The Impact of Copper Prices on Electrical Systems

by Visitor hillac ‎07-15-2011 12:48 PM - edited ‎07-15-2011 01:48 PM

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The current escalation in the commodities market has left an impact on many of the materials used in electrical power products and their distribution. Most notably, copper prices have hit record highs and as a Wall Street Journal article pointed out earlier this year – the industry has taken notice. The shift from copper to aluminum has gained some momentum. However, there are system design considerations that should be noted when looking for opportunities to reduce the amount of copper used in an application.

Bus Bar and Power Cabling: Bus bars are responsible for the largest concentration of copper within an electrical system. Early in the design and layout phase, options may exist to minimize the costs associated with copper. Some question to ask include:
- What are the distances between generator sets, UPS and switchgear?
- Can you minimize the length of the bus?
Another point to consider is that having redundant buses and cabling adds cost. Shifting the redundancy to a less expensive portion of the electrical system could be an alternative.

Voltage: An additional opportunity to reduce the bus bar size is to modify the system architecture with regard to voltage. If you can design your system to utilize a higher voltage bus, you can minimize the size of your bus bar for the larger sections of your system. You will need to account for the transformers needed at your site to step the voltage down where needed, and a cost analysis would be necessary to evaluate the transformer costs versus bus bar savings.

Here are my questions to the Community:

  • Do core material costs factor into your design considerations, or even change them, when you are planning your electrical systems?
  • Have you, or have you ever, considered changing the electrical system's layout, voltage or redundancy in order to minimize copper material costs?
  • If so, what changes did you make?
  • And conversely, what changes did you NOT make and why?

 
Please post below and share your thoughts.

Comments
by Visitor dani_rajiv
on ‎07-19-2011 06:47 AM

Copper Material cost is very important factor in Electrical Engineering systems design for EPC contractors and users. Copper cost is rising exponentially day by day and world over Copper prices is daily monitored as per  LME rate fluctuations and factored during Electrical system hardware cost evaluation . For example Copper cables cost is directly impacted by rising  copper prices and for high rating   power distribution at low voltages like 415 Volts or 380 volts, copper  cable cost is very significant . As an alternative ,  Aluminum cables are very cost effective option and widely used in India and some parts of world where copper is not a  basic electric material . As a general norm Equivalent Aluminum power cable cost   can be  almost  50 %-60 % less compared to of Copper Cables & Bus Bar  cost in India & some parts of world where Aluminum is basic  raw materials available  for Electrical  Industry.

 

Designing Electrical power distribution system with Higher voltage like 3.3 KV or 4.16 KV or other suitable High voltage  is very much a good proposition to reduce the Ampere ratings and reduce  copper quantity of Bus Bars in Switchboards, Copper conductor size in Power Cables and  less copper in Motors windings.  However, Higher voltage will  increase cost of  Insulation materials   , specially for Cables, Transformers  ,Motors and Generator , but it will not be much significant compared to reduced copper cost .

 

Hence Higher voltage selection is good option to reduce rising copper cost ,where possible at design stage by selecting  the Higher  voltage for Electric Motors  & Heater loads associated with Base Load  Generators  of large rating  ,This  will  help in optimizing  Transformer sizing & windings copper cost . To optimize copper cables cost, during layout engineering, it is also possible to locate  Electrical Distribution Switchboards/ Motor Control centers within  shorter  distance( 100-125  Meters  )  so as to reduce number of Cables and size of copper  conductors . A system study on ETAP can be  performed to calculate optimum distance for given cable size and Current rating , voltage drop limits and there by  optimum length of distribution sub station & Switchboards can be  worked out !

 

Whenever  the loads are only  Low Voltage  & Distribution Transformers are required for lowering the Generator High voltage , for  ratings  of  1000 - 2000  KVA  range , it is possible to avoid copper wound Transformers by use of  Aluminum Foil wound type Transformers and mitigate risk of rising copper cost for Transformers. 

 

In summary, I also feel, copper costs are rising every where and electrical industry in particular is vulnerable to volatility of copper cost. All alternatives to reduce dependence on copper is in best of interest  for  designer, contractor and user as well , since  user is one who finally pays for higher coppercost  of his plant electrical systems.

 

Thanks

 

Rajiv Dani

Larsen&Toubro Ltd.

India.

by Visitor hillac
on ‎07-20-2011 01:41 PM

Thanks for the thoughtful response and details on some of the application considerations you've gone through.  You make some very valid points on the different cost versus benefit analyses that must be done in the various scenarios like the tradeoffs between copper savings and wire insulation increases or transformer costs.  I also think you highlight the fact that many of these savings have to be captured up front in the design phase of your project when selecting your components and laying out your system.  Once you have selected your loads and distribution components, you are really going to be limited in the options you have to reduce out copper material costs except for physical location of these components and their proximity to each other.

by Contributor Kengine7
on ‎07-29-2011 06:18 PM
Core costs are an issue when figuring conductors. Outside wiring such as generator to transfer switch or meter to transfer switch, or transfer switch to MDP/EP/PP and MCC, many times fall within NEC as approved aluminum conductors. Using aluminum for these installations can bring a competitive edge when bidding. Many solicitors do not discount for outside wiring material in which case the conductor cost to me and perceived cost to solicitor is a built-in advantage. It's a little like customers who want John Deere prime, or Cummins prime: they expect a premium cost due to historical reliability of those engines-however, many are now built in non-competitive Asian factories. The costs are much lower to vendors and not passed on. This type of windfall profit is common and does not help contractors at all. We are pinched when premature failures occur. Warranty work can be expensive for contractors who have to wait for warranty decisions from manufacture. All costs are covered first by contractors and reimbursement is not guaranteed. The point is that core costs can be beneficial if material is not specified (for outside service-rated installations) because solicitors expect high copper costs and higher bids. I recall when copper went sky high 6-7 years ago, everybody was talking 'oh my, copper is 4x higher than last year...' it was in the paper and on the news about sites being stripped of copper, copper theft everywhere, etc. All the while I am quietly raising my bids as was everybody and still using aluminum. I never changed. Aluminum makes sense in distribution work. It's always been too expensive to keep spool-size conductor in copper-and, never required to use copper. Not never, I am wrong. Some municipalities are copper-only. This is beyond the NEC requirement but sometimes jurisdiction rules. My point is really regarding brand (equipment brand) and unexpected price matrix. For example, a big brand electrical products company prices MDPs at $x,xxx.xx and for no explainable reason, charges 10 times expected price for breakers. I have paid $1,600 for 400 A 3P molded case breaker while expecting $160. This brand-gouging is killing small contractors. The pie-in-the sky pricing has no merit. The equipment arrives 'made in mexico' or overseas. Good Lord, where, what, how are those prices even legal? This is relevant to my business. One more example: Rockwell software products which support Allen-Bradley PLC equipment raised the 5000 series costs 2x in a year. No explanation-just price contractors like me out. We can't spend time watching product costs. I watch metal markets at a glance so I know ball park expectations. Since ancillary equipment and software are not paired to commodities cost, there is and never will be any just cause to warrant large hit price hikes. I have had this talk a few times with manufacture reps. One said they do because they can and I thanked him for being honest. A products engineer told me to 'buy so-and-so' brand from 'foreign manufacture' he said it's identical to ours, but 1/8th the cost including shipping. In summary, core costs do not affect my work substantially except when on the rise, my bids seem more attractive to solicitors. The issue that is going to make me turn my shingle around to 'Closed' is brand-gouging without merit, without coupling, without any real cause except to grab huge profits riding on 'the cost of labor, supplies' hogwash: vendor costs are down and have been going down since NAFTA. If you follow WSJ as your indicator of what's happening, you will get the profiteer's position. If you follow product cost vs product price you will see no relation to spot price of Al or Cu. How much copper is in 4 DVDs anyway?
by New member sunildetec
on ‎12-06-2011 05:45 AM

What an interesting and info packed site. Thanks for this, I really appreciate what you have done here. Keep it up, and I will be back for more.

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