This session is part of the Clean Energy Regulators Initiative Webinar Programme. Theme 2 - Pressure Points Module 3: Asset Management - Replacement criteria for distribution transformers In today's power grids, transformers represent a significant capital investment and play a crucial role in the reliability of the grid and the availability of electric power. It is the task of the asset or plant manager to safeguard reliability and control risks at limited cost. The asset management instruments that may be used, in increasing order of effectiveness and cost, are monitoring, maintenance, refurbishment and replacement. Asset management has moved from "doing the best we can" to "doing what is necessary to maintain the balance between performance, cost and risk, given the company business values". This paradigm shift has changed the way replacement decisions are being taken. On the basis of company business values, risks are being identified and assessed, from the combination of failure probability and impact. Decisions are based on the hazard risk score (urgency) and on the risk reduction capability of the mitigating measure (effectiveness), and are dependent on the company's risk appetite. Whereas replacement alternatives are often attractive for high power transformers due to the relatively high cost of replacement, this situation is quite different for distribution transformers. Distribution transformers are often regarded as commodities. They are relatively inexpensive and can be delivered off stock. Therefore alternatives for replacement need to be low cost, and thereby effective, efficient and standardized. As a result such alternatives are at present often cost effective only on a fleet scale, and too expensive for individual transformers. This situation may change when alternative solutions such as monitoring devices will be integrated as a low cost commodity in new distribution transformers.

1. ENERGY
ECI webinar
Replacement criteria for distribution transformers
Dr Jos Wetzer
16-01-2014
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NL-OPE-AM JW001
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2. CONTENTS
 Introduction
 Modern asset
management
 Transformer
lifetime issues
 Transformer risk
management
 Mitigation options
 Decision making
process
 Decision making
criteria
 Conclusions
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3. INTRODUCTION
 Recent Trends
– Increased societal dependence on
reliable energy supply
– Upcoming replacement due to
investments in 60s and 70s
– New diagnostic- and monitoringtechnology
– Introduction of risk based asset
management concepts
 Question Addressed
How have recent trends influenced transformer asset management,
and in particular transformer replacement decisions
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4. MODERN ASSET MANAGEMENT
 Asset management has changed:
– from "doing the best we can"
– to "doing what is necessary to maintain the balance between
performance, cost and risk, given company business values“
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5. MODERN ASSET MANAGEMENT
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6. MODERN ASSET MANAGEMENT
 Introduction of PAS55, based on risk management process:
– definition of business values (reliability, safety, etc)
– identification of hazards
– analyse hazard probability, impact and risk
– define degree of risk acceptance (appetite)
– decision based on risk score (urgency) and
on risk reduction effectiveness
Business value: RELIABILITY
Business value: ENVIRONMENT
Business value: SAFETY
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•
•
•
Explosion of transformer (part)
Fire
Toxic byproducts
•
•
•
Maintenance
Monitoring
Replacement
Impact
limitation

Example of
hazard
Preventive
measures
 Example distribution transformer
•
•
•
•
Protection
Firewalls
Pressure relief
Safety measures

7. LIFETIME ISSUE 1: DO TRANSFORMERS REACH THE END OF LIFE?
 The most frequent causes of failure
o Tap changer failure, bushing failure (tap changers and bushings can be replaced)
 Only few failures are caused by external causes
o Short circuit current, lightning strike, transient overvoltage
 End of life is not based on age but on remaining life
o Only insulation winding paper shows irreversible degradation
o Remaining life from loading guide, furfural analysis or statistical analysis
 The transformer end of life
o Determined by paper insulation degradation
o Depends on acceptable failure probability
o Is hardly ever reached
o Hardly ever reason for replacement
 What are the main replacement criteria?
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8. LIFETIME ISSUE 2: WHAT ARE THE REASONS FOR REPLACEMENT?
 Unacceptability of failure probability
 Transformer losing functionality
Inability of the grid to deliver sufficient power, or inability to comply with government or SHE
regulations (acoustic emission, PCB presence in oil), due to
– Increasing grid demands (power rating)
– Changing environmental requirements
 Transformer losing maintainability
– Spare parts are no longer available
– Insufficient knowledge, capacity or willingness to keep maintaining equipment.
– Too much diversity for efficient maintenance
 Transformer showing operational issues
– Replacement by low-loss alternatives may outweigh losses
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9. (TRANSFORMER) RISK MANAGEMENT
Acceptance
Criteria
Portfolio
Management
RISK ANALYSIS
RISK TREATMENT
• Hazard
• Probability
• Impact
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RISK ASSESSMENT
•
•
•
•
•
Inventory / problem
Scenario’s / likelihood
Alternatives
Constraints
Objectives
(cost, life expectancy)
• Decision
• Prioritization
• Selection &
postponement
• Planning
• Execution
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10. RISK MITIGATION (IN GENERAL)
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11. MITIGATION OPTIONS (TRANSFORMERS)
 Adjust functional characteristics
– Increase power rating by enhanced cooling (insufficient power rating)
– Apply acoustic insulation (acoustic emission)
– Cleaning or containing the oil (PCB containment)
 Intensify monitoring and maintenance
Ensure performance; timely identify replacement
need, by:
– Higher frequency, additional maintenance
activities
– Apply transformer monitoring
– Health Index tools
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12. MITIGATION OPTIONS (TRANSFORMERS)
 Refurbishment and life time extension
– Often transformers exceed design life (moderate loading, prevailing design margins)
– Lifetime may be extended by replacing critical parts
 O&M policy and practice
– Load control (slow down degradation, buy time)
– Intensification of maintenance, keeping a supply of spare parts, contracting alternative
providers
 Replacement
– Distribution transformers: end of life (or: increasing failure probability) is seldom a
replacement criterion on its own
– Other criteria include: lack of spare parts or service, losses, or inability to meet (future)
requirements
– Recent criterion: instrument to spread costs and manpower needed for large scale
replacement and delivery risks
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13. DECISION MAKING PROCESS
(Suspected) end of life
(Suspected) capacity bottleneck
Quantification of problem
Quantification of (future) limitations
Failure probability and impact
Congestion probability and impact
Opportunities for improvement
Opportunities for improvement
Life time extension
Option 1
Replacement
Option 2
Costs & Benefits
Uprating
Costs & Benefits
Decision making
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Replacement
Reduce restraints
Upgrading
Costs & Benefits
Reduce load
Costs & Benefits
Decision Making

14. DECISION MAKING PROCESS
For a more detailed treatment of transformer replacement see e.g.
APPLICATION NOTE TRANSFORMER REPLACEMENT DECISIONS
ECI Publication No Cu0185, available from www.leonardo-energy.org
Bruno De Wachter, November 2013
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15. DECISION MAKING CRITERIA
 The key criteria in this decision process are:
– Failure probability and failure impact
– Risk profile (urgency) and appetite (acceptability)
– Effectiveness of different alternatives (prioritized action)
– Cost & return on investment of the different alternatives.
 Aging population: additional constraints to manage replacement wave:
– Concentration of investments required
– Concentration of manpower required
– Production capacity of manufacturers
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16. CONCLUSIONS 1
DECISION PROCESS
 Asset management decision taking is governed by company business
values, risk evaluation (probability and impact), risk appetite and risk
based urgency, and on the risk reduction capability of the mitigating
measures.
RISK BASED DECISION PROCESS
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RISK APPETITE

17. CONCLUSION 2
DECISION CRITERIA
 Transformer age is not a replacement criterion
 End of life is a replacement criterion, but is hardly ever reached
– End of life is governed by loss of life / remaining life (load, temperature)
 Common replacement criteria include
– Transformer losing functionality
– Transformer losing maintainability
– Transformer showing operational issues
 Replacement alternatives include
– Adjusting functional characteristics
– Intensifying monitoring and maintenance
– Refurbishment and life time extension
– Adjusting O&M policy and practice
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18. CONCLUSION 3
HIGH POWER & DISTRIBUTION TRANSFORMERS
 Replacement alternatives are often attractive for high power
transformers (high replacement cost).
 Distribution transformers are often regarded as commodities, relatively
inexpensive, deliverable off stock. (Identification of) alternatives for
replacement need to be low cost, effective, efficient and standardized.
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19. CONCLUSION 4
DISTRIBUTION TRANSFORMER ALTERNATIVES
 For distribution transformers, alternatives for one-to-one replacement
are only worthwhile if:
– Monitoring devices are integrated as low cost commodities
– Replacement need is monitored, analysed and prioritized on a fleet scale, and
supported by Health Indexing Tools
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20. Thank you for your attention!
Replacement criteria for distribution transformers
jos.wetzer@dnvgl.com
+31 26 356 6388
www.dnvgl.com
SAFER, SMARTER, GREENER
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