CWIEME Chicago Geopolitical Impact on Global Transformer Industry. Ben Ehmcke Ehmcke Consulting LLC 10/11/2016.

Transcription

1 CWIEME Chicago 2016 Geopolitical Impact on Global Transformer Industry Ben Ehmcke 1

2 Topics Efficiency Standards Protectionism Environmental GOES Capacity BREXIT 2

3 Global Transformer Market Global transformer market expected to grow 6.7% by

4 Market Shifts Paris Climate Accords Power Generation Away from Coal, Oil & natural Gas Toward Wind, Solar, Tidal, Hydro-Electric Efficiency Standards Effect all sectors that use electricity Commercial and residential 4

5 Efficiency Standards United States 2016 Standard 2020 U.S. Standard?? Asian Standards EU 2020 Standard The Next EU Standard India Import Rules Developing Nations 5

6 Efficiency Standards United States 2016 Major Impact Dry Type Transformers Liquid Immersed Standard based On M3 Dry Type Standard based on Single Phase M6 Three Phase M4 Many Manufacturers asking for M3 for cores Movement by Dry Type away from stacked core toward wound cores Cores are annealed 6

7 Efficiency Standards United States 2016 No impact on Power transformers United States 2020?? Growing Environmental Concerns Will it be Court Mandated Will it follow the EU Standard Involve all transformers IEC lobbing IEEE and DOE 7

8 Efficiency Standards Japanese Standard New standards late 2014 Primary impact distribution transformers Efficiency levels higher that U.S Requires GOES grades M3 through amorphous Remainder of Asia Pattern standards after Japan South Korea standard similar to US

9 Efficiency Standards EU 2020 Efficiency Standard Effective January 1, 2020 Impact all transformers Minimum efficiency 99.5% Phase-in starting in 2016 Requires Distribution Transformers M2 & Amorphous Power Transformers M3 or better, laser or mechanically scribed 9

10 Efficiency Standards EU 2030 Efficiency Standard September 2016 Committee formed to develop 2030 EU Energy Efficiency Standard Covers Energy Generation Energy Distribution Energy Usage Residential Commercial 10

11 Efficiency Standards India Fall 2015 Indian Parliament asked to ban import of inferior grain oriented electrical steel No scrap from foreign transformer manufacturers or mills No new material with electrical properties worse than M4 December 2015 Indian Parliament asked to ban import of all transformers manufactured using inferior grades of grain oriented electrical steel 11

12 Efficiency Standards Developing Nations» Asking for distribution transformers to highest international standards» Prefer some of the manufacturing done in country 12

13 Efficiency Standards Impact on Transformer Design o Distribution Transformers o Move away from Stacked and C cores o Move toward Distributed Gap Wound Cores o Move toward all cores being annealed o Growing demand for better grades of GOES o Shrinking demand for grades with electrical properties worst than M4 o Shrinking demand for laser scribed materials in distribution transformers 13

14 Protectionism United States 2014 Failed attempt by AK Steel & Allegheny Technologies 2015 ITC adds import codes for Wound Cores and Stacked Cores used in transformers 2016 Continues duties on power transformers from South Korea 2016 Duties on Hot Rolled Carbon Steel Grain Oriented Electrical Steel included 14

15 Protectionism European Union 2015 Implements duties on imported GOES India Ban on the import transformers made with inferior grades of GOES Ban on import of inferior grades of GOES China Bans imports from Japan Disregards WTO ruling to allow GOES imports from US 15

16 Protectionism Pakistan 2016 Implements duties on imported GOES Rumors that U.S. may take another look at imported GOES and this time include imported cores. 16

17 Environmental Wind & Solar New design power transformers Buried Distribution US Reduce power loss from storms EU Reduce power loss from storms Prevent damage to the country side 17

18 Environmental Buried (Cont.) Transmission UK 300 kilometers buried Transmission lines from wind farm projects Eco-Friendly Issues Bio-Oils Many provinces in India require Bio-Oils Re-Refined Oils Australia Growing use of Re-Refined oils 18

19 Electrical Steel 19

20 Electrical Steel 2016 Changes Gone Mergers & & & & 20

21 Electrical Steel 2016 Changes New 21

22 Electrical Steel No Mill In The World Is Operating At Full Capacity 22

23 Electrical Steel Why? No demand for poorer grades of GOES Global markets limited Changing customer base 23

24 BREXIT What does it mean?? Will the UK follow the EU 2020 Efficiency Standard Will the UK continue duties on GOES Do Ireland and Scotland side with the UK or EU Will it effect to sale of Tata Steel UK and the joint venture with Thyssenkrupp 24

25 BREXIT United Kingdom Sunday October 2, 2016 PM May announces that U.K. will start BREXIT process prior to March 31, 2017 Ireland & Scotland Petition EU to remain members 25