Five benefits of digital distribution transformers for power grids

Digital distribution transformers offer many potential benefits for power grids that justify their adoption for power grids.

By Azhar Fayyaz and Saqib Saeed March 19, 2024
Image courtesy: Brett Sayles

 

Learning Objectives

  • Explore the hurdles in adopting digital distribution transformers.
  • Educate on the importance of digital distribution transformers, their impact on reliability, maintenance costs, and environmental sustainability and the need for modern asset management strategies in the electricity grid.

Digital distribution transformer insights

  • Hurdles in adopting digital distribution transformers include their ambiguous definition, high upfront cost, perception of easy replacement, and the influence of engineering, procurement and construction (EPC) entities.
  • Despite these impediments, digital distribution transformers offer numerous benefits that justify their adoption, including flexibility and control, low failure rates, reduced maintenance costs, lower carbon footprint and extended lifetime.
  • Although the extra upfront cost of digital distribution transformers may discourage some end users, the life cycle cost analysis (LCCA) of the digital distribution transformer makes it a good long-term investment.

The evolving dynamics and increased complexity of today’s electricity grid necessitate implementing dynamic asset management strategies, particularly for distribution transformers. However, existing asset management approaches rely on outdated time-based maintenance strategies that may not adequately address present-day requirements.

For example, traditional practices for transformer sizing in residential applications often involve making assumptions based on average load and peak periods. Although this approach has historically yielded satisfactory results, emerging factors like electric vehicles (EVs) and renewable energy sources raise concerns about potential transformer overload. Ensuring the electricity grid is compatible with EVs, and renewable energy sources is essential.

Digital distribution transformers can offer enhanced monitoring capabilities and operational efficiency and provide many benefits to the electricity grid and the projected future for the market supports this (Figures 1 and 2).

Figure 1: Global electric vehicle (EV) Sales for 2022 and 2026.

Figure 1: Global electric vehicle (EV) Sales for 2022 and 2026. Courtesy: PTR Inc.

Figure 2: Increase in renewable energy generation (solar and wind) through the years.

Figure 2: Increase in renewable energy generation (solar and wind) through the years. Courtesy: PTR Inc.

Four potential hurdles for digital distribution transformer adoption

A few hurdles in adopting digital distribution transformers include their ambiguous definition, high upfront cost, perception of easy replacement and the influence of engineering, procurement and construction (EPC) entities.

1. Ambiguous definition of digital transformers

The term “digital transformers” is loosely defined and often confusing, creating a significant hurdle in the widespread adoption of digital assets in power grids. Like the fitness tracking market, the label “smart” is used liberally, lacking a universally accepted criterion. The ambiguous definitions raise questions that require clarity. Is the installation of a single sensor sufficient to give a distribution transformer the status of “digital transformer,” or should there be a minimum number of sensors and comprehensive data integration? Like the fitness tracker landscape, the digital transformers domain necessitates a standardized definition.

2. High upfront cost

An integral challenge for the end users in embracing digital distribution transformers is the immediate upfront investment required for monitoring equipment. Despite recognizing the advantages of data-driven transformer asset management, many stakeholders hesitate to shift to digital transformers due to cost concerns. A digital transformer is 15 to 20% more expensive than a non-digital transformer.

3. Perception of easy replacement

Another obstacle is the prevailing notion distribution transformers can be easily replaced upon failure. This viewpoint arises from the availability of standard stocked inventory and the ease of swapping transformers. There is a limited acceptance of monitoring systems for distribution transformers as they cannot be replaced immediately without facing any difficulties. Lead times of distribution transformers are 7 to 8 weeks, while power transformers is 1 to 2 years.

4. Influence of engineering, procurement and construction (EPC) entities

When the cost-benefit analysis of a digital transformer purchase is solely based on initial cost without considering long-term benefits and durability, end users tend to choose the lowest-priced options because of their limited knowledge. As a result, original equipment manufacturers (OEMs) and contractors, impacted by the demand for lowest-priced equipment, may be disincentivized from recommending the more expensive monitoring options that are beneficial in the long term. As a result, OEMs and contractors prefer to sell affordable conventional equipment as end users are often reluctant to incur higher upfront costs.

Five benefits of digital distribution transformers

Despite these impediments, digital distribution transformers offer numerous benefits that justify their adoption, including flexibility and control, low failure rates, reduced maintenance costs, lower carbon footprint and extended lifetime.

1. Flexibility and control

Digital transformers ensure the safety of electrical grids, especially with the integration of more renewable energy sources and electric vehicles. These transformers work beyond their basic roles; they can assist the grid by communicating with other digital devices like electric vehicle chargers. This communication is essential for electric utilities and grid operators because it gives them a clear picture of what is happening on the grid. With DERs and EV charging becoming integral to today’s modern grid, flexibility and control have gained extreme importance. From optimized EV charging to more effective distributed energy resource management, digital transformers are the enablers of every concept that promises to bring more flexibility and control to the grid.

2. Low failure rate

Digital distribution transformers utilize advanced monitoring and diagnostic capabilities, reducing the occurrence of unexpected failures. Real-time data analysis helps detect potential issues early, allowing for preventive measures and minimizing the risk of transformer breakdowns. Digital distribution transformers can reduce the average failure rate of 1 to 2% even further than a non-digital transformer, enhancing overall reliability.

3. Reduced maintenance costs

Incorporating digital distribution transformers in the electrical grid shifts the focus from time- to condition-based maintenance. Instead of adhering to fixed schedules, maintenance activities are performed when specific conditions occur. This enables more efficient use of resources, reducing the cost incurred in the long term. Digital transformers also allow for remote diagnostics that enable engineers to identify issues without physically inspecting the transformer, streamlining maintenance efforts and reducing the need for frequent on-site visits.

4. Lower carbon footprint

Digital distribution transformers incorporate energy-efficient technologies, contributing to a reduction in overall energy consumption. Enhanced monitoring and control capabilities optimize transformer performance, minimizing energy losses and lowering the carbon footprint associated with electricity distribution. As the digital transformer enables continuous grid monitoring, these transformers reduce energy waste and contribute to a greener, more sustainable power grid.

5. Extended lifetime

The ability to predict and address potential issues before they worsen helps extend the operational life of digital distribution transformers. With the help of digital transformers, signals are regularly sent to monitor transformer health. Continuous monitoring of transformer health indices allows for proactive maintenance and optimized operation, leading to increased lifespan. It also can adapt based on changing load patterns and environmental conditions. This adaptability ensures the transformer operates efficiently in various scenarios, contributing to an extended lifespan by minimizing stress and enhancing resilience.

Looking ahead for digital transformers

The global distribution transformer market is expected to grow with a 7.9% compound annual growth rate (CAGR) between 2023 to 2028. The prevailing notion that monitoring is unnecessary for distribution transformers is rooted in the traditional power network paradigm with unidirectional power flow. However, monitoring becomes crucial in preventing revenue loss and optimizing performance with electricity grids’ increasing complexity and changing dynamics with time. Many digital transformers will be installed in the distribution sector.

With the proliferation of variable speed drives (VSDs) and other power electronic-based machines, the need for self-monitored transformers is evident for industrial applications. Although the extra upfront cost of digital distribution transformers may discourage some end users, the lifecycle cost analysis (LCCA) of the digital distribution transformer, which includes the benefits incurred from owning equipment in the long term, indicates digitalization is a wise long-term investment.

By enabling precise load management based on real-time measurements, digital distribution transformers offer invaluable insights and pave the way for more efficient and sustainable power distribution systems.


Author Bio: Azhar Fayyaz is a market analyst and product manager (Transformers) at PTR, specializing in power grid projects. Saqib Saeed is the chief research officer at PTR Inc. His expertise lies in the power grid and e-mobility equipment sectors.