Case Study

The Evolution of Bio-based Transformer Fluid at Waverly Light and Power

Struck by a truck.

The concept of bio-based transformer fluid at Waverly Light and Power (WLP) began in 1994 when a truck knocked down a bank of transformers in Waverly, Iowa. A spill of approximately 20 gallons of PCB-contaminated mineral oil cost the utility $20,000 in clean-up costs. Ironically, the PCB-filled transformer was one of only four PCB-filled transformers left on the system at the time.

The spill inspired WLP to pursue the idea of a non-toxic transformer fluid. Iowa is located in a sea of soybeans, and the University of Northern Iowa’s Ag-Based Industrial Lubricants (ABIL) Research Program, located in Waverly, was doing research on industrial uses for soybean oil. Cannon and ABIL Director Dr. Lou Honary began exploration of dielectric fluid requirements, and ABIL began researching oil variations.

In the field.

The research process included laboratory tests conducted at the ABIL facility as well as field tests conducted in Waverly. The first soybean-based transformers were retrofilled units and were put into service on the WLP distribution system in 1997.

“We went through several years observing their performance in the wintertime and the summertime, and everything performed fine,” Honary said. “Showing the actual application and use in the field helped boost confidence in the product.”

Those units are still in service today, with the exception of the very first transformer, which was given to Cargill, Inc. for display at its world headquarters in Minneapolis.

DEED speaks louder than words.

In December 1999, the American Public Power Association’s DEED Research and Development Program provided a grant to do more extensive research on the bio-based fluid. The DEED study was completed and showed extremely promising results. Also in 1999, the first of five patents was issued for soybean-based fluid. The fluid was non-toxic, non-flammable, readily biodegradable, and had passed the BEES (Building for Environmental and Economic Sustainability) test as an environmentally preferred fluid by the National Institute of Standards and Technology, U.S. Department of Commerce.

In January 2001, the Tennessee Valley Authority’s (TVA) Public Power Institute awarded WLP a $20,000 contract to conduct a series of field tests. In 2002, Nashville Electric Service, Appalachian Electric Cooperative, and Gibson EMC in Tennessee completed two-year field demonstration tests. At that point, utilities from Alaska to South Carolina were using bio-based fluid.

Enter Cargill and Cooper.

Also in 2002, Cargill, Inc. purchased the patents and trademark rights and began manufacturing bio-based fluid-filled transformers in concert with ERMCO, Inc. As one of the world’s leading producers of food-grade vegetable oils, Cargill’s worldwide network of processing facilities allows product availability in ample supply and closer to the customer, utilizing in-country oil-seed-based resources. Royalty agreements remain for WLP.

In the early 1990s, Cooper Power Systems (CPS), a division of Houston-based Cooper Industries, began development of a vegetable-based transformer oil. In 1995, Cooper applied for a method-of-use patent, which was granted in the United States in 2000, and worldwide soon after. Cargill and CPS joined forces in 2004 to market, produce, and distribute their environmentally preferred fluid.

“It made sense to join forces with another company that has a much stronger position in the marketplace and still achieve our overall goals of developing the bio-based initiatives,” said Louis del Valle, Cargill Global Marketing Director.

The alliance between CPS and Cargill was created to cost-efficiently produce and distribute their bio-based fluid, a revolutionary insulating product that is safe for the environment and the public.

“There’s increasing interest in developing new markets for bio-based products, with three resulting benefits: help the rural economy, reduce the dependence on foreign oil, and help the environment,” del Valle said.

Adoption and recognition.

Cooper Power Systems, a leading manufacturer of electrical distribution equipment, sold dozens of bio-based fluid-filler transformers in 1997 for customer beta testing. Utilities around the world are recognizing the advantages offered by this revolutionary fluid over traditional dielectric fluids (non-conductive fluids used to insulate and cool electrical distribution products such as transformers) including enhanced performance and improved environmental characteristics. CPS’ fluid currently uses food-grade soy oil as its base.

Biodegradable bio-based fluid received the U.S. Environmental Protection Agency’s (EPA) Environmental Technologies Verification (ETV), which confirmed its environmental attributes. The EPA, however, has not yet made any significant differentiation in the Spill Prevention, Control and Countermeasure (SPCC) requirement for non-edible oils versus edible oils.

Biodegradable bio-based fluid is non-toxic to trout fry, according to testing per the guidelines developed by the Organization for Economic Cooperation and Development (OECD), a worldwide standard-setting body.

Fluid for a longer life.

Biodegradable bio-based fluid also enhances the performance and life of a utility’s transformer assets. In fact, during its research and development stage, CPS made an amazing discovery: biodegradable bio-based fluid significantly reduces the aging rate of the paper insulation used in transformers. This results in the doubling (or more) of the expected life of a transformer, translating to lower lifecycle cost for utilities, and more importantly, for their customers. The increased insulation life also translates to extended and enhanced transformer performance, or the ability to carry higher loads during peak demand periods without leading to premature insulation failure.

“Performance is a key factor for transformers,” McShane said. “The aging rate of transformer insulating paper improved five to eight times in our tests. That’s another reason that bio-based fluid becomes a very viable and interesting option in the industry.”

The fluid also has excellent fire-resistant qualities. Recognized testing laboratories, including Underwriters Laboratories (UL®) and Factory Mutual Global (FM™ Global), have listings allowing bio-based fluid-filled transformer installations outdoors and indoors, typically without costly fire protection devices.

Helping farms and the market grow.

Biodegradable bio-based fluid also creates a new market for soybeans, one of the largest-grown crops in the United States. According to del Valle, the price that farmers get for their soybeans is driven by supply and demand, and right now the primary market for soybean oil is for use in food products.

“By going into industrial products like transformer fluid, it creates a new demand stream that on average would tend to increase the price to the farmer,” del Valle said. “The long-term effect on American farmers is positive.”

So far the market for biodegradable bio-based fluid has been very encouraging. In fact, McShane said that over the last five years, the demand for the fluid has increased exponentially since its introduction.

“We doubled the demand in 2005,” McShane said. “And in 2006, there was an 80 percent increase, which remains equally high for 2007. With petroleum prices going through the roof, there will be more and more interest in renewable sources for transformer dielectric coolants than the hydrocarbon oils. The Federal Bio-based Products Preferred Procurement Program will also drive up demand.”

Going global.

The market for biodegradable bio-based fluid has expanded beyond North America. Cooper Power Systems and Cargill, Inc. have taken the fluid to the global market.

The international demand for biodegradable bio-based fluid has grown significantly and Cooper Power Systems and Cargill have built one foreign production facility with plans to build more.

Cargill and Cooper Power Systems give credit to WLP for its role in the development of the soybean-based transformer fluid market.

“Part of our success today and the volume of biodegradable bio-based fluid being sold today is directly related to what Waverly Light and Power started,” del Valle said. “So their involvement was very critical.”

Today WLP uses biodegradable bio-based fluid exclusively in its new transformer applications, not only for its environmental characteristics but also for its safety profile, lower lifecycle costs, and reduced use of imported oil. WLP remains active in the promotion of biodegradable bio-based fluid and takes pride in being a part of the history of bringing soybean-based transformer fluid to market.