The U.S. Department of Energy has recently finalized the congressionally authorized energy efficiency standards for distribution transformers, aiming to enhance the resilience and efficiency of the U.S. grid, support high-wage, high-quality manufacturing jobs, and accelerate the nationwide deployment of affordable, reliable, and clean power. The final standards, including a longer five-year compliance timeline, are expected to save utilities, commercial, and industrial entities $824 million annually in electricity costs and increase demand for core materials such as Grain-Oriented Electrical Steel (GOES). Based on feedback from stakeholders, the Department adjusted the final standards from last year's proposed standards to ensure continued growth opportunities for domestic steel production and provide a longer five-year compliance timeline.
The final efficiency standards will primarily utilize Grain-Oriented Electrical Steel (GOES) as the main raw material, supplemented by small amounts of non-grain-oriented alloys. The majority of products will be manufactured domestically in the United States. Distribution transformers will convert high-voltage electricity from the generation end to a safe level for use by homes and businesses.
Over 60 million distribution transformers are installed on utility poles and pads nationwide, operating 24/7, 365 days a year, and lasting for decades. Improving their efficiency will reduce energy waste on the grid and save a significant amount of energy for the United States.
Over the next 30 years, the new standards are projected to save Americans over $14 billion in energy costs and reduce nearly 85 million metric tons of hazardous carbon dioxide emissions, equivalent to the annual emissions of almost 11 million households. The new standards are estimated to save 10% in energy usage compared to current market products.