Position paper regarding the proposed regulation in the EU w.r.t. ecodesign requirements for transformers

Transmission losses in European networks vary between 1 and 2.6% of electricity generated. Distribution losses can be as high as 11.7%. On average, 7% of electricity is lost in T&D networks, making losses the single biggest electricity use in any member state.

ECI welcomes the proposed regulation with regards to small, medium and large distribution and power transformers. Through this regulation, the European Union joins a global trend to regulate transformer efficiency. Without it, there is a real risk to deteriorating efficiency for both distribution and power transformers, considering new technologies and market pressures.

The approach in the impact assessment appears robust. Assumptions err on the conservative side. Several impacts on the benefit side, such as electricity price trend, load growth, system capacity cost, true cost of losses and external costs have not been taken into account. Further impact assessment taking these factors into account can only strengthen the proposed regulation.

Lifecycle assessment of 100-1600 kVA distribution transformers, performed by ECI, demonstrates significant net environmental impacts of increased efficiency. The energy return on energy invested (EROEI) for the additional material used is a factor 100 or more.

Network losses cost European consumers annually over 11 billion euros, which the proposed regulation would reduce by 10%. The cost savings can pay for the additional investment in transformers, and eventually lower electricity prices to end-users.

The ecodesign regulation needs to be coordinated with the electricity liberalisation and the energy efficiency directives. Internalising the benefits of energy saving for network operations, and allowing for a sufficiently long period to recover the investment will result in economically efficient investments for utilities, while gradually transferring the benefits to customers.

For implementation of the regulation, a dialogue with regulators could be established to ensure adequate incentives for the introduction of higher efficiency transformers, while removing disincentives as well as to harmonize the approach to the cost of losses, its time dependence and the cost-benefit analysis. This could result in a guideline on regulatory incentives supporting the investment in economically optimum efficiency levels proposed as the regulation.