Biden admin issues energy efficiency restrictions on key power grid technology

The Biden administration announced energy efficiency standards targeting distribution transformers, an essential component of the nationwide grid.

Energy Secretary Jennifer Granholm explained that the final regulations represent a pared-back version of her agency's original proposal. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

Granholm also emphasized that the energy efficiency standards will slash nearly 85 million metric tons of carbon dioxide, the equivalent of the combined annual emissions of 11 million U.S. homes.

Under DOE's regulations, energy efficiency gains will be achieved with 75% of the transformers on the market being manufactured with grain-oriented electrical steel (GOES) and another 25% being manufactured with amorphous alloy, a lesser-used electric steel core material. Manufacturers will be given five years to ensure total compliance with the regulations.

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While the new standards require transformers to be more energy efficient, they also represent a scaled-down version of the regulations DOE first proposed in January 2023. 

Under the original plan, 95% of distribution transformers would have been required to be made with amorphous alloy and manufacturers would have three years to comply.

That proposal was widely criticized by power providers and utility companies that characterized it as unrealistic. It also led to bipartisan legislation, introduced in January by Sens. Sherrod Brown, D-Ohio, and Ted Cruz, R-Texas, which would require DOE to issue standards at levels that preserve market opportunities for transformer manufacturers.

Sen. Sherrod Brown opposed DOE's original energy efficiency regulations for distribution transformers, which he said are "crucial to our electric grid and our energy independence." (Tom Williams/CQ-Roll Call, Inc via Getty Images)

"The revised rule helps to preserve the availability of both GOES and amorphous steel, and it provides the additional time needed to protect and expand domestic manufacturing capacity," said Scott Aaronson, senior vice president of security and preparedness at Edison Electric Institute. "While this is a positive step forward, electric companies today still are facing unprecedented lead times for transformers."

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Overall, distribution transformers are an essential component of the power grid, and will be in higher demand as existing infrastructure deteriorates and electricity demand increases with heavier reliance on green energy. The National Renewable Energy Laboratory recently projected distribution transformer installations will need to triple by 2050.

The firm AK Steel is the sole producer of GOES in North America and manufactures the product at a plant in Butler, Pennsylvania. It's then finished at a facility in Zanesville, Ohio.

Thomas Catenacci is a politics writer for Fox News Digital.

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