Network Losses

Roman Targosz, PCPM, cem@miedz.org.pl

Webinar April 11, 2008

Introduction
Country / region Electricity use (TWh) 3 046 2 540 1135 4293 Brazil Japan Australia & New Zeland China India 721 336 3 913 964 219 1 312 497 826 13 934 Network losses (TWh) 222 185 133 305 131 61 381 44 21 94 133 83 1215 Network losses (%) 7,3 11,7 7,1 18,3 4,6 9,5 7,2 26,7 10,0 8,8 Europe including Western Europe Former Soviet Union North America

World Japan, Australia and NZ EU 15 OECD North America China Middle East Africa Indonesia Russia Mexico Brazil India

Latin America Including Azia including:

Africa and Middle East TOTAL

0%

5%

10%

15%

20%

25%

30%

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Country / Region

Electricity net production 2002 International Energy Annual 2002 - IEA 3802 TWh 782 TWh 2747 TWh 503 TWh 833 TWh 326 TWh 989 TWh

T&D losses

Distribution transformer losses

Effective efficiency

Efficiency at 50% load

USA Rest of North America - Mexico, Canada EU 25 Other Europe Western and Eastern Russia Ukraine and other FSU countries Japan

230 TWh)1* ~60 TWh)*4 201 TWh)[15] ~20 TWh ~95 TWh

140 TWh)2*

97,22%)3*

98,4%

55 TWh) 5* 8 TWh)7*

96,59%)5* ~97%)7*

98,79%)5*

32 TWh (6 TWh in the form
of no load loss)

Australia

196 TWh

21,8 TWh

5,4 TWh )[13] 5,35 TWh 4,41 TWh 55 TWh)7* 6,4 TWh)6*

96,8% 97% 97,5%

97,7% 97,9% 98,4%

China India Rest of Asia Brazil Other Central and South America Middle East Africa Total
*1 *2 *3 *4 *5 *6 *7

1300 TWh 524 TWh 947 TWh 343 TWh 439 TWh 442 TWh 422 TWh 14 594 TWh

~90 TWh ~130 TWh

~65 TWh

~40 TWh ~45 TWh 1342 TWh 980 TWh identified

6,05% of total generation 61 TWh utility , 79% non utility reversed calculation,- 98,4% base efficiency corrected by 74% of load responsibility factor Mexico 194 TWh x 14% + Canada 588 TWh x 6% distribution transformers account for 2% of electricity generated, efficiencies based on AA’ type as base case – [8] www.leonardoOnly for transformers up to 200 kVA ratings energy.org ECI estimates

Classification of network losses
The recorded losses can be broken down into three main categories: • Variable losses, often referred to as copper losses, occur mainly in lines and cables, but also in the copper parts of transformers and vary in the amount of electricity that is transmitted through the equipment. • Fixed losses, or iron losses, occur mainly in the transformer cores and do not vary according to current.
Both variable and fixed losses are technical losses, in the sense that they refer to units that are transformed to heat and noise during the transmission and therefore are physically lost.

• Nontechnical losses, on the other hand, comprise of units that are delivered and consumed, but for some reason are not recorded as sales. They are lost in the sense that they are not charged for by neither the suppliers nor distribution businesses.

Variable losses on a network are approximately proportional to the square of the current. This means that, for a given capacity, an 1 per cent increase in load will increase losses by more than 1 per cent. Therefore, greater utilisation of the network’s capacity has an adverse impact on losses. Consequently, there is a trade-off between the cost of financing surplus capacity and the cost of losses. By increasing the cross sectional area of lines and cables for a given load, losses will fall. It is clear that this leads to a direct trade-off between cost of losses and cost of capital expenditure. An appropriate investment decision would reflect a minimum life-cycle cost of assets, including both the capital costs and the cost of losses. It has been suggested that optimal average utilisation rate on a distribution network that considers the cost of losses in its design could be as low as 30%.

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Network losses components based on OFGEM

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Losses – types based on OFGEM

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Network losses components – case of Poland
% Part Network Losses Counters Leakage LV Feeder LV Load LV lines & cables Capacitors LV Iron MV/LV transformers I Copper MV/LV transformers Leakage MV Load MV lines & cables Capacitors MV Iron MV/MV transformers Copper MV/MV transformers Commercial systematic LV + MV Commercial recorded source: Politechnika Czestochowska I, II, III 4,07% 0,06% 1,91% 21,91% 0,13% 13,78% 6,75% 1,28% 31,67% 0,15% 0,44% 0,14% 20,47% -2,76% I + II 2,55% 0,03% 1,19% 14,07% 0,08% 8,63% 4,22% 0,80% 19,47% 0,10% 0,28% 0,08% 12,80% -1,72% I + II + III 2,06% 0,02% 0,96% 11,09% 0,07% 6,99% 3,43% 0,65% 16,08% 0,08% 0,22% 0,07% 10,46% -1,40%

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case of Poland – continued
100,00% Leakage 110 kV Load 110 kV II Capacitors 110 kV Iron 110/MV transformers Copper 110/MV transformers 110 kV Commercial 110 kV 1,44% 85,37% 1,22% 9,54% 3,73% -1,30% 100,00% Load - lines 220 kV Leakage - lines 220 kV Corona - lines 220 kV Load - lines 400 kV Leakage - lines 400 kV III Transmission system Corona - lines 400 kV Iron 400/220 kV autotransformers Copper 400/220 kV autotransformers Iron 400/110 kV autotransformers Copper 400/110 kV autotransformers Iron 220/110 kV autotransformers Copper 220/110 kV autotransformers 32,64% 4,98% 5,25% 12,70% 8,35% 23,85% 0,92% 0,41% 2,93% 0,89% 5,20% 1,88% 100,00% 100,00% 100,00% 62,58% 0,54% 31,94% 0,46% 3,57% 1,40% -0,49% 37,42% 50,78% 0,44% 25,90% 0,37% 2,89% 1,13% -0,39% 30,34% 6,21% 0,94% 0,99% 2,39% 1,57% 4,50% 0,17% 0,07% 0,55% 0,16% 0,98% 0,35% 18,88% 100,00%

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Network losses components

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0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

0

EU 2 AU 5 S TR IA BE LG IU M C C D EN M A H ZE C YP R

Loading characteristics of distribution transformers

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U K

τ

Ts

βs

Average load calculated

R K ES TO N IA FI N LA N D FR AN C G E ER M AN Y G R EE C HU E N G A R IR EL AN D IT A LY LA TV IA LI TH U A LU XE M B M AL TA N ET H ER L PO LA N D PO R TU G SL O VA K SL O VE N SP AI SW N ED EN

10,00%

12,00%

14,00%

16,00%

18,00%

0,00% EU25 AUSTRIA BELGIUM CYPR CZECH DENMARK ESTONIA FINLAND FRANCE GERMAN GREECE HUNGAR IRELAND ITALY LATVIA LITHUA LUXEMB MALTA NETHERL POLAND PORTUG SLOVAK SLOVEN SPAIN SWEDEN UK NORWAY

T&D losses – EU25

2,00%

4,00%

6,00%

8,00%

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T&D losses EU25

10,00%

15,00%

20,00%

25,00%

0,00% EU (25) Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Slovakia Slovenia Spain Sweden United Kingdom Norway related to net generation related to final consumption

5,00%

Denominator? Final consumption or net generation?

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T&D losses evolution based on OFGEM 2003
T&D losses %
Country Finland Netherlands Belgium Germany Italy Denmark UnitedStates Switzerland France Austria Sweden Australia UnitedKingdom Portugal Norway Ireland Canada Spain NewZealand Average EuropeanUnion 1980 6.2 4.7 6.5 5.3 10.4 9.3 10.5 9.1 6.9 7.9 9.8 11.6 9.2 13.3 9.5 12.8 10.6 11.1 14.4 9.5 7.9 1990 4.8 4.2 6.0 5.2 7.5 8.8 10.5 7.0 9.0 6.9 7.6 8.4 8.9 9.8 7.1 10.9 8.2 11.1 13.3 9.1 1999 3.6 4.2 5.5 5.0 7.1 5.9 7.1 7.5 8.0 7.9 8.4 9.2 9.2 10.0 8.2 9.6 9.2 11.2 13.1 7.5 2000 3.7 4.2 4.8 5.1 7.0 7.1 7.1 7.4 7.8 7.8 9.1 9.1 9.4 9.4 9.8 9.9 9.9 10.6 11.5 7.5 7.3

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Trend

-3,00% 0,00% 0,50% 1,00% EU25 AUSTRIA BELGIUM CYPR CZECH DENMARK ESTONIA FINLAND FRANCE GERMAN GREECE HUNGAR IRELAND ITALY LATVIA LITHUA LUXEMB MALTA NETHERL POLAND PORTUG SLOVAK SLOVEN SPAIN SWEDEN UK NORWAY

-2,50%

-2,00%

-1,50%

-1,00%

-0,50%

T&D losses EU25 - annual changes between 1999-2004

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Improving system efficiency
LOAD AV AILABILIT Y OFSYST EM CO PO EN S M N T GEN ERAT N IO

PROCEDURE

SYST EM CON IGU IO F RAT N

MINIMUM POWER DEMAND

SH RT O -CIRCU IT CALCU LATIO N

POW F W ER LO CALCU IO LAT N (SY EMLO ST SS)

S O T-CIR IT HR CU LIM ITS O K

N O

N O

SY EMLO ST SS M IM M IN U YES LO LO W SS SYST EM CON IGU ION F RAT

CO T GEN N IN CY CALCU LATIO N

CON IN IT O T U Y F SU PPLY O K

N O

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Energy policies and measures
There are different possibilities how to categorise policy instruments. The UNFCCC guidelines for reporting distinguish between the following types of policies and measures: • • • • • • • • economic fiscal voluntary/negotiated agreements regulatory information education research other Another possibility to differentiate between policies and measures (EU-IEE project www.aid-ee.org): • • • • • • • • • • legislative / normative legislative / informative financial fiscal/tariffs information, education, training co-operative measures infrastructure social planning / organisational cross-cutting (with or without sector-specific characteristics; e. g., market-based instruments, general energy efficiency or climate change programmes) non-classified policies and measures.

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Treatment of network losses in the current national regulatory schemes
In general, electricity Distribution System Operators (DSO) have to document and report network losses to the national regulatory authorities. However, the degree of particularity of reporting required differs between countries. Besides reporting on losses, network losses are treated differently in the different regulatory schemes. The following options can be observed in practice: • No limits set for inclusion of loss costs in tariffs
– In several countries, there are no limits set for inclusion of loss costs in tariffs at all: France, Poland, Spain, Germany (but requirement to tender for price of energy to cover energy losses) and Norway – In these countries, loss costs are outside the cap, which is a real disincentive to investment in energy efficiency.

Grid losses within general caps
– In few countries, grid losses are subject to the general price cap: Denmark, Hungary, Lithuania. However, not all network losses can be influenced by the electricity distribution company.

Maximum values for inclusion of loss costs in tariffs
– In some countries, maximum values for amount and/or price to limit network losses exist; costs for exceeding losses have to be paid for by each company itself. – Austria and Sweden calculate additionally individual maximum values for the amount of loss energy for each company. In Austria actions leading to lower losses can be approved in the regulatory process. – In Estonia, the regulatory authority reduces the annually acknowledged amount of losses from one regulatory period to the next (current period 8%, next period 7%). – If companies in Austria, Estonia and Sweden exceed the given limits, they have to cover resulting additional costs from their profit margin. – In Germany, the national regulatory authority has benchmarks for network losses at its disposal, but has not applied them yet in the current regulation scheme.

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Specific incentives within regulation scheme

Real incentives were only found in Great Britain, where the price control includes an incentive on losses. For every MWh of losses excess over a target rate, the distribution network operator (DNO) is penalised or rewarded by £48/MWh (in 2004/05 prices) (based on information from National Regulatory Authority, OFGEM, 2007).

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Network losses – are they addressed by policies and measures?

general cross-cutting policies and measures having an impact on energy efficiency on the demand-side by generally altering price ratios: energy/CO2 tax, emissions trading, sustainable subsidy reform energy efficiency programmes and services specifically targeting relevant market actors, a field of application or an energy-efficient technology (e. g., financial incentive programmes, information campaigns, energy audits, training measures, co-operative procurement, demand-side bidding programmes), that can be further stimulated by framework conditions further instruments fostering energy efficiency like product or production standards and labels, regulation of natural monopoly segments, spatial planning and other planning instruments like infrastructure planning, R&D support

Generators efficiency Low carbon technologies

Energy end use: appliances, buildings, systems Network losses marginally

All energy chain Opportunity for network losses reduction

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Extra losses due to harmonics

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Distributed Generation versus network losses
• • The conclusions from many studies are that the view of Distributed Generation always reducing network losses is not always valid. Based on one of the studies for urban and mixed networks it was found that the overall losses are reduced with Distributed Generation presence. For rural networks however, losses again were reduced but started to increase for higher Distributed Generation penetrations. From many studies the general conclussion is that unitil certain DG penetration level (between 10-20%) network losses fall down and then start to grow.

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Conclusion  Only part of network losses are controllable or justifiable  Current regulation schemes (price or revenue caps, rate of return, benchmarks) do not provide sufficient incentives but rather disincentives for network losses reduction  Network losses are hardly addressed in existing EU policies and measures

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