Table Ill

Table I
Per-Cent Life
Lost per Cycle

Peak
Kva
60
55
50
45
40

.
.

.
.

.............
.............

.............

.............

.............

Per-Cent Life
Lost per Cycle

Peak

Kva

60 . .7.11703
55 . .0.54503
.0.04224
50 .
45 . .0.00365
40 . .0.00033

0.31270
0.03205
0.00348
0.00035
0.00004

Table IV

Table 11

.
60
55
50
45
40

Per-Cent Life
Lost per Year

Frequency

Peak
Kva

per Year

1
0.31270
.
2............... 0.06410
3............... 0.01044
.
.
6............... 0.00210
...
.
.0.00040
...........10

..............

Peak

Economics

per Year

.1.

60

55.

50.
456.

40

2.
3.

1.

Per-Cent Life
Lost per Year
7.11703
1.09006
0.12672
0.02190
0.00330
Total: 8.35901

Total: 0. 38974

indicate that not only the magnitude of

the annual peak load, but also the shape
of the annual peak load cycle, is important
in determining the thermal aging of the
insulating system.
It was found that the significant portion of the thermal aging occurs over a
relatively small portion of the annual
load cycle. For example, Table II
shows that 80% of the total annual
aging occurred during the annual peak
load eycle. Table IV shows that for
the annual load cycle based on the
sample load eycle having a larger load
factor, 85% of the total annual aging
occurred during the annual peak load
cycle. A more detailed breakdown of

Frequency

Kva

the occurrence of significant aging chows

that significant thermal aging occurred
over 0.7% of the annual load cycle shown
in Table II and over 2.1% of the annual
load cycle shown in Table IV.
It was also found that the daily load
cycle having a peak load of 60 kva and
a load factor of 0.521 would result in
the same degree of thermal aging as a
daily load cycle having a peak load
of 54 kva and a load factor of 0. 648.
Even though the second load cycle has a
peak load 10% less than the peak load of
the first load cycle, both load cycles result in the same degree of thermal aging.
This further illustrates the point that the
magnitude of the peak load alone cannot

and Power Transrormer

Design
T. H. PUTMAN

be used as a measure of the degree of

thermal aging; the shape of the load cycle
must also be taken into consideration.

Conclusion
Using a method such as that outlined
in this paper, it is possible to estimate
the per-cent loss of life (and hence the
thermal life expectancy) of a distribution transformer from actual load cycle
data and to evaluate the effect of heavier
loading schedules on the thermal life of
the transformer insulating system.
In the course of developing this method
of calculating transformer thermal life
expectancy, it was found that:
1. The significant portion of the thermal
aging occurring during an annual load
cycle takes place over a relatively small
portion of the annual cycle.
2. A large portion of this significant aging
occurs during the annual peak load cycle.
3. Both the magnitude of the annual peak
load and the shape of the annual peak load
cycle must be considered in life expectancy
calculations.

References
1. THERMAL AGING PROPERTIES OF CELLULOSE
INSULATING MATERIALS, G. Malmlow. Acta
Polytechnica, Stockholm, Sweden, (Electrical Engineering Series), vol. 2, 1948, pp. 7-67.
DETERIORATION
INSULATION
2. ELECTRICAL
TREATED AS A CHEMICAL RATE PHENOMENON,
T. W. Dakin. AIEE Transactions, vol. 67, pt. I,
1948, pp. 113-22.
3. LIFE EXPECTANCY OF OIL-IMMERSED INSULATION STRUCTURES, W. A. Sumner, G. M. Stein,
A. M. Lockie. Ibid., pt. III (Power Apparatus
and Systems), vol. 72, Oct. 1953, pp. 924-30.
4. GUIDING PRINCIPLES IN THE THERMAL EVALUA-~
TION OF ELECTRICAL INSULATION, L. J. Berberich,
T. W. Dakin. Ibid., vol. 75, Aug. 1956, pp.
752-61.

The function to be performed is, of course,

the transformation of electric energy.
Quantitatively a measure of this is the
annual volt-ampere hours, which may be
expressed as:
Annual volt-ampere hours = ET1-IMID 8,760

(1)

MEMBER IEEE

Summary: This paper describes the

constraints which economics places on the
design of power transformers. The mathematical analysis shows how the size, losses,
reactances, and power output are related
when the transformer is optimally designed.
Because of the number of simplifying
assumptions which have been made, this
paper is not a treatise on how to design
power transformers. On the contrary,
it is a broad view of the design problem
which yields findings which are new and

1018

which seem to be borne out by the

experience of transformer design engineers.

The paper confirms the validity of propositions which previously had only empirical
backing.
G ENERALLY speaking, the problem
of designing a power transformer is
one of designing a transformer which will
perform its function at minimum cost.

Paper 63-918, recommended by the IEEE Transformers Committee and approved by the IEEE
Technical Operations Department for presentation
at the IEEE Summer General Meeting and Nuclear
Radiation Effects Conference, Toronto, Ont.,
Canada, June 16-21, 1963. Manuscript submitted January 2, 1963; made available for printing April 8, 1963.
T. H. PUTMAN is with the Westinghouse Electric
Corporation, Pittsburgh, Pa.
The author wishes to acknowledge the valuable
suggestions which he received during the course
of this work from Dr. Clarence Zener, Director of
the Westinghouse Research Laboratories, and E.
C. Wentz of the Westinghouse Transformer
Division.

ics and Power Transformer Design

Pu0tmannEconomnn

DECE-MBER 1963

where
E=volts, output voltage
IM-=amperes, maximum output current
LD = load factor, ratio of average current
to maximum current

Fig. 1. Geometry considered

for the analysis
A

The cost of a transformer includes at

least three terms which should be considered. The first of these is the cost of
manufacturing, installation, taxes, and
maintenance-which may be expressed as
a single annual cost as follows:

Section B-B

$T-dollars, present worth of cost of manufacture, installation, taxes, and maintenance

FT= $/$-yr (dollars per dollar-year), capital

recovery factor

FT$T =$/yr (dollars per year), annual cost

The second annual cost is the cost of
core loss, which may be expressed as
follows:

WNL = watts, no-load loss at rated voltage

$E = $/watt-yr, cost of electric energy

$s w = $/watt, present-worth cost of system

to supply power to transformer

Section A-A

It is the specific cost given by equation

3 which designers try to minimize. The
remainder of this paper is concerned with
an analytical approach to the design
problem.

FS = $/$-yr, capital recovery factor for

Specific Cost as a Function of

Transformer Size and Load

WTNL ($E+FS$S1W)=$/yr,

Equation 3 is the expression for the

specific cost of the transformer. If one
evaluates the economic factors in equation 3, which relate to the cost of utilizing
and supplying electric power, and if he
already has the transformer he intends to
use, then it is a simple matter to determine what load would produce the minimum annual cost per volt-ampere hour.
It is now desired to remove the constraint
that the transformer has already been
designed; this introduces additional degrees of freedom in equation 3, because
$T, WNL, and RT (all of which appear in
equation 3) depend upon the design.
These quantities must now be expressed
in terms of design parameters. In order
to make the problem tractable, several
assumptions are necessary which will become evident in the following develop-

present worth of system required to

supply power

annual cost of
supplying no load loss

The third component is the cost of

copper loss, which is computed in a manner similar to the core loss.
-A

amperes, maximum value of rms load

current during year

LS = loss factor, ratio of average value of

squared current to ',2

RT=ohms, transformer winding resistance

referred to winding in which IM flows

LSIM2RT = watts, average valuie of copper

loss

FS$s;wIM2RT+$SBLSIM2RT= $/yr, annual

cost of copper loss

The total annual cost of the transformer is the sum of the three cost terms
defined above, or

FT$T+ WNL($E+FS$SIW)+
IM2RT(FS$s/W+LS$E)

(2)

The specific cost of the transformer, C,

can now be defined as the ratio of the
annual cost as given by equation 2 to
the annual volt-ampere hours as given by
equation 1:
C= [FT$T+($B+FS$SiW)WNL+

(LS$E+ FS$S,W)IM2RT] lETIMLD 8,760

DECEMBER 1 963

geometric factors but with different values

of t will be geometrically similar. Although the relationships given in Appendix I have been derived for the transformer shown in Fig. 1, they are equally
valid for any transformer.
It now remains to express $T, WNL, and
RT in terms of the design parameters and
material properties. In Appendix II the
installed cost of the transformer, $T, iS
given as follows:

ST = (k3diS1 k2S2)t3+$etc

The essential feature of this expression

is that the installed cost of a transformer
can be expressed approximately as a
constant term, $etc, plus a term which
varies as the transformer volume, P. One
can check with Appendix II to find out
the exact significance of the various
constants.
In Appendix III the iron and copper
losses of a transformer are expressed by:

(5)

Pi=wdiVi=wdiS1t3

/ 4W A2
pV
Pch
2 \A C2 / CBA i

ment.

Fig. 1 shows the idealized transformer

considered here and the dimensions which
determine its physical size. Appendix I
shows that the core and coil areas
and volumes can be expressed in terms of
one dimension which is taken to be the
width of the tongue t and several other
dimensionless numbers or geometric factors which are functions of the proportions of the transformer and are generally
designated by the symbol Sj. The dimension t is a measure of the size of the transformer. All transformers with the same

(4)

.SW
2B2

)t-I

S32S42}

(6)

In equation 5 w is the iron loss in watts/kg

(kilogram), dt equals the density of the
iron, and Vi is the volume of the iron. It
is assumed, therefore, that the iron loss
is proportional to the volume of the transformer, P.
Equation 6, which expresses the copper
or load loss, looks a bit more formidable,
but in reality is easily understood. The
factor (pVI/A,2) is simply the resistance of
a single turn which occupies the same

(3)
Putman-Economics and Power Transformer Design

1019

c0< c,<c2<C3

(Fs$siw+Ls$SE) (

2B2-)

(S32942) t~ / {ETIM8,760LD (10)

IM.

Fig. 2. Load current versus size with the

specific cost as the parameter

space as the actual transformer windings

and which has a resistivity p. The total
volume of the transformer coils is V,,
and the window cross-section area is A,.
In the factor (4W/wBAi), the angular
frequency is wo radian-seconds-', peak
flux density is B webers/meter2, the core
cross section is A im2, and the transformer
output is W volt-amperes. The peak
voltage per turn of the transformer is
wBA j, and therefore (4W/cwBA i) can be
shown by simple arithmetic to be twice
the current which passes through the
transformer window in either winding.
Consequently the expression for P, is
simply the loss of a hypothetical singleturn winding which has the same average
current density as the actual transformer windings.
It is assumed that the no-load loss,
WNL, equals the core loss, Pi. Therefore,

(7)

TVVL=Pi=WddjSlt3

Equation 6 may be used to evaluate RL:

R=PC

RL'2

8p W2

IM2 \w2B2

S2

(S2S42St

(8)

The numerator of equation 10 shows that

there are two types of costs: one dependent, the other independent of the load.
The cost which depends on the load is
a result of copper loss and shall be
called "copper-loss cost." Those which
are independent are of two types. The
first is dependent upon the volume of the
transformer and shall be called "fixedvolumetric cost," while the second is independent of volume and shall be called
"fixed costs."
Assuming that the geometric factors of
the transformer are kept fixed, we wish
to see how the transformer size, t, and the
load, IM, influence the specific cost of
operation. One way to discover this is
to plot the relationship defined by equation 10 between IM and t for fixed values
of C as shown in Fig. 2. Fig. 2 shows
that there is no one combination of
t and IM which produces minimum
specific cost. However, it is seen that if
the transformer size is fixed then there is a
value of IM which gives minimum specific
cost. However, at that value of IM there
is another, larger, transformer which will
have even lower specific cost.
Evidently there are two points of view
from which to choose. Assuming that
the size is fixed, the load which will give
minimum specific cost can be found if
1C

-=0

If the indicated mathematics is carried

out, the condition for minimum specific
cost is found to be
copper-loss cost } = { fixed-volumetric cost +
fixed costs } ( 11)

The expressions for $T, WNL, and RL

given by equations 4, 7, and 8, respectively, may now be substituted into equation 3 to yield an expression for the specific cost, which depends both upon the
load IM and design of the transformer.

The other point of view is to assume the

load is known and to find the transformer
size which results in minimum specific
cost by requiring that
0

C= {FT[(k3diSi +k2S2)t3+$etc] +

The result of this calculation shows the

condition for minimum specific cost is

wdiS1t( FS$s,w+$E)+
(8pET2IM2)\( S2 \t-5(Fs$s+

fixed-volumetric cost } (12)

C= { [FT(k3diSl+k2S2)+

(FS$s,w+$E)wdiSolt3+ FT$etc+
1020

(9)

(Fs$s,w+Ls$E)

(8pET

w02B2

s2

S32S42/

=3/5{ FT(k3diSl+k2S2)+
(Fs$s,w+$E)wdtSI}t3 (13)
Inspection of equation 13 shows that the
constraint is one which relates the transformer size, t, to the load, to certain material properties, to operating conditions,
and to economic factors. From this constraining equation a number of interesting
facts concerning power transformers can
be deduced.
VARIATION OF TRANSFORMER VOLUME
WITH RATING

If one imagines equation 13 to be solved

for t, then it is evident that
t

(ETIm)114 cc W1/4

The volume of the transformer varies as t3,

and therefore the volume of a transformer
must increase as its rating to the threefourths power.
INFLUENCE OF CHANGES UPON DESIGN

If the size, t, is considered the measure

of the design, equation 13 shows the influence of various factors. Generally,
any change which tends to increase the
copper-loss cost is counteracted by an
increase in the size, which tends to reduce
the cost again. Also, any change which
tends to increase the fixed-volumetric
cost is counteracted by a reduction in size,
which tends to counteract the increase.
COPPER LosS AND IRON Loss

From equation 13 and the expressions

obtained for the copper and iron losses
in Appendix III, we can easily show that
the ratio of copper loss to iron loss is
PC

{copper-loss cost } = 3/5

w02B2 / k32S42) -(ssw

LS$E) }/{ETIM 8,760 LD

=0

former size chosen will minimize its

specific cost for a specified load. This requires imposition of the constraint given
by equation 12. By identifying the fixedvolumetric and copper-loss costs in the
numerator of the right-hand member of
equation 10, one can write the minimizing
constraint in detail.

Significance of the Minimizing

Constraint

From the above discussion the relationship between transformer size, load, and
specific cost should be clear. In the
following it is assumed that the trans-

Pi
3/5 1FT(k3dS0 +k2S2)+(FS4SW+$E) wdiS1J

wdiSo[Fs$s,w+LS$EI

If the loss factor is unity, then

Pc

Pi

3 fixed-volumetric cost
5
core-loss cost

It is apparent, therefore, that the copper

loss to iron loss ratio is a constant (independent of transformer size) and de-

Putman -Economics and Power Transformer Design

DECEMBER 1 963

pends upon economic and geometric

factors and the watts/kg loss of the iron.
INFLUENCE OF THE VOLTAGE LEVEL
In the derivation of the copper loss of
Appendix III it was assumed that the
tranformer coils were made of a homogeneous material with a resistivity p and
that the current was uniformly distributed
across the cross section of the windings.
In reality, part of the cross-section area is
insulation; therefore the current does not
flow uniformly. However, as far as
losses are concerned,the real situation can
be represented by a single-turn homogeneous coil with an equivalent resistivity,
which is related to the actual resistivity
of the conductor by the expression p/(1-f) where p is the actual conductor
resistivity and f is the fraction of the
winding cross-section area which is insulation. This can easily be seen on an intuitive basis by considering the limiting cases
when f is zero and one.
As the effect of increasing the voltage
level of a winding is always to increase the
fraction of the area used for insulation,
the equivalent resistivity of the winding
must increase also. Since this tends to
increase the copper-loss cost, the design
must react in such a way as to reduce the
copper loss; that is, the transformer size
must increase. The over-all effect of
increasing the voltage level will be to
produce a larger transformer with a higher
specific cost.
WINDING CURRENT DENSITY
It has been shown that the ratio of
copper loss to iron loss is fixed. Since the
iron loss varies with the volume of the
transformer, the copper loss must do so
also. The only way this can happen is
for the winding current density to be constant. This explains why the cooling
problem becomes more critical in large
transformers. The amount of heat to
be dissipated increases as the volume, t3,
while the surface area to dissipate the
heat increases as t2. Therefore, the heat
dissipation per unit area must increase

with transformer size.

VARIATION OF PER-UNIT REACTANCES

WITH POWER RATING
The base ohms of a transformer referred
to any winding varies as the square of
the number of turns of that winding.
One can imagine that the magnetic
field produced by the winding consists of a

number of tubes of flux and that the total

inductance of the winding is the sum of
the inductance resulting from each tube
of magnetic flux. The inductance pro-

DECEMBER 1963

duced by a single tube varies as the square

of the number of turns of the winding and

as the permeance of the path formed by

the tube. Since the base ohms varies as
the square of the number of turns of the
winding, the contribution to the reactance,
expressed in per unit, resulting from any
tube of flux varies only as the permeance
of the tube. As the size of the transformer increases, the permeance of the
tubes of flux increases in direct proportion
to the size, t, because permeance varies
directly as area and inversely as length.
Therefore, the per-unit reactance resulting
from a tube increases in proportion to t.
Some of the tubes may be considered
to contribute to the exciting reactance
and others to the leakage reactance.
Since the per-unit impedances of the tubes
which make up these reactances vary as t,
the reactances themselves must vary as t.
Equation 13 shows that the transformer
size, t, varies as the power rating to the
one-fourth power. Therefore, the reactive components of the per-unit exciting
and leakage impedance must also vary
as one-fourth power of the rating.
It is well known that the per-unit
exciting current of transformers diminishes as transformer size increases. However, it is not so well known that the percent leakage reactance will also increase
unless design changes are made to counteract this undesirable effect.
OPTIMUM TRANSFORMER PROPORTIONS
In the foregoing analysis it was assumed
that the geometric proportions of the
transformer were fixed. It is of interest
to note that, although the optimum size
depends upon the loss factor, LS, and is
independent of the load factor, LD, the
optimum geometric proportions are independent of both the load and loss factors. This is most easily shown by starting with equation 10 and computing the
minimum value of the specific cost by
inserting the value of t given by equation
13. The result has the following form:
Cmin= {( ... )(S2S3-2S4-2B-2)3.8

[FT(k3diSl +k2S2) +( FS$S/W+$E)

wdtSl 6/8 +FT$,etc } /{ ... ( 14)

where the factors which have been
omitted involve the load and loss factors
but do not involve any geometric factors.
Now it is clear that the set of values for
the geometric factors which produce the
optimum value of the specific cost is
independent of load or loss factors.
OPTIMUM VALUE OF FLUX DENSITY
It was also assumed in the analysis
that the flux density, B, was held fixed.
One might possibly decrease the specific

cost of a transformer by using a value of B

other than the maximum possible for the
core material as determined by exciting

current or noise. Equation 14 may be

used to look into this problem. First
of all,it isnoticed that increasing the value
of B would reduce the specific cost except
for the fact that as B increases the core
loss, w, also increases, which tends to
increase the specific cost. It is apparent
that the flux density should be increased
up to the point that any further improvement in the specific cost by increased flux
density is undone by increased core loss.
The location of this point can be determined by examination of the expression
U= B -4[FT(k3diSl+k2S2) +

(Fs$sIw+$E)diS1wI5/8 (15)

which comes from equation 14. The

flux density should be as high as possible
without violating the constraint d U/dB <
0. Differentiation of equation 15 shows
that this constraint is equivalent to

dw/dB. 6< 1 FT(k3diSl4-k2S2) /1+-w (16)

B
5 \B( Fs$s,w+$E)diSl
As an example of the use of equation 16,

the optimum flux density for a typical

design will be deternmined.

FT=0.15 $/$-yr

FS$S8W +$E

0.006 $/kilowatt-hour

= 0.0525

$/watt-yr

di= 7.8 X 103 kg/mneter3

k2= 0.075 $/inch 3=4.58 X 103 $/meter3
k3 = 0.30 $/pound = 0.661 $/kg
S1 = 5.57 (assume a1=

a2=

a3 = 1)

S2= 7.14 (assume al = a2 = a3 = 1)

Using these values, equation 16 becomes
dw-< 4.84 +1.2 -w
B
dB B

(17)

For a particular modern transformer

steel, equation 17 is satisfied as an
equality for B = 1.67 webers/meter2, w =
2.27 watts/kg, and dw/dB=4.53 wattmeter2/kg-weber. Therefore, B = 1.67
webers/meter2 is optimum for this particular example. Furthermore, because
dw/dB changes so rapidly in the range
1.60<1.75 webers/meter2, it is likely that
the optimum flux density will lie in this
range for almost any design.

Results
The results of this paper can be summarized by a series of statements of the
facts which have been analytically shown
to be true about power transformers:

Putman-Economics and Power Transformer Design

1021

1. Given the load to be supplied, a transformer size can be determined which has a
minimum specific cost. An increase in
the load reduces the specific cost up to a
certain point. However, for this new
load there is a still larger transformer which
will be more economical.
2. The volume of the optimum transformer should increase as its power rating
to the three-fourths power.
3. Any change which tends to increase
the fixed-volumetric cost will be counteracted by a reduction in size. Any change
which tends to increase the copper-loss
cost is counteracted by an increase in size.
4. The copper loss and iron loss bear a
fixed ratio independent of transformer
rating.
5. High-voltage transformers have a higher
specific cost than low-voltage transformers
of the same rating.
6. The winding current density is independent of transformer size.
7. All per-unit reactances of transformers
tend to increase as the rating to the onefourth power. Apparently the leakage
reactance is kept in bounds by changes in
geometry and winding design in larger
transformers.
8. The optimum proportions of a transformer are independent of its load.
9. The optimum flux density for most
transformer designs probably lies between
1.60 and 1.75 webers/meter.2

Fig. 1 shows the transformer considered

in this paper. The important geometric
constants of the transformer in terms of
its dimensions are as follows:
Mean turn length:
a

( 18)

Mean flux path:

If = 2(b +a)+27r - =2(b +a) + - t

4
2

(19)

(20)

Volume of iron:

Vi =2d -, 1J= dt 2(b +a)+ 2 t]

(21 )

Coil area:

A,c-ab

A s=at2S4t2

(22)

(25)

Several new geometric constants are introduced in equations 25 whose definition is

self-evident.

Appendix 11. Evaluation of the

Installed Transformer Cost

The current density, j, can be related to

the volt-ampere rating, W, in the following
manner. Let
W= volt-ampere rating
Ai=meter2, cross section of iron
B=webers/meter-2, maximum flux density

(peak value)

= radian-second -1, angular frequency

Ae=meter2, cross section of copper

j = 4W/wBA cA i = 4Wl/wBS4S3t4

(1) Cost of core:

Therefore,

k3=$/kg, cost of iron

Pc = (8p12/co2B2)( VC/AC2A i2)

di=kg/meter3, density of iron

Pc =

Vi=tmeter3, volume of iron

where the volumes and areas are expressed

in terms of t and the geometric factors are
defined in equations 25 of Appendix I.

We assume that the cost of the core varies

directly with the core volume. Therefore,

W=

j-ccA iB

2 2

(8pW2/c,2B2)(S2/S32S42)t-5

(28)
(29)

(30)

Core cost = k3dj V-=k3d jSt3

where Vi is expressed in terms of SI and t
as shown in Appendix 1.

k2= $/meter3, per-unit volume cost of coils

V= meter3, volume of coils
Therefore,
Coil cost = k2 V, = k2S2t3
where Vc is expressed in terms of S2 and t
as shown in Appendix I.
The installed cost of the transformer
can now be expressed in terms of the cost
components which have been defined.

$T=k3d1SiI3k2S2t3$etc

Appendix Ill. Calculation of

Losses
Iron Loss
Let w equal the watts/kg loss in the iron,
and Pi equal the total watts loss in the iron.
Then

At=dt

where the expression for Vi is obtained from

equation 21 of Appendix I.

(26)

Copper Loss
Let

a2 = b/a

(27)

The installed cost of the transformer is

$T. This cost can be expressed as the sum
of the cost of the core, the cost of the
winding, and certain miscellaneous costs.

Pi=wd1 Vi-=wdiSt3

a =d/t

copper loss
V= meter3, volume of copper
then

PC== 2-j2pVC

Iron area:

(23)
The following are the dimensionless
geometric factors:

P,= watts,

Vz= a, [2(a2+1)a3+ 7r/2]t3= Slt'

A c = a2a32t2 S3t2

where $ete is the miscellaneous charge.

Volume of coils:

V, = abl t = ab [2(d +t) + ra]

VC2a32[2(al+1)+7ra31t3= S2t0

(2) Cost of coils:

It is assumed that the cost of the transformer windings varies in proportion to
their total volume.

Appendix 1. Geometry of
Transformer

It -2(d 'rt) +r27r 22 2(d + t) + 7ra

By usinig equations 24, the coil and iron

volumes and areas can be expressed in
terms of t and geometric factors.

j=amperes/meter2, current density in the

coil (peak value)
p=ohm-meters, resistivity of coil material

Discussion
Paul H. Jeynes (Public Service Electric
and Gas Company, Newark, N. J.): The
procedure described in this paper may
well be accepted as the classical approach
to economic transformer design. It proposes no drastic new departures, but does
organize the reasoning better than has been
done before.
Because it is thus authoritative, it is
desirable to have the numerous formulas
expressed in unmistakable dimensional
units, so they can be conveniently quantified in practical applications of the analysis.
The author has recognized this, and has
taken pains to indicate the units of measurement along with the definition of each term
in words.
However, his presentation starts with
definitions of three basic concepts:

(1) $T=dollars, present worth of cost of

manufacture, installation, taxes,

and maintenance
(2) Fr=$/$-yr, capital recovery factor
(3) F7$T=$/yr, annual cost
One's first reaction is that: (1) is incorrect,
(2) is inadequate, and (3) therefore is not
very helpful. This situation could be
remedied, but it demands some explanation.
It is implicit in this approach, though not
specifically stated, that the user is going
to make a choice between proffered designs
which, at the price purchasable from
manufacturer, will accomplish two simultaneous financial objectives:
1. Maximize his profit margin out of
given sales and revenues from his customers.

a3= a/t

(24)

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Putman-Economics and Power Transformer Design

DECEMBER 1 963

2. Permit minimizing the price he must

charge his customers (revenues) for given
sales, to obtain a given profit margin.
In other words, the user of a transformer
looks to the effect of his purchase of a
unit on the revenues he must obtain from
his customers, whether he is a public
utility or a nonregulated business. Accordingly, he does not care what it costs
to manufacture the unit; he needs to know
what he must pay the manufacturer.
His purchase price may be a function of
the cost to manufacture, but it is not one
and the same figure, as the definition of
$T seems to say.
Also, purchase of a transformer means
that the user must collect from his customers a good deal more than: its purchase
price, installed, plus present worth of
lifetime taxes, plus present worth of lifetime maintenance. He also incurs engineering, accounting, administrative, supervisory, and storeroom expense. He has
costs of advertising, billing, and collecting.
And he has working capital requirements.
All this is to be obtained via revenues from
his customers.
We all know the answer-FT$T is not
"annual costs," as defined in the paper.
It is the difference in revenue requirements
resulting from purchase and use of transformer. The items omitted from the
definition of FT$T are assumed to be
identical regardless of transformer design.
Why be stuffy about this?
Because sometimes items conveniently
ignored, being assumed "the same in any
event," are not really the same in any
event; which points up the fact that FT,
capital-recovery factor, is inadequately
defined.
The ultimate net salvage of a transformer is typically large, whether the unit
is sold for future use by another owner or
is scrapped for its large metal content.
Net salvage value is not a revenue requirement; it does not come from customers,
but from the junkman. Accordingly, the
definition of FT must indicate whether or
not adjustment has been made for ultimate
net salvage. It may amount to 25% of the
unadjusted figure, which makes a difference, not only in the present-worthing
calculation, but also in the estimate of
income tax.
Revenue requirements, to come from
customers, include:
1. Minimum acceptable return on capital
investment (i.e., on purchase price, including installation cost).
2. Depreciation (i.e., recovery of that
initial investment less ultimate net salvage).
3. Taxes.
4. Maintenance.
The present worth of items 1+2 (the
revenue requirement for return and depreciation) is exactly equal to the initial
capital investment if (1+2) is divided by
the capital-recovery factor adjusted for

salvage.

The present worth of items 3+4 is equal

(3+4) divided by the capital-recovery
factor not adjusted for salvage.

to

DiECIRMBIER 1963

Note also that item 1 is neither average

nor actual nor desired nor permitted per-cent
return. It is the minimum acceptable
"bare-bones" cost of mnoney, "threshold
of confiscation" rate of return; whether
the user is a public utility or not. That
may make a difference of 16% or more
(1% out of a typical figure near 6%) in
item 1.
Another slightly confusing usage is the
symbol $etc. In Appendix II it is referred
to as "the miscellaneous charge;" but it
is not what accountants refer to as a
miscellaneous expense. It is said (in
equation 4) to be a specific fixed component
of $T, which is in terms of present worth.
The quantity $s,w, described as "present
worth of system to supply power to transformer" cannot be said to be completely
wrong; but it is an inadequate definition
of the author's exact intent, which defies
practical evaluation. It would seem desirable to include at least a reference,
indicating exactly how the author intended
it to be quantified.
In general, this paper is so valuable
that it would seem worthwhile to make
such small but important refinements.

T. H. Putman: Mr. Jeynes' discussioin

serves to bring to the forefront a number
of points which may not be clear to all
readers.
In the sale and application of a power
transformer there are two problems: one
solved by the user and the other solved by
the transformer manufacturer. The user
must decide from among the many transformers offered for sale by different manufacturers which will be the most economical.
This is a standard type of engineering
economy problem, and the general method
of attack on such problems can be found
in reference 1. Generally one prepares
payment schedules for the various alternative transformers. These schedules may
differ both in the timing and amount of
payments. The salvage value is; as Mr.
Jeynes indicates, an important factor, but
may be considered as a negative paynment.
Some method must be used to reduce the
various payment schedules to a common
basis of comparison in order to determine
which is the most attractive. This can
be done by finding the present worth of
each schedule of payments or by reducing
each payment schedule to a series of equal
annual payments to be made over the life
of the equipment. If the lives of the
transformers can be considered to be the
same, then a direct comparison of present
worths is adequate. If the transformers'
lives are different, then the equal annual
payments should be used for comparison.
This is the transformer user's problem,
and the solution yields the transformer
which he should purchase.
The problem of the manufacturer is as
follows: There is not just one transformer
which he can build which will satisfy the
technical requirements of his customer.
Transformers can be built with high load
losses and small physical size or low load
loss and large physical size and all gradations between these extremes. In other

words, a manufacturer can build a whole

series of transformers to supply a specific
load, and his problem is to determine which
transformer fromi the series will be most
economically attractive to the customer.
This paper shows a sound, scientific means
of arriving at the optimum design.
As one might expect, certain modifications must be introduced to adapt the
method to any specified situation, and these
can be easily worked out. However, there
are several requirements if the method is
to be meaningful. First of all, power
companies must be able to evaluate the cost
of losses-both the energy component and
the demand component. These cost components are designated by the symbols
$E and Fs$s1w, respectively, and have
the units $/watt-yr. Some of the literature
available on this is indicated as references
2 and 3.
Second, it is assumed there is a close
relationship between the price of a transformer to a customer and its cost of manufacture. The present worth of all costs
of a transformer to a user exclusive of the
costs of losses is $T; and FT, when multiplied
into $T, converts $T into a series of equal
annual payments over the life of the
transformer. $T is adjusted for salvage
by subtracting from the present worth of
all costs the present worth of the salvage
value. In other words, the salvage value
may be considered a negative cost. Now
one part of $T is well defined: the core
cost and the coil cost, which are
evaluated in Appendix II. Although it
is not so stated in the paper, these costs
may reflect their salvage value as well as
the cost of manufacture.
All other costs which make up $T are
lumped into $,t,, and evaluation of this
is of no great importance since it does not
enter the actual computation of the optimum transformer design.
In designing a power transformer a
manufacturer can vary its physical size
and thus influence the load losses, the core
losses, and the cost of the core and coils.
As the paper shows, a variation in the size
results in a change in the cost of the transformer, whether it is evaluated on an
annual charge basis or on a present-worth
basis. The proper size or design is the
one with minimum cost since this particular
design will be the most attractive to a

potential customer.
The optimization assures the manufacturer that he has the best design possible
within his particular manufacturing cost
structure. It, of course, does not assure
him of successfully meeting competition
since this depends upon the manufacturing
cost structure, which is different for different
manufacturers.
REFERENCES
1.

PRINCIPLES OF ENGINEERING ECONOMY (book),

E. L. Grant. The Ronald Press Company, New

York, N. Y., 1950.
2. EVALUJAT10N OF CAPACITY DIFFERENCES IN
ECONOMIC COMPARISON OF ALTERNATIVE FACILI-

TIES, Paul H. Jeynes.

AlEE Transactions, pt,

Systems), vol. 71,

III (Power Apparatus and

Jan. 1952, pp. 62-80.

3.

A FURTHER LOOK AT COST OF LOSSES, C. J.

Baldwin, C. H. Hoffman, P. H. Jeynes. Ibid.,

vol. 80, 1961 (Feb. 1962 section), pp. 1001-08.

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