Bipartisan group of senators warns DOE not to make transformer shortage worse with new efficiency rule

Original article here.

Dive Brief:

• A bipartisan group of 47 senators has asked the U.S. Department of Energy to tread carefully in advancing new energy efficiency rules for distribution transformers that are in short supply. “Such a standard could come at meaningful cost to grid reliability and national security,” they wrote Thursday to Energy Secretary Jennifer Granholm.
• DOE proposed new standards for the transformers in December, to go into effect in 2027. But this is a “strategically inopportune time,” the senators said, and the rule could hinder the nation’s clean energy transition.
• A senior DOE official said the agency understands the concern and has been working with the power sector for more than a year to address the issue. A lack of investment in steel manufacturing, rising demand for transformers and labor shortages are contributing factors, the official said.

Dive Insight:

Average time for utilities to procure distribution transformers has risen from eight to 12 weeks in 2020 to more than two years, threatening storm recovery and the nation’s electrification goals, the senators warned DOE.

Senators who signed the letter include Joe Manchin, D-W.Va., Marco Rubio, R-Fla., and Amy Klobuchar, D-Minn.

“We urge the Department to refrain from promulgating a final rule that will exacerbate transformer shortages,” they wrote.  The group wants DOE to “convene stakeholders across the supply chain to develop consensus based approach to setting new standards.”

The group also requested a briefing with the agency on the path forward for the efficiency proposal, and how to best leverage DOE authority to bolster domestic supply chains.

Similarly, more than 60 House members in April asked DOE to withdraw the proposed rule.

Most distribution transformers use grain-oriented electrical steel cores, or GOES, but DOE’s proposed efficiency rule would largely transition the electric industry to using amorphous steel cores. There is only one domestic manufacturer of each type of steel, however.

DOE is “open to exploring both supply- and demand-side solutions to encourage further manufacturing of distribution transformers,” an agency spokesperson said in response to the senators’ letter.

DOE faces a court mandate to finalize any proposed change to the transformer standard by June 2024. Comments on its proposal were due in March, and supporters of the new rule say it could cut energy waste by up to 50% relative to most current transformer models.

The senators said they appreciate the efficiency benefits but “we believe the most prudent course of action is to let both GOES and amorphous steel cores coexist in the market.”

DOE must still go through the comments to understand the market dynamics and run a cost-benefit analysis based on new data that were submitted, the senior agency official said.

“So there’s an opportunity for different variations of what was proposed, or …  maybe we need more information and it’s something we should wait and evaluate later,” the official said.