The document discusses network losses in electricity transmission and distribution systems around the world. It provides data on electricity use and network losses by country/region. Network losses are broken down into categories including variable copper losses, fixed iron losses, and non-technical losses. The optimal utilization rate of distribution networks that considers loss costs is estimated to be around 30%. Country-specific data on network losses is also presented, such as components of losses in Poland broken down by voltage level. Overall, the document analyzes factors contributing to network losses and historical trends in losses by country.

1. Network Losses
Roman Targosz, PCPM, cem@miedz.org.pl
Webinar
April 11, 2008

2. Introduction
Country / region Electricity Network Network
use (TWh) losses losses
(TWh) (%)
Europe 3 046 222
including Western Europe 2 540 185 7,3
Former Soviet Union 1135 133 11,7
North America 4293 305 7,1
World Latin America 721 131
Including Brazil 336 61 18,3
Japan, Australia and NZ Azia 3 913 381
including: Japan 964 44 4,6
EU 15 Australia & New Zeland 219 21 9,5
China 1 312 94 7,2
OECD North America India 497 133 26,7
Africa and Middle East 826 83 10,0
China
TOTAL 13 934 1215 8,8
Middle East
Africa
Indonesia
Russia
Mexico
Brazil
India
0% 5% 10% 15% 20% 25% 30%
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3. Country / Region Electricity net T&D losses Distribution Effective efficiency Efficiency at
production 2002 transformer 50% load
International losses
Energy Annual
2002 - IEA
USA 3802 TWh 230 TWh)1* 140 TWh)2* 97,22%)3* 98,4%
Rest of North America - Mexico, 782 TWh ~60 TWh)*4
Canada
EU 25 2747 TWh 201 TWh)[15] 55 TWh) 5* 96,59%)5* 98,79%)5*
Other Europe Western and 503 TWh ~20 TWh 8 TWh)7* ~97%)7*
Eastern
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] 96,8% 97,7%
5,35 TWh 97% 97,9%
4,41 TWh 97,5% 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% nard o-e ne rgy.org
www.le o of electricity generated, efficiencies based on AA’ type as base case – [8]
*6 Only for transformers up to 200 kVA ratings
*7 ECI estimates

4. 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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5. Network losses components based on
OFGEM
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6. Losses – types based on OFGEM
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7. Network losses components – case of Poland
%
Part Network Losses I, II, III I + II I + II + III
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%
I
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%
LV + MV Commercial recorded -2,76% -1,72% -1,40%
source: Politechnika Czestochowska
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8. case of Poland – continued
100,00% 62,58% 50,78%
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%
II
Iron 110/MV transformers 9,54% 3,57% 2,89%
Copper 110/MV transformers 3,73% 1,40% 1,13%
110 kV Commercial 110 kV -1,30% -0,49% -0,39%
100,00% 37,42% 30,34%
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%
Transmission Corona - lines 400 kV 23,85% 4,50%
III
system Iron 400/220 kV autotransformers 0,92% 0,17%
Copper 400/220 kV autotransformers 0,41% 0,07%
Iron 400/110 kV autotransformers 2,93% 0,55%
Copper 400/110 kV autotransformers 0,89% 0,16%
Iron 220/110 kV autotransformers 5,20% 0,98%
Copper 220/110 kV autotransformers 1,88% 0,35%
100,00% 18,88%
100,00% 100,00% 100,00%
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9. Network losses components
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10. 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
BE IA
LG
IU
M
C
YP
R
C
ZE
D C
EN H
M
transformers
A
R
ES K
TO
NI
FI A
N
LA
N
FR D
AN
G C
ER E
M
AN
G Y
RE
E
C
HU E
N
G
A
IR R
EL
AN
D
IT
AL
Y
LA
TV
IA
LI
TH
U
A
τ
LU
Ts
βs
XE
M
B
M
AL
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TA
N
ET
H
ER
PO L
Average load calculated
LA
N
PO D
R
TU
G
SL
O
VA
K
SL
Loading characteristics of distribution
O
VE
N
SP
AI
SW N
ED
EN
U
K

11. 0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
16,00%
18,00%
EU25
AUSTRIA
BELGIUM
CYPR
CZECH
DENMARK
ESTONIA
FINLAND
FRANCE
GERMAN
T&D losses – EU25
GREECE
HUNGAR
IRELAND
ITALY
T&D losses EU25
LATVIA
LITHUA
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LUXEMB
MALTA
NETHERL
POLAND
PORTUG
SLOVAK
SLOVEN
SPAIN
SWEDEN
UK
NORWAY

12. 0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
EU (25)
Austria
Belgium
Cyprus
Czech Republic
Denominator?
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
related to net generation
Latvia
related to final consumption
Lithuania
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Luxembourg
Malta
Netherlands
Poland
Final consumption or net generation?
Portugal
Slovakia
Slovenia
Spain
Sweden
United Kingdom
Norway

13. 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
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7.3 7.3 7.3

14. -3,00%
-2,50%
-2,00%
-1,50%
-1,00%
-0,50%
0,00%
0,50%
1,00%
EU25
Trend
AUSTRIA
BELGIUM
CYPR
CZECH
DENMARK
ESTONIA
FINLAND
FRANCE
GERMAN
GREECE
HUNGAR
IRELAND
ITALY
LATVIA
LITHUA
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LUXEMB
MALTA
NETHERL
T&D losses EU25 - annual changes between 1999-2004
POLAND
PORTUG
SLOVAK
SLOVEN
SPAIN
SWEDEN
UK
NORWAY

15. Improving system efficiency
AVAILABILITY
LOAD OF SYSTEM GENERATION PROCEDURE
COMPONENTS
MINIMUM POWER DEMAND
SYSTEM
CONFIGURATION
POWER FLOW
SHORT-CIRCUIT
CALCULATION
CALCULATION
(SYSTEM LOSS)
SHORT-CIRCUIT NO NO SYSTEM LOSS
LIMITS MINIMUM
OK YES
LOW LOSS
CONTINGENCY
SYSTEM
CALCULATION
CONFIGURATION
CONTINUITY OF NO
SUPPLY
OK
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16. 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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17. 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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18. 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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19. Network losses – are they addressed by policies
and measures?
general cross-cutting policies and measures having an impact Generators efficiency
on energy efficiency on the demand-side by generally altering Low carbon technologies
price ratios: energy/CO2 tax, emissions trading, sustainable
subsidy reform
energy efficiency programmes and services specifically Energy end use: appliances, buildings,
targeting relevant market actors, a field of application or an systems
energy-efficient technology (e. g., financial incentive Network losses marginally
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 All energy chain
production standards and labels, regulation of natural Opportunity for network losses reduction
monopoly segments, spatial planning and other planning
instruments like infrastructure planning, R&D support
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20. Extra losses due to harmonics
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21. 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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22. 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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