For any grid operator, minimazing losses occuring during electricity distribution is a major issue to be able to invoice subscribers the whole production and monetize it.

Network economic profitability

Build a sustainable business model remains a challenge for utilities which must find how to monetize investments in manufacturing tools, in equipment and how to invoice the whole consumed energy. In a perfect system the invoiced consumption would be equal to the energy produced, yet the system faces some losses both technical and non-technical. If some countries knows low losses, other deal with huge financial losses with rate that can reach 20%. In this case 1/5 of production can’t result in invoice which can question the profitability of the utility business model and its ability to survive in the future.

As a result, operators have an interest to identify losses nature in order to minimize them and monetize their models. During transmission and distribution, two kinds of losses are identified: technical losses and non-technical ones.

Some technical losses to minimize

This first category is impossible to eliminate totally because it exist losses incompressible. They happen during transmission and distribution and depend partly from distance travelled by the current to go from the source to the subscriber.

Several areas of improvement have been identified to reduce that phenomenon: an optimization of networks with less important distance to travel, a better sizing of cross sections… points on which utilities can work to reduce their losses rate.

In the same way, give importance to the quality of equipment and their capacity to meet environmental constraints can help to reduce technical losses. The guarantee of watertightness, of a high tensile strength and a low electrical resistance are essential aspects enabling to avoid burning risks or disruption on networks. It is necessary to watch the right use of the device regarding its function. Depending on the wish to operate a junction, a tapping, we won’t search for the same properties mechanical or electrical.

Non technical losses to limit

The second category of losses are non technical ones. They are the result to fraudulent actions on networks. Utilities have been able to identify several origins to fraud :

  • meter and circuit-breaker manipulation
  • pricking out upstream from the meter
  • illegal connection
  • equipment theft

If technical losses are difficult to stop, the second ones are easier to avoid with material and solutions aiming to prevent fraudulent actions. Thanks to non-dismountable products, sealed material, equipment expected to inhibit pricking, a power company can endow a system guaranteeing network safety especially for service connections.

In order to compensate financial losses and equipment ones, a utility has to work on the improvement of its installations to prevent electricity theft and get relation consumed electricity / invoiced electricity more balanced. This work will enable to better anticipate and manage the production. Manufacturers of electrical equipment work closely with utilities to design fraud preventing systems suitable to local demands regarding the ease of maintenance, environmental constraints and specific standards requirements.

Even if it is recommended to implement the system and to replace the integrality of material (cables, connectors…), it is also possible to find compromise to install protections on existing service lines and thus better smooth investments over the time.

If fraud is most of the time voluntary, we can also point out in non-technical losses the non-recovery of invoices. Final users can’t pay the energy they have consumed which lead for the network operator to financial losses. This is regularly observed for new subscribers. Companies must alert users to the quantity of energy consumed and limit the consumption in general. Thanks to power regulators, devices which control and help the management of consumption, it is easier to invoice up to its real value and anticipate it.

Reducing non-technical losses is before all the implementation of means to oversee the energy consumption and watch fraudulent manipulations.

Network improvement

If in many cases, losses are due to external factors to the power company, this one must also play an active role especially regarding team training. Fitters must be competent to realize an installation respecting the rules of the trade, adopt best practices for an effective implementation and resistant in the time. It is quite common to see cable in surplus on the lines waiting for a tap connection to come with the core exposed and not protected from bad weather. In order to prevent omissions and errors during installation, manufacturers develop solutions which guarantee watertightness, good tightening in connections thanks to shear head screw for example or color indicator, marking on products to indicate installation steps… many solutions avoiding an earlier degradation of material very expensive for a company.

Moreover, to give means to improve existing networks it is necessary to develop equipment with a dimensioning adapted to needs regarding electricity demand while having considered available budgets, environmental constraints. Those several points taking into account, joined to qualitative solutions will assure viability and sustainability of power companies and their electrical network by reducing losses.


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