Distribution Line Losses

Distribution line losses are often a significant cost to an electric utility and thus to the energy consumer in its cost-of-service rate regime. Consequently, each electric utility is continuously exploring ways to improve efficiency (through reducing these losses) across its networks by:

• Reducing Transformation – Voltage transformation inherently produces line losses; particularly when using “step-up” and “step-down” transformations in dealing with a variety of distribution voltages.
• Achieving the Higher Efficiency of Higher Voltages – Relative line losses (losses per KWh delivered) are lower at higher voltage level (i.e. 13kV vs. 4kV) independent of the benefits of reducing transformations.
• Improving Equipment – The general upgrade of system components will result in more modern and efficient equipment generally.

Reducing Line Losses saves money and improves the Environment

A review of 80+U.S. investor owned electric utilities (operating company level) reveals that these distribution line losses range between 4 and 7 percent of the total disposition of energy. For those systems experiencing higher levels of losses, it is reasonable to target up to a one to three percent reduction in distribution line losses as part of an overall SmartGrid/AMI strategy. Such savings could be used to support a sizable capital investment in the system, yet remain “financially neutral” to the customers in rates. The elements that account for the majority of these potential financial benefits include the:

• Avoided Cost of Capacity – A material decrease in line losses can lead to a permanent reduction in capacity needs and therefore  the need for constructing additional generation capacity.
• Electric Energy Efficiency – There are real savings to be realized in improving the efficiency of electricity between its source and the customer.
• Reduced Emissions – Carbon Dioxide Equivalents (or CO2e) best captures the effects of Nitrous Oxide, Methane, and other Global Warming Potential Gases and can be expressed in terms of $ per metric ton of CO2e eliminated.