Distribution transformers include the metal boxes found in subdivisions and cylinders found on utility poles across the nation that serve the important function of reducing electricity voltage to levels needed to power lights, appliances, equipment and other products. They are also commonly used in industrial facilities. Utilities generally own and operate "liquid-immersed" transformers, where liquid-immersed refers to the type of insulation medium. Liquid-immersed distribution transformers use oil as a coolant and are generally installed outdoors, unlike dry-type transformers that are generally installed indoors.
The 2007 DOE-issued standard for liquid-immersed transformers became effective in January, 2010. The standard fell short of the levels endorsed both by the utility industry, represented by the Edison Electric Institute (EEI) and the American Public Power Association (APPA), and energy efficiency and environmental groups. In March 2010, DOE began a new rulemaking to update standards for the three main categories of distribution transformers: liquid-immersed, low-voltage dry-type and medium-voltage dry-type. In the April 2013 final rule, DOE settled on a very modest increase in efficiency for liquid immersed transformers based on concerns about the supply chain for the more efficient “amorphous” steel. However, in 2016, DOE plans to determine if market conditions, particularly those for amorphous steel, justify re-evaluating the standard level. The standard will reduce losses by 4% for the most commonly sold products. Based on DOE analysis, liquid-immersed transformers sold over thirty years will save nearly 130 billion kWh and reduce CO2 emissions by 82 million metric tons or an amount equal to the annual emissions of 17 million passenger cars. The standard went into effect on January 1, 2016.
In June 2019, DOE published a Request for Information to collect data to determine whether to amend the current energy efficiency standards for distribution transformers. In May, 2019, DOE published a proposed rule for the distribution transformer test procedure.
Transformers are generally very efficient — electricity losses are usually below 1 or 2%. However, since all power generated goes through one or more transformers, even small improvements can yield very large national savings benefits. In general, transformers can be made more efficient by using better quality windings (which can be aluminum or copper) and through improved core designs, material (electrical grade steel), and construction. Amorphous core material offers the biggest step up in efficiency. DOE documents show that in 2009, the liquid-immersed transformer market accounted for 76 percent of the distribution transformers sold in the United States.