Have you ever noticed those metal canisters attached to utility poles? Those are transformers. They convert high-voltage electricity from power plants to lower-level electricity that’s safe for homes and businesses. There are 60 million transformers nationwide, and we’re going to need a lot more of them as the U.S. continues to electrify everything from cars to homes.

It turns out the metal that’s inside those transformers matters a lot for energy efficiency.

If the Biden administration is going to meet its climate goals, it needs to look for energy savings everywhere possible, including those electrical transformers that are so critical to the grid. Last year, the Department of Energy proposed using a different kind of metal inside of transformers.

“It would have moved the U.S. to adopt world-leading technology called amorphous steel,” said Andrew deLaski, director of the Appliance Standards Awareness Project, which advocates for energy efficiency.

“We thought the proposed rule was really headed in the right direction,” he said. But some electricity providers, power companies and steel plants disagreed.

Two types of steel used in transformers

For more than 70 years, transformers have been made from something called grain-oriented electrical steel. Amorphous steel is comparatively new.

“The efficiency of amorphous is just simply better, much better than grain-oriented electrical steel,” explained Jun Cui, professor of materials science and engineering at Iowa State University, and a researcher at the Ames National Laboratory.

He explained that the metal inside a transformer is rolled into superthin sheets, or ribbons, and the thinner it is, the more efficiently it conducts electricity.

Amorphous material is naturally thin. “It’s about 30% or 40% thinner than the thinnest electrical steel you have ever seen,” Cui said.

And that means less energy lost when electricity moves through the transformer. That’s why many new transformers sold in Canada and other countries contain amorphous steel.

Supply chain and other issues

But there was a problem with the DOE’s proposed rule: Amorphous material is produced at just one plant in the U.S., Metglas in South Carolina.

Sourcing a new transformer of any kind can already take a couple of years or more, and that could be further delayed if all new transformers had to be built with amorphous material.

Plus, the domestic producer of the older type of steel said the rule could lead to the closure of its plants.

“This is ridiculous,” said Daniel Vicente, Region 9 director for the United Auto Workers, which represents 1,500 steel workers at Cleveland-Cliffs in Pennsylvania and Ohio. 

After a town hall meeting in Butler, Pennsylvania, to outline concerns about the DOE’s proposed rule to union members, he pointed out that while amorphous steel is produced in South Carolina, some of the raw materials are imported from China and other countries. 

Rather than switching all transformers to this newer metal, Vicente thinks the U.S. should ensure there’s enough business to keep traditional steel plants open.

“Why would we cede the last domestic manufacturer of electrical steel for our critical infrastructure?” he asked.

The DOE reverses course

The DOE ultimately walked back the efficiency mandates when it finalized its transformer rule this spring.

Now, amorphous steel will be required in only 25% of new transformers, and the rest can still be made with the older steel.

The DOE’s final rule will reduce CO2 emissions by nearly 85 million metric tons over 30 years. That’s just a third of the CO2 that would have been saved by the proposed rule, according to efficiency expert Andrew deLaski.

“The risk here is that we’re doubling down on old technology,” he said, explaining that transformers can last up to 50 years, so it’s locking in inefficiencies for decades to come.