Power Distribution and Management

What are Smart Strategies for Reducing Technical Losses?

Technical losses on electrical distribution networks are an inherent consequence of energy being transmitted and distributed. While they can never be completely eliminated, they can – and must be – minimized by improving energy efficiency using smart, connected tools.

The benefits on decreasing losses on electrical distribution networks are multifold:

  • Financial: Distribution losses can be extremely costly. For example, losses ranged from 2% to 14% in European countries in 2018. These losses represent billions of euros of annual waste in distribution grids from electricity that was produced but never used and invoiced.
  • Environmental benefits: T&D worldwide can save an estimated 500 metric tons of carbon dioxide per year by improving global grid efficiencies, such as reducing technical losses. A more energy efficient network requires lower energy use, which can reduce air pollution, avoid wasted resources, and reduce fossil fuel use.
  • Regulatory: New regulations require distribution networks to improve efficiency, such as the EU’s Energy Efficiency Directive (2012/27/EU) and Directive 2019/944. They’re also being put into place at an individual country level. For example, Sweden has recently added a revenue cap regulation that takes the reduction of network loss into account, which the UK has policies in place that are designed to incentivize DSOs to better manage losses.

Reduce distribution network losses and improve grid efficiency

Technical losses are unavoidable

There are two types of losses – non-technical losses, such as theft or meter errors, and technical losses. Today we’re focused on technical losses, which can be broken into two categories: variable technical losses and permanent/fixed technical losses.

Technical losses are caused by energy dissipated in the conductors, equipment used for transmission, sub-transmission and distribution lines and magnetic losses in transformers. Power transmission is naturally inefficient due to factors such as inefficient network equipment, losses that occur when energy is transported long distances between generation and consumption, and network congestion that disrupts the normal flow of electricity.

  • Between 1/4 and 1/3 of technical losses on distribution networks are fixed losses. These do not vary by current and can be caused by factors such as leakage current losses or losses caused by continuous load of measuring or controlling elements.
  • In contrast, between 2/3 and 3/4 of technical losses are variable technical losses, which depend on the amount of electricity distributed. They are caused by impedance of the system, such as cables or conductors, and are proportional to the square of the current.

Technical losses, both variable and fixed, most frequently occur on primary and secondary distribution lines. There are a number of causes, but some of the most common are

  • Long distribution lines
  • Overloading of lines
  • Unbalanced feeder phase current
  • Inadequate size of conductors for distribution lines
  • Installation of distribution transformers away from load centers

But distribution networks can use proven methods for minimizing losses

Increasing grid efficiency, addressing the consumer side of energy use with demand response tools, and improving how DER are managed all help utilities overcome distribution network losses.  That’s because they all focus on ways to more efficiently use energy – whether that is by eliminating energy waste through better network management, more efficiently integrating DER into the grid to minimize losses, or by supporting consumers to better manage their own energy using demand-side tools.

Any network loss improvement strategy should target all three of the pillars of loss reduction: organizational strategy, technical choices, and data management:

  1. Organizational strategy revolves around the implementation of operational strategies, such as balancing load between phases.
  2. Technical choices focus on the selection of efficient components or solutions.
  3. Data management concentrates on using data for understanding and tracking energy consumption and loss.

All three of these categories can be addressed using connected, digital technology.

Loss-reduction methods are centered around smart, efficiency-improving technology

Replacing existing distribution network infrastructure is costly and difficult. Instead, a cost-effective alternative for network improvements, including minimizing technical losses, is to keep the existing electrical distribution infrastructure while adopting smart grid components and advanced software. Upgrading to intelligent, connected technology reduces losses while optimally utilizing the existing energy resources and giving distribution operators more control over their network. Let’s look at some examples.

A top example is the advanced distribution management systems, which can serve as the core of any strategy for minimizing losses and actively managing distribution networks. ADMS is a comprehensive toolset/platform for distribution management and network optimization. Its functionalities give network operators the ability to reduce losses by providing a comprehensive view of the distribution network for more accurate loss detection, voltage optimization, and real-time situational awareness for monitoring, controlling, and coordinating interconnected assets. In addition, merging multiple functionalities into a complete network management solution, distribution operators can reduce losses by identifying and solving voltage fluctuations caused by DER.

Another example is efficient components like high efficiency, low-loss transformers. These can significantly improve both load loss and non-load loss performance. They can actively manage losses and power dissipation by dynamically reconfiguring the grid using software built to estimate loss, like ADMS and analytics. These tools can then automatically, in real-time calculate the shortest and least resistant path to the flow of electrons.

Furthermore, field-proven components also work together. For instance, a smart transformer, including a serial transformer working together with the conventional active part, a set of low-current LV contactors, and a PLC to control operations can provide stability and reliability by simplifying maintenance, keeping voltage output within a specified range, and allowing easy adjustments as needed.

Finally, addressing losses from the demand side, through technology like smart metering, presents significant loss reduction opportunities. For example, a report estimated that energy consumption could be reduced by 2.8% if homes used smart meters, combined with home display units. This could then reduce distribution network losses by 5.5% due to the decrease in consumption. In addition, the use of these demand response tools could potentially reduce losses by around 3% by moving some of the load from peak to off-peak period.

Get started on improving grid efficiency

For a more in-depth look at how distribution networks can start improve efficiency and reduce losses, read our use case “Grid efficiency – reduction of technical losses.


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