve Product“Infant Mortality” highlights failures due to defects and the quality of materials used. The end-of-life stage shows the most “natural” or logical failures due to wear and tear.

The main causes of failure are:Power transformer failure causeThe following elements can help determine when and how a failure would occur:

  • Year (vintage)
  • Manufacturer
  • Operating history and Test results
  • Operating environment
  • Failure history

Utilities use asset management solutions which help them monitor conditions of their transformer fleet on a daily basis. Models based on algorithms are used to determine risks of outage or failure depending on the life-cycle stages and help make the right decision before an event occurs.

Who manufactures transformers?

Less than 15 companies manufacture LPTs in North America. For transformers of lower voltage, the choice is larger, but is still considered as capital investment for utilities, with increasing lead time.Power Transformer ManufacturerPrice and lead time

With an average life of 40-50 years, numerous transformers are reaching their end of life. With an average lead time of 750 days and a price range from several thousands to over 7 million dollars, sourcing a transformer has become a long-term issue for utilities.

The skyrocketing prices of copper and electrical steels are the main cause of increased prices for transformers. Stricter standards also require the installation of costly monitoring devices and software.

Copper Steel Price Tranformer Electrical

The following table gives a better idea of the price range depending on capability and voltage.Large Power TransformerCase study

As the CEO of a utility company, your engineer in chief has let you know that a large power transformer, purchased 35 years ago, shows increased risks of failure in the next 6 months, probably due to extreme weather conditions the year before. Its replacement by a new unit is obviously already planned, but not within two years. What happens if it fails? As a small utility, you are able to manage your electricity load via other transformers, but for a short period of time. You cannot wait for a new unit and the storms alerts urge you to quickly find a plan B.


* Life-extension: manufacturers like ABB offer specific programs to rejuvenate or refurbish transformers. Nevertheless, the transformer will eventually need to be replaced by a new unit, in order to be up to standards and grid specifications.

* Buddy system: call and email your colleagues from fellow utilities. You can be lucky and have access to a spare transformer. But it rarely happens, unless one of your colleagues works at a large utility company.

* Critical Spares, collaboration: pooling and sharing strategies are an efficient alternative in order to source transformers and other heavy equipment. Although each utility has its own territory, collaboration is essential when capital investment cannot be afforded, while maintaining a high-quality customer service.

Veracity offers a platform specifically designed for the utility sector, Veracity Connect. Through a cloud interface, utilities can get a proactive approach to critical spares management:

  • Asset Management: the utility can upload its transformer/substation data including description pictures, maintenance records and current state indicators. The search for matching spares is made easier.
  • Critical Spares Access: utilities can directly locate available matching spares from fellow utilities, equipment brokers and reconditioners, Original Equipment Manufacturers (OEM) and industry partners such as state/province associations.
  • Surplus Management: companies can offer equipment to other utilities. These are what will contribute to the pool of available spares. It is a good way to monetize idle equipment and increase the power of collaboration.

Veracity Connect, collaborative platform

Go further

Why Do Transformers Fail?

The Transformer Problem

Veracity Connect

Determine The Best Disposition Solution For Your Surplus Assets

September Digest: Fall Is Here


“Transformers and the Electrical System”, Electro-Federation Canada, 2013

“Analysis of Transformer Failures”, W. Bartley, The Hartford Steam Boiler Inspection & Insurance Co., on behalf of the IMIA Task Group

“Transformer Asset Management”, W. Bartley, The Hartford Steam Boiler Inspection & Insurance Co.

“The Transformer Problem”, Willis North America, March 2008

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1 thought on “Transformers: An Essential Link of the Electrical Grid

  1. Pingback: High-Impact, Low-Frequency Event Risk to the North American Bulk Power System | Veracity Asset Management Group

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