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Economical Goals of Life-extending Maintenance

3. SINDRET (Saving Induced by Deferred REplacement of Transformer)

How to use SINDRET: Explanation Tutorial

SINDRET Basic Calculator aims to answer the following question:

  • Is it economically efficient to replace a given transformer by a new unit under the given conditions

or vice versa

  • Is it more profitable to lengthen the service life of a given transformer under the given conditions within the suitable strategy (e.g. FRS - Flexible Response Strategy).

For this purpose SINDRET combines the following:

  • Technical and operational relations concerning the old transformer
  • Investment conditions expressed by the present and future Interest Rate (IR)
  • Technical and economic relations pertaining to the new transformer
  • Technical and economic relations concerning the methods enabling to lengthen the service life of the old transformer

into the form which, by stating the expenses and costs growth over the time, shows the economic efficiency of the chosen strategy, and also reveals its technical feasibility in order to reach the required service life of a given unit.

Technical relations describing the old transformer are expressed in the form of an expert's report - e.g.:

The time-trend relations show the increasing ageing of the cellulose insulants.

Residual Life Expectancy is max. 5 years under present conditions.

The transformer should be immediately dehydrated to increase the dielectric over 60 kV/2.5mm and then continuously degassed and/or hermetized to reduce an ageing process in the solid insulants.

The technical expert examination of mainly larger units is added by the reports of the DGA (Diluted Gas Analysis) and the changes of the furan content in oil.

The results of the expert examination always show the Residual Life Expectancy and other important information specifying which methods of treatment should be employed (the transformer is wet and should be dried).

SINDRET operates with the estimate of the Residual Life Expectancy at three basic levels (high, medium, low) indicating that the given transformer can be operated (after 10, 5, 1.5 years of use) as before until it fails.

Technical and economic relations concernig a new transformer must be provided by the supplier of the new unit. The given specifications for a given unit (40MVA) must contain:

Purchase price PP (€) 320 000.-
Total Replacement Costs (TRS) 390 000.-

Lower losses of a brand new unit constitute one of the primary reasons of the transformer exchange. After installing the new unit the customer can buy or make use of more electricity which would be lost in the form of heat when continuing to use the old unit.

In order to compare the operating costs of the transformer in process and a brand new unit under the given working conditions, we must input other parameters into the following table

Transformer current new
No-Load LossesNLL (kW) 12 10
Load LossesLL (kW) 112 82
Operational HoursOH (hr / year) 8700
Loading RateLR (%) 30
Electricity Sale Price EP (€ /kWh) 0.04


NLL...No-Load Losses ( so called steel or iron losses)
LL...Load Losses (loss in conductors at the max. transformer load - so called copper losses)
OH...Number of working hours per year
LR...Transformer load coefficient (%) --> LR = 100 for max. load
EP ...Electricity Sale Price to a customer

Annual No-Load Losses = NLL x OH (kWh / year) Annual Load Losses = LL x OH x (LR/ 100)2 (kWh / year)

and with the help of the available data, we can obtain the rate of differential savings per year:

  • Δ NLL = ( Annual No-Load Losses of an old unit - Annual No-Load Losses of a new unit) x (kWh price) / purchase price of a new unit
  • Δ LL = ( Annual Load Losses of an old unit - Annual Load Losses of a new unit) x (kWh price) / purchase price of a new unit

The use of Δ NLL and Δ LL values is essential as they are given as relative annual saving costs pertaining to the purchasing value of a new unit (% of purchase price of a new transformer / year), are therefore of the same character as the annual interest rate.

To put it differently - the sum of the values give us so called relative differential loss RDL:
which enables to observe directly the potential gain achieved by the old-new unit loss difference with the interest rate (IR ) considered for the future investment, i.e. the purchase of a brand new unit.

Subsequently, we can make the decisions:

RDL >> IR ... relative losses are a lot of higher that the interest rate (the annual price of the dissipated energy is lot of higher than the adequate payment of the interest rate for the new transformer)
old transformer should be replaced as soon as possible
RDL ~ IR ... relative losses are approx. the same as the interest rate, decision about replacement versus life-extending has to be based on other criteria
RDL << IR ... relative losses are a lot of lower than the interest rate,
application of life-extending methods allows considerable savings

For a reasonable economic decision it is always necessary to colate and process a relatively large amount of information gained from at least five sources:

Bank (and/or your investment department) ... Interest Rate (IR)
Supplier of new transformer ... No-Load Losses (NLL), Full-Load Losses (FLL),
Transformer Purchase Price (PP)
Client (old transformer) ... NLL, FLL, Operational Hours per year (OH),
Loading Rate (LR), Total Replacement Costs (TRC) etc. …
Supplier of electricity ... Electricity Price in situ (EP)
Diagnostic ... Residual Life Expectancy of aging transformer (RLE)

The basic parameters of aging and new transformer (NLL and FLL) are constant , but the other parameters as a IR, EP, OH, LR or RLE may be highly volatile.

It is always necessary therefore to specify long-term projections of potential changes of RDL versus IR.

To limit potential (human) errors, ARS-Altmann have developed a special freeware SINDRET .

The first window of SINDRET enables easy input of all these parameters and all required calculations will flow from this including the time related savings.

In this case it can be seen quite clearly, that the deferred replacement of the old transformer is profitable – we can save ca € 52 000.- ( or 16% of the purchase price of the new transformer) over the next five years.

Sound economic analysis is, almost exlusively, essential before proper management assessment can be taken.

For future profitable transformer operation the relationship RDL << IR should be seen as the only reasonable and proven basis for the management discussion and the subsequent selection of life-extending methods for aging transformers.

Please do not forget - the main factor which can strongly affects the savings is TRC (Total Replacement Costs). The TRC represents here the complete costs of the transformer replacement, e.g. disassembling, environment-friendly disposal of the old unit inclusive the disposal of an aged oil , potential rearrangement of the location, installation of the new unit, transportations - logistics, etc.

Rough estimate of TRC = (1.5 - 2) x PP … i.e. transformer replacement total costs can vary between 150 - 200% of the Purchase Price (PP) of the new transformer .

On the contrary , transformer treatment costs (See : The costs of dehydration, The costs of the long-term reduction of the oxygen content in oil and The costs of the transformer detoxication ) represent the relatively well-defined items, because they should be always stipulated and quaranted by the producer (provider) of the life-extending technology.

In SINDRET are costs of the transformer treatment always and strictly divided into:

  • Treatment Purchase Price - total purchase price of a given technology (or the combination of selected technologies) , which basically represents the investment item.
  • Operational Costs – electricity supply, maintenance, monitoring, exchange of adsorbtion or filter inserts , etc.

For particular examples of the use of SINDRET click on Calculation Examples [PDF] (available only in German language at the moment, english version will be published shortly).

Back to the SINDRET Calculator

Read next: 4. Costs of the transformer dehydration