Transformers are the nerve centre of many organisations, powering infrastructures such as hospitals, transport hubs and any number of commercial buildings.

They ensure businesses keep going but, if not managed effectively, they could present a major risk to a company’s reputation, continuity and the bottom line.

Most transformers today are cooled by mineral oil but this has some major flaws. Most notably, it is a flammable liquid so mineral oil transformers are prone to fires, which can have catastrophic consequences. These fires can threaten the lives of people in close surroundings and cause significant damage to nearby property and land.

Companies have little choice but to let them burn out, which can take days, or extinguish them with nitrogen, before counting the cost to their business, the environment or – in the worst case – lives.

It’s not just the fire risk that’s an issue. If a mineral oil transformer leaks, it can create further environmental damage as the liquid itself is not biodegradable. Companies might be obligated to clear up any spillage but, nevertheless, it still comes at a high financial and reputational cost.  

A transformer fire might never happen – but with a mineral oil transformer, there will always be the chance. When travelling in a car, the possibility of a crash is remote but seatbelts are commonplace to ensure safety. In a similar vein, rather than dismissing the possibility of a fire or leak, businesses need to evaluate the risks and do their best to safeguard against them.

With transformers, the first risk factor is its location. Its proximity to people, combustible materials or environments such as water or woodlands will determine just how destructive a fire or leak could be. A typical utilities firm might run several thousand transformers and as much as 15% of these could be in high-risk locations.

The second factor is what the transformer is powering. An outage could force the closure of railways, motorways or buildings, to name a few. If the transformer feeds electricity to a retail operation, loss of electricity could have massive commercial consequences in terms of loss of trade. If it powers a hospital, it could even jeopardise lives. Damage to the transformer itself is one issue, since it could take months to repair. An additional challenge is damage to other localised equipment, such as a furnace that had to be shut down and could take a while to restart.

A secret alternative?

It’s often the case that transformer operators are simply unaware of the risks. Through lack of awareness or even misunderstanding, they might wrongly assume that mineral oil is fire safe. It might also be the case that they don’t realise there are viable, safer alternatives on the market.

The most important alternatives are ester-based fluids, which are now proven and accepted as best practice in terms of fire avoidance. They remove the risk of transformer fires and environmental damage, ensuring peace of mind by enabling companies to tackle the cause rather than struggle with the effects.

Esters are fire safe because they have a relatively high fire point – nearly double that of mineral oil – and significantly lower calorific value.

At the board level, esters provide a mechanism not only to mitigate risk but also to boost corporate CSR programmes and green strategies. Increasingly, corporations are implementing green strategies in line with government policies, including how they handle and produce materials. This cascades right through to the transformer fluids they use – and because esters are biodegradable, they are the natural, environmentally-friendly option.

Ensuring commercial viability

Any wide-scale business change requires a keen eye on the commercial implications – and one major barrier to switching to esters is the perceived cost. However, in addition to the safety and green credentials, esters can actually reduce a transformer’s overall total cost of ownership and increase its lifespan.

Firstly, because companies don’t need to include as many safety features – as would be required for mineral oil transformers – ester transformers enable them to save money on installations. Added to this, they need considerably less space because they require less surrounding infrastructure – and this can lead to major cost-savings, particularly in expensive urban locations. They are also cheaper to maintain.

As a result, any initial capital increases turn into significant savings when looking at the overall total cost of ownership. Some estimates suggest the companies can save as much as 30% over the lifespan of an ester transformer compared to mineral oil.

For many businesses, replacing existing transformers is simply not possible. Here, retrofilling existing mineral oil transformers with esters is a lifeline. It could avoid the need to put hundreds of mineral oil transformers out of service and, instead, extends their lifespan.

Insuring for the future

Companies don’t want to take unnecessary risks, of course – and with transformers, they really don’t need to. Commercially viable alternatives are available, expanding the possibilities to minimise risk, ensure business continuity and bolster CSR programmes. What’s more, these are proven approaches. Esters are now recognised by insurers as a safer alternative, which could in some cases affect premiums.

With transformers, companies might once have thought they couldn’t afford to switch. However, for board-level executives, the right blend of risk mitigation, safety and cost-efficiency is essential – so today, perhaps they can’t afford not to.  

Barry Menzies is Managing Director of MIDEL, a global producer of ester transformer fluids.