Why Fixing India's Power Transformers Could Save Thousands of Crores

Power-sector reform tends to gravitate toward large generation projects, smart meters and transmission corridors. Those investments matter.

October 08, 2026. By News Bureau

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Santanu Debnath

International Copper Association India

Transmission corridors

Discoms

ICA India

Power Transformers

India doesn't need more power plants: It needs to fix its transformers. On any street in urban or rural India, a metal box mounted on a pole called distribution transformers is performing one of the most important jobs in the power system--converting high-voltage electricity into a form that homes, farms and businesses can safely use. These transformers rarely get noticed, until they fail, and an entire neighbourhood loses power.

Even when a transformer keeps working, it can still waste electricity all day, every day. That silent waste is one of the least visible drains on the finances of India's power distribution companies, or DISCOMs, many of which are already running large deficits.

Much of the data on this problem comes from a 2021 policy paper by the International Copper Association India (ICA India), which states that distribution-transformer technical losses accounted for around 5.16 percent of national Aggregate Technical and Commercial (AT&C) losses in FY2020, when overall AT&C losses stood at 21.73 percent. Better transformer management, the paper argued, could bring that share down to roughly 4.20 percent or lower.

The Cost of Neglect

Most DISCOMs record whether a transformer has failed, but few systematically monitor its efficiency while it remains in service. That distinction matters.

The problem is particularly acute among older "legacy" transformers and units that have been repaired after breakdowns. Conventional repair typically restores functionality but not performance. While a transformer may go back onto the network, its winding, magnetic core or internal design may continue to produce excessive no-load and full-load losses.

No-load loss is the electricity a transformer consumes when it is energised, although the customers may be drawing little or no power. Full-load loss are the losses incurred when the transformer is supplying electricity to the customer. DISCOMs pay for these losses but cannot bill them to consumers.

That creates a costly cycle. Inefficient transformers raise operating expenses, weaken DISCOM finances, and add to avoidable emissions. Premature failures then force emergency repairs, replacement equipment, and unplanned outages. Consumers feel the consequences directly, through unreliable supply and damaged appliances.

It is worth acknowledging that India's distribution sector has, in fact, been improving on the headline number. According to the Ministry of Power, national AT&C losses fell from 21.91 percent in FY2021 to 16.16 percent in FY2025, helped by the government's Revamped Distribution Sector Scheme (RDSS). The scheme has sanctioned projects worth INR 2.83 lakh crore, including work on distribution transformers and substations. It means that the improvement has come mostly from metering, feeder segregation and loss-reduction infrastructure, not from systematically testing and upgrading the efficiency of transformers already in service. Installing new equipment and ensuring existing assets perform to their design specification are two different problems, and the sector has mostly worked on the first.

Re-manufacturing Over Replacement

That gap is where re-manufacturing offers a practical middle path. Rather than simply patching up a failed transformer, or discarding an old but recoverable one, re-manufacturing upgrades the components that determine performance, the winding, the magnetic core, or both.

ICA India had piloted the approach with three utilities; Madhya Pradesh Paschim Kshetra Vidyut Vitran Company, Maharashtra State Electricity Distribution Company, and Tamil Nadu Generation and Distribution Corporation. In these pilots, re-manufactured transformers reportedly matched the performance of newly procured copper-wound units, and with a service life comparable to new equipment.

The process starts with testing the transformer's actual losses, identifying whether the core, the winding, or both need to work, and carrying out the upgrade. The unit is then retested for its performance before it is returned to service again.

The economy is compelling, too. ICA India's analysis suggests that replacing conventional repairs with re-manufacturing for failed transformers could save an estimated 1,712 GWh of electricity annually. This is worth INR 1,059 crore at the paper's assumed energy cost. The larger prize is re-manufacturing legacy transformers that haven't yet failed but are already running inefficiently. It can result in an estimated 10,738 GWh in annual savings, worth roughly INR 6,560 crore, with a potential cut of 8.5 million tonnes in carbon dioxide emissions.

Start Where the Returns are Greatest

A nationwide programme of re-manufacturing every transformer at once is not a great idea. It should start where the returns are clear.
Transformers rated between 100 kVA and 200 kVA are a logical starting point. They are common in urban and semi-urban areas, relatively easy to access and monitor. As per the same industry estimates, it could save around 3,367 GWh annually, worth roughly INR 2,088 crore.

- Santanu Debnath, Project Manager, International Copper Association India