Distribution Transformers Aligning sustainable goals financial benefits quality

Distribution Transformers: Aligning sustainable goals, financial benefits & quality WCM Summer School 2014 Group 8

Key figures • Case company: Liander o Liander distributes energy through the Liander grid to customers in the Netherlands • Case topic: Distribution Transformers (DT) o DT transforms electrical power between different voltage levels o Medium Voltage (20 k. V/10 k. V) into Low Voltage (690 V/400 V) o 33. 000 DTs in the Liander grid o Highly reliable (7 failures / year / grid) o Average life span: 40 years 2

Problem statement • Goal: Make investment proposals for distribution transformers to provide the stakeholders of Liander with the highest (circular) value. • Problem: Main interests of key stakeholders seem to be unaligned: - Increase sustainability (circularity) - Increase Financial Profit - Maintain Quality & Safety • Is it possible to align the interests of all stakeholders? YES! 3

Scenarios 4

1: Current policy: Replace DTs placed prior to 1970 with newer, more sustainable DTs • Key elements o Significant reduction in energy losses (sustainability) o Reuse existing DTs (sustainability, cost-efficient) o Cost-efficient: Average annual return over total depreciation period (40 years): 16% o Saving CO 2 of 180. 000 kg over total lifespan o Proven technology with long life cycle (higher quality) • Implementation: o Currently ± 450 replacements/year o Continue this process 5

2: Replace DTs placed prior to 1970 with new DTs with On Load Tap Changer (OLTC) • Key elements o Preventing a replacement wave (risk reduction) o Withstands future changes to the grid (risk reduction) o Significant reduction in energy losses (sustainability) Reduction outweighs energy for replacing & 95% of material of old DT is circular o Average annual return over total depreciation period (40 years): 7, 76% o Saving CO 2 of 250. 000 kg over total lifespan o Initial investment outweighs future modification costs (cost efficient) o Proven technology with long life cycle (higher quality) • Implementation: o Tender for new DTs with OLTC o After delivery, gradually start placing the new DTs. 6

3: Align all stakeholders in the supply chain to reach EU demands most efficiently • Motive: Commission Regulators (EU etc. ) demand more sustainable energy distribution (Ecodesign DB – 2009/125/EC) • Key elements o Reach the EU sustainability goal by decreasing the CO 2 -emission of DTs with combined effort of all stakeholders in the supply chain o Design for Maintenance & Recycling o Modernization of grid system, such as DTs with On Load Tap Changers o Embed sustainability goals in tendering procedures. o Reduce costs in long term for all stakeholders o Positive impact to the customers. • Implementation: Gather most important stakeholders (Regulators, Energy Production and Distribution Companies, Material, Component and System Suppliers) to determine the strategy for fulfilling the EU goals. 7

Conclusion Aligning interest of all stakeholders: • Improving sustainability, • Increasing Profit, • Maintaining high quality, and • Managing risks (future proof). Thank you for your attention 8