1. Electricity Distribution System Industrial Commercial Agricultural Domestic System transformer Distribution transformer

3. LV Distribution Substation Transformer HV Switchgear LV Switchgear

5. Substation Plant Purchasing Climate – Before Deregulation - publicly owned, by government or municipality - no profit motive or private shareholders - limited measurement of electricity purchases and consumption - energy efficiency generally a low priority - mixture of network reinforcement, renewal and extensions - specialist sub-station engineering and purchasing function

7. Asset Age Distribution – City Utility Source: London Electricity

9. Transformer Purchasing – Before Deregulation - several approved suppliers, mostly domestic companies - transformers were manufactured to order - annual competitive tendering to national or utility specification - contracts for one year placed, few hundred units with each supplier - transformers manufactured against agreed delivery schedule - scope to cut back purchases

11. Utility Purchasing Cycle - Distribution Transformers Refurbishment, repair, spares Invitation to tender Call-off starts Development contracts “Transformer of the future” months 123 Contracts awarded NegotiationEvaluation of bids

13. Substation Plant Purchasing Climate - Today - utility is privately owned by investors - capital-intensive business, with large fixed assets - facing complex business issues, maximise profits, expand in size - secure customer base is under attack - defensive moves to protect share price, avoid acquisition - focus is on asset management, rather than purchasing and engineering -regulators starting to have an impact

15. Transformer purchasing - Today - installed transformers seen as reliable long-lasting assets - little pressure to undertake renewal and reinforcement - purchasing throughout Europe, longer-term contracts - very competitive market. Contraction of supply side - financial benefits of energy savings not yet apparent

17. Energy Efficiency Issues – Utility Transformer Purchasing - European transformer specification permits a low level of efficiency - scope for utilities to choose lowest standards (BA’, AA’) - higher capital cost of energy-efficient transformers - strong incentive to take short-term viewpoint - higher efficiency requires justification, meet utility’s financial policy

19. Losses, Utility Distribution Transformers, Western Europe (P O +P K, 400kVA)

21. Substation Plant Purchasing - Agents for change - impact of national electricity industry regulators - climate change goals and pressures - financial benefits of energy savings becoming apparent - scope to learn from overseas

23. - wider recognition of the energy savings achievable - adoption of high standards which are already available - use of new materials and manufacturing technology - on-line metering and condition monitoring - computation of energy savings Transformer Purchasing - Future

25. Ranking of Importance – Distribution Cost Elements, Europe Key factorNetwork lossesCountry Capital costs3Sweden Capital costs4Spain Capital costs4Norway Capital costs4Netherlands Capital costs4Italy Operational control4Germany Operational control, overheads3France Operational control4Austria Source: Eurelectric