network losses

Roman Targosz, PCPM, [email protected]

Network Losses

WebinarApril 11, 2008

www.leonardo-energy.org

Introduction

0% 5% 10% 15% 20% 25% 30%

India

Brazil

Mexico

Russia

Indonesia

Africa

Middle East

China

OECD North America

EU 15

Japan, Australia and NZ

World

Country / region Electricity use (TWh)

Network losses (TWh)

Network losses (%)

Europeincluding Western Europe

3 0462 540

222185 7,3

Former Soviet Union 1135 133 11,7

North America 4293 305 7,1

Latin AmericaIncluding Brazil

721336

13161 18,3

Aziaincluding: Japan

Australia & New ZelandChinaIndia

3 913964219

1 312497

381442194

133

4,69,57,2

26,7

Africa and Middle East 826 83 10,0

TOTAL 13 934 1215 8,8


Country / Region Electricity net production 2002International Energy Annual 2002 - IEA

T&D losses Distribution transformer losses

Effective efficiency Efficiency at 50% load

USA 3802 TWh 230 TWh)1* 140 TWh)2* 97,22%)3* 98,4%

Rest of North America - Mexico, Canada

782 TWh ~60 TWh)*4

EU 25 2747 TWh 201 TWh)[15] 55 TWh) 5* 96,59%)5* 98,79%)5*

Other Europe Western and Eastern

503 TWh ~20 TWh 8 TWh)7* ~97%)7*

Russia 833 TWh ~95 TWh

Ukraine and other FSU countries 326 TWh

Japan 989 TWh 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

96,8% 97%97,5%

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

China 1300 TWh ~90 TWh 55 TWh)7*

India 524 TWh ~130 TWh 6,4 TWh)6*

Rest of Asia 947 TWh

Brazil 343 TWh ~65 TWh

Other Central and South America 439 TWh

Middle East 442 TWh ~40 TWh

Africa 422 TWh ~45 TWh

Total 14 594 TWh 1342 TWh 980 TWh identified

*1 6,05% of total generation*2 61 TWh utility , 79% non utility*3 reversed calculation,- 98,4% base efficiency corrected by 74% of load responsibility factor*4 Mexico 194 TWh x 14% + Canada 588 TWh x 6%*5 distribution transformers account for 2% of electricity generated, efficiencies based on AA’ type as base case – [8] *6 Only for transformers up to 200 kVA ratings*7 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%.


Network losses components based on OFGEM


Losses – types based on OFGEM


Network losses components – case of Poland

Part Network Losses

%

I, II, III I + II I + II + III

I

LV + MV

Counters 4,07% 2,55% 2,06%

Leakage LV 0,06% 0,03% 0,02%

Feeder LV 1,91% 1,19% 0,96%

Load LV lines & cables 21,91% 14,07% 11,09%

Capacitors LV 0,13% 0,08% 0,07%

Iron MV/LV transformers 13,78% 8,63% 6,99%

Copper MV/LV transformers 6,75% 4,22% 3,43%

Leakage MV 1,28% 0,80% 0,65%

Load MV lines & cables 31,67% 19,47% 16,08%

Capacitors MV 0,15% 0,10% 0,08%

Iron MV/MV transformers 0,44% 0,28% 0,22%

Copper MV/MV transformers 0,14% 0,08% 0,07%

Commercial systematic 20,47% 12,80% 10,46%

Commercial recorded -2,76% -1,72% -1,40%

source: Politechnika Czestochowska


case of Poland – continued 100,00% 62,58% 50,78%

II

110 kV

Leakage 110 kV 1,44% 0,54% 0,44%

Load 110 kV 85,37% 31,94% 25,90%

Capacitors 110 kV 1,22% 0,46% 0,37%

Iron 110/MV transformers 9,54% 3,57% 2,89%

Copper 110/MV transformers 3,73% 1,40% 1,13%

Commercial 110 kV -1,30% -0,49% -0,39%

100,00% 37,42% 30,34%

IIITransmission system

Load - lines 220 kV 32,64% 6,21%

Leakage - lines 220 kV 4,98% 0,94%

Corona - lines 220 kV 5,25% 0,99%

Load - lines 400 kV 12,70% 2,39%

Leakage - lines 400 kV 8,35% 1,57%

Corona - lines 400 kV 23,85% 4,50%

Iron 400/220 kV autotransformers 0,92% 0,17%

Copper 400/220 kV autotransformers 0,41% 0,07%





100,00% 18,88%

100,00% 100,00% 100,00%


Network losses components


Loading characteristics of distribution transformers

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

Average load calculated

βs

Ts

τ


T&D losses – EU25

T&D losses EU25

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

EU

25

AU

STR

IA

BE

LGIU

M

CY

PR

CZE

CH

DE

NM

AR

K

ES

TON

IA

FIN

LAN

D

FRA

NC

E

GE

RM

AN

GR

EE

CE

HU

NG

AR

IRE

LAN

D

ITA

LY

LATV

IA

LITH

UA

LUX

EM

B

MA

LTA

NE

THE

RL

PO

LAN

D

PO

RTU

G

SLO

VA

K

SLO

VE

N

SP

AIN

SW

ED

EN UK

NO

RW

AY


Denominator? Final consumption or net generation?

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%E

U (2

5)

Aus

tria

Bel

gium

Cyp

rus

Cze

ch R

epub

lic

Den

mar

k

Est

onia

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Irela

nd Italy

Latv

ia

Lith

uani

a

Luxe

mbo

urg

Mal

ta

Net

herla

nds

Pol

and

Por

tuga

l

Slo

vaki

a

Slo

veni

a

Spa

in

Sw

eden

Uni

ted

Kin

gdom

Nor

way

related to net generation

related to final consumption


T&D losses evolution based on OFGEM 2003

T&D losses %

Country 1980 1990 1999 2000

Finland 6.2 4.8 3.6 3.7

Netherlands 4.7 4.2 4.2 4.2

Belgium 6.5 6.0 5.5 4.8

Germany 5.3 5.2 5.0 5.1

Italy 10.4 7.5 7.1 7.0

Denmark 9.3 8.8 5.9 7.1

UnitedStates 10.5 10.5 7.1 7.1

Switzerland 9.1 7.0 7.5 7.4

France 6.9 9.0 8.0 7.8

Austria 7.9 6.9 7.9 7.8

Sweden 9.8 7.6 8.4 9.1

Australia 11.6 8.4 9.2 9.1

UnitedKingdom 9.2 8.9 9.2 9.4

Portugal 13.3 9.8 10.0 9.4

Norway 9.5 7.1 8.2 9.8

Ireland 12.8 10.9 9.6 9.9

Canada 10.6 8.2 9.2 9.9

Spain 11.1 11.1 11.2 10.6

NewZealand 14.4 13.3 13.1 11.5

Average 9.5 9.1 7.5 7.5

EuropeanUnion 7.9 7.3 7.3 7.3


Trend

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

-3,00%

-2,50%

-2,00%

-1,50%

-1,00%

-0,50%

0,00%

0,50%

1,00%

EU

25

AU

ST

RIA

BE

LGIU

M

CY

PR

CZ

EC

H

DE

NM

AR

K

ES

TO

NIA

FIN

LAN

D

FR

AN

CE

GE

RM

AN

GR

EE

CE

HU

NG

AR

IRE

LAN

D

ITA

LY

LAT

VIA

LIT

HU

A

LUX

EM

B

MA

LTA

NE

TH

ER

L

PO

LAN

D

PO

RT

UG

SLO

VA

K

SLO

VE

N

SP

AIN

SW

ED

EN

UK

NO

RW

AY


Improving system efficiency

AVAILABILITYOF SYSTEM

COMPONENTSLOAD GENERATION

SYSTEMCONFIGURATION

SHORT-CIRCUITCALCULATION

CONTINGENCYCALCULATION

POWER FLOWCALCULATION(SYSTEM LOSS)

LOW LOSSSYSTEM

CONFIGURATION

MIN

IMU

M P

OW

ER

DE

MA

ND

CONTINUITY OFSUPPLY

OK

NO

SHORT-CIRCUITLIMITS

OK

NO SYSTEM LOSSMINIMUM

YES

NO

PROCEDURE


Energy policies and measuresThere 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.


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.


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).


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

Generators efficiency Low carbon technologies

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

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

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

All energy chain Opportunity for network losses reduction


Extra losses due to harmonics


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.


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

network losses

Economy & Finance