Losses in transmission and distribution networks represent the single biggest use in any electricity system. In Europe, they consume between 4 and 10% of electricity generated. What can be done to optimise the electricity system and reduce these losses? Which countries are setting a good example? And what is the role of regulation and policies on this point? Current tariff systems in most European countries are not really favouring network efficiency, and what about the influence of increasingly distributed generation on future network losses?
These and other questions were addressed in a Discussion Webinar on April 11th 2008. The following are a few of the major points arising from that discussion.
The world average loss in the electric network system is 8.8%. However, this figure includes countries like India and Brazil, where the losses are high due to so-called “non-technical losses” – electricity which could not be invoiced and is mainly lost via illegal network connections.
In Europe and North America, average network losses are around 7%. The differences between European countries are very high, ranging between less than 1% for Luxembourg to 16% for Estonia. These figures do not give an accurate impression of the situation though, since the formula to calculate losses favours countries with a lot of transit power, like Luxembourg. Transit power only passes through high voltage transmission lines, while about 75% of the losses are situated within the distribution network.
Network losses in the EU-15 countries didn’t decrease much over the past decade. In many Eastern European countries on the contrary, network losses have lowered significantly during the latest years.
When comparing network losses with the size or population density of countries, correlation is weak. This means that technical network losses mainly depend on other factors such as network design, operation, and maintenance.
A few basic rules exist to minimise network losses. The first rule is to design the network system in such a way that power lines to large consumers are as direct as possible. The second basic rule is to reduce the number of transformation steps, since transformers account for almost half of network losses. For the same reason, high efficiency distribution transformers can make a large difference.
Not all losses are controllable and not every loss reduction is justifiable. The higher the load on a power line, the higher its variable losses. This means that a trade-off should be made between load and losses. Investments in new capacity could in some cases be justified by the reduced cost of losses. The appropriate tool for such an investment decision is Life Cycle Costing (LCC). It has been suggested that the optimal average utilisation rate of distribution network cables should be as low as 30% if the cost of losses is taken into account.
A similar reasoning accounts for the cross-section of lines and cables: the higher the cross-section, the lower the losses. An optimum balance between investment cost and network losses should be aimed for.
Network efficiency is related to Power Quality by the fact that harmonic currents increase losses. Though certainly not negligible, losses due to harmonics are only a small part of the overall network losses. On the average, harmonics in European networks are responsible for about 3% of the network losses (a loss of 0.2% of the load).
Loss-optimised network design also lowers network impedance, and hence has a positive impact on supply quality.
A discrepancy can be observed between the way EU policies are treating generation and end-use efficiency at one site, and network efficiency at the other. The current tariff systems in most countries are not favouring network efficiency. Most participants in the Discussion Webinar agreed on the fact that improving regulation is key to changing this situation and making European electricity networks more efficient.
In several European countries (France, Poland, Spain, Germany…), there is a price cap on the network tariff, in which the term for network losses is not included. This means that the cost of network losses can be entirely charged through to the customer. This tariff system produces a strong disincentive for investing in network efficiency. The price cap prevents network operators from accumulating sufficient cash for efficiency investments, while the lack of a price cap on network losses makes such investments completely useless – the network operator does not have to pay for the losses anyway.
In other European countries, maximum values are set for the amount of network losses that can be charged through. This forces network operators to prevent losses from increasing, but it does not yet stimulate them to reduce losses.
The only real regulatory efforts to reduce network losses so far have been carried out by Estonia and the UK. In Estonia, the maximum network loss that can be charged through is reduced every year by 1% of the total load. In the UK, the losses that exceed a certain target rate are penalised to the distribution network operator by £48/MWh.
The EU is increasingly conscious of the fact that there are too few incentives to improve network efficiency. Consequently, this point was addressed in the EU energy efficiency action plan. This might be a sign that the awareness among policy makers has been raised, but it will be critical to make things happen as soon as possible. There is an opportunity for change at the moment, since large investments in the network system are to be made in the forthcoming decade.
It is often believed that distributed generation (DG) systems in any case reduce network losses. Detailed studies prove that the reality is not so simple. As a general rule, one could say that distributed generation systems only reduce network losses if their energy is consumed locally. As a result, in urban or densely populated areas, where energy consumption is high, DG units do indeed reduce network losses. In rural areas, however, the electricity consumption close to the point of generation is small. Consequently, network losses are reduced in cases of small penetration of DG systems, but increase again with rising DG penetration. In the last case, the generated power has to be transported to the closest centre of consumption, bringing along network losses again.
One participant in the discussion suggested the application of intelligent control systems for DG units. Such control systems could take the energy losses of the involved network cable into account. If those losses would be too high because of excessive load, the control system could switch the DG unit off the grid. Such a system would be particularly interesting if the DG unit were to be combined with local energy storage. In such a case, the DG unit could continue generating power when it went off grid and then inject this power into the grid at later time.Log in to post comments