Substation Reliability Tip #10

The Cost of Electric Power Reliability

That transformer in the back of your facility will continue to supply all the power you need. It did yesterday. It will today. It will tomorrow. Until it doesn’t. It’s all fun and games… until it isn’t.

The risks related to electrical transformer failures are real and costly. The combination of downtime and equipment replacement costs can be staggering. Because nearly every commercial or industrial company uses power to produce something, any unexpected interruption to that power affects the bottom line. The cost of a breakdown in an electrical system or a transformer is much more than the cost of the equipment alone. Unplanned outage costs add up fast with lost production, wasted labor, and depleted inventories. For perspective, a survey of automotive manufacturers concluded an average loss of $22,000 per minute of downtime. Your business may not experience that hefty price tag, but any cost due to unplanned downtime is a price you don’t want to pay.

As for replacement costs, if your current transformer should fail, the lead time for a new unit can vary depending on the time of year and the complexity of the design and material requirements. US factories typically take about 20 weeks in peak seasons to build and deliver a new 3-phase transformer. However, lead times can range from 30 weeks to over a year if the design and material requirements are complex or backlogged.

Transformer lead times have increased due to supply chain issues. For example, lead times for pad-mounted units have grown from 3 to 4 months before the pandemic to 17 months since supply chain disruptions started in early 2021.

Transformers have been in short supply in recent years due to a global expansion in electricity use. Utilities have been waiting more than a year for the equipment. Average costs have doubled or tripled.

There are hundreds of variables to deal with in doing business in an imperfect world. Some of those variables are outside of our control, but many are within our realm of control. Because the price tag of unreliability, downtime, and replacements is incredibly high, our efforts to maximize the variables related to the reliable life of a transformer are critically important and achievable.

Ultimately, organizations will pay for reliability or unreliability, and the cost of reliability pales compared to the cost of unreliability.