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The key techniques employed in this paper reflect on a comprehensive method for calculating the cost of the electric power and energy needed to supply the life-cycle losses of power transformers. The method is applicable to transformer users who possess their own generation and transmission facilities. The proposed loss evaluation method is based on factors derived from relevant historical and forecasted data that are combined to determine the total ownership cost of power transformers. Finally, in a companion paper, the method is evaluated on a small-scale real system. Index Terms-Demand component of losses, energy component of losses, power transformers, system and cost parameters.

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