The electric system is designed so that when you flip a light switch, it comes on every time, and you barely think about it. However, that convenience is only possible due to a massive engineering feat, often called “the world’s largest machine.” This vast, interconnected network of power plants, transmission lines, substations, and control systems relies on essential devices, called transformers.
Transformers are critical to delivering electricity efficiently. As new technologies like electric vehicles (EVs) add a significant load to the grid, utilities are turning to a strategy called EV managed charging. This approach involves shifting when and how EVs are charged to reduce stress on the system.
One key advantage, particularly at the local distribution level, is that it can help avoid installing new transformers, which are costly and often have long lead times.
What are transformers?
Transporting electricity results in power losses or “line losses,” which are significant at lower voltages. This is the level at which most electricity is consumed, and the losses make moving power over long distances uneconomical without intervention.
However, at higher voltages, line losses are much smaller. Transformers adjust, or “transform,” the voltage of electricity, stepping it up for efficient long-distance transmission and stepping it down for safe use by end-users such as households and businesses (Figure 1).
Figure 1. Transformers regulate voltage as electricity moves from generation to end use, enabling efficient delivery to homes and businesses. With more EVs connecting to the grid, distribution transformers face new demands that make managed charging strategies increasingly valuable. (Image: EE Power School)
Why are transformers important?
The ability to transport electricity over long distances has always been important. Historically, it has been more efficient and cost-effective to build one large power plant to serve a broad geographic area rather than many small, localized plants. The rise of renewable energy has made transformers even more essential.
Renewable energy developers must locate wind, solar, or hydroelectric facilities where natural resources are most abundant. From there, electricity often needs to be transported many miles, even across state lines, to reach the areas where it will be consumed.
The book “Superpower: One Man’s Quest to Transform American Energy” discusses the significanc of transporting electricity. The book follows Michael Skelly as he tries to connect wind resources in the panhandle of Oklahoma to customers in Tennessee and beyond. The technology underpinning that effort is only possible thanks to transformers, which allow the electricity to be transported over great distances.
Transformers are also critical to any electricity end-user. The voltage must be stepped down before it’s usable for most purposes. This includes EV chargers, for example, which depend on local distribution transformers to deliver the proper voltage for safe, efficient charging at homes, businesses, and public stations.
A transformer shortage
A recent article by Bloomberg Green describes the soaring demand and limited supply for transformers. The rush to build renewable energy, new manufacturing plants, and data centers has led to an unprecedented demand for transformers. The rapid construction of these facilities is critical to national security as the United States is in a race to produce advanced microchips, artificial intelligence, and new domestic supply chains.
However, the supply of new transformers is limited. Transformers are complicated devices to manufacture, and the construction of new facilities takes years (while also requiring transformers to run).
All of these factors have resulted in an acute shortage of transformers. A February 2024 NREL report found that “utilities are experiencing lead times for transformers up to two years (a fourfold increase on pre-2022 lead times) and reporting price increases by as much as four to nine times in the past three years.”
The impact of tariffs
The Niskanen Center, a think tank, reports that “Approximately 80% of [large power] transformers are manufactured abroad.” Similar statistics for smaller transformers could not be found, but a large percentage are also likely imported. Even when transformers are produced domestically, they’re often made from imported metals.
Transformers are made with a specific type of steel called grain-oriented electrical steel or GOES. As reported by Heatmap News: “There’s only one domestic producer of GOES — Cleveland Cliffs — and at full capacity, it cannot meet even half of the demand from domestic transformer manufacturers.”
There is an alternative to GOES, called amorphous steel, which is more efficient. However, there’s similarly only one plant in the US that can produce amorphous steel, which also cannot meet current demand. The supply chain concerns for amorphous steel were so acute that last year, the Biden administration walked back a requirement requiring greater efficiency of transformers by using more amorphous steel.
The new tariffs will increase costs, whether the transformers are produced domestically or imported. These costs will ultimately flow to utilities, industrial producers, renewable energy developers, and the broader economy.
How EVs can cause transformer overloads
When a typical Level 2 EV charger is in use, it can draw more power than the rest of a household combined — effectively doubling the home’s electricity demand. The local distribution system was not designed for these rapid spikes in power demand.
Figure 2. Secondary transformers, whether mounted on poles or placed in ground-level enclosures, are the final step before electricity reaches homes and small businesses. As more vehicles are charged at home, these transformers face a higher risk of overload without proper charging management. (Images: Prolec | Wikipedia)
The first components to become overloaded during such occurrences are secondary transformers. These are the smallest transformers in the system, responsible for stepping down voltage before electricity reaches a home. These unassuming devices are critical to everyday life and are at risk of failing if EV charging is unmanaged (Figure 2).
Based on conservative estimates, just one EV charging per household at the same time could overload a neighborhood’s secondary transformer — based solely on EV demand. If non-EV electrical loads are high, even fewer EVs may be enough to exceed the transformer’s capacity.
Fortunately, there is a solution. Managed charging provides a practical and effective way to prevent these overloads.
Protecting transformers
Managed charging, particularly distribution-optimized charging, carefully coordinates EV charging to avoid overloading transformers or other distribution assets. This approach helps extend the useful life of these components by many years.
Grid-aware EV-managed charging refers to systems that respond to real-time signals from the electric grid, allowing EV charging to adjust dynamically based on total demand, including non-EV loads. This coordination helps prevent transformers from becoming overloaded.
In the below example from Portland General Electric, peaks on the distribution system are reduced from 85 to 40 kW by limiting the simultaneous charging of EVs (Figure 3). When a grid signal for non-EV load is also integrated, the optimization engine can shift EV charging away from periods of high overall demand. As a result, EVs often contribute nothing to the distribution system’s peak load, significantly reducing the frequency of transformer overloads.
Conclusion
Extending the life of transformers will save all electric customers billions of dollars. Beyond the immediate economic benefit of deferring grid infrastructure upgrades, helping alleviate the national shortage of transformers will increase grid reliability and help bring more renewable energy and manufacturing facilities online faster, enhancing our industrial progress.
Moreover, producing and transporting exceptionally heavy transformers (which can weigh more than two blue whales) generates significant carbon-dioxide emissions. Managed charging solutions that mitigate the need for transformer replacements will directly reduce carbon emissions.
As EV adoption accelerates, transformer capacity at the neighborhood level will face increasing pressure. Managed charging offers a practical way to ensure an increase in EVs does not compromise grid reliability. By coordinating when and how EVs are charged, utilities can extend the life of critical equipment, integrate more renewables, and keep electricity affordable for everyone.
This is a win-win for the economy and the environment.
Filed Under: Charging, FAQs, Vehicle-to-Grid (V2G)