The utility industry today has placed a high level of importance on improving efficiency. A proper review of losses experienced on a utility’s system can provide valuable insight into ways to manage these losses and improve efficiency while reducing wholesale power costs, improving voltage levels, and freeing up system capacity, potentially reducing costly investment in system improvements.

Electrical losses are a reality due to the physics associated with various system components that make up the power system. The effect of losses can be compared to a pipe that is being constricted as demand and ambient air temperature increase, thus limiting the amount of power and energy available at the end-use meter for the same amount of net generation put into the system.

Losses during peak times are of particular importance because this is when losses and their costs are typically at their highest. However, in today’s world of hourly energy markets and transmission congestion charges, this is not necessarily the case. Utilities now find themselves in a position where having knowledge of the average and incremental cost of power is no longer sufficient to determine the true cost of losses. Instead, the utility needs to be aware of the costs of power and delivery of that power during a myriad of widely divergent costing periods. To properly determine the true cost of losses, knowledge of when losses are being incurred on the system and the magnitude of those losses during different time periods is also needed.  

Power System Engineering, Inc. (PSE) is on the leading edge of research efforts to develop innovative techniques to evaluate system losses in today’s environment. The goal of these evaluations is to strike an economic balance between investment to lower the true cost of losses when considering all power supply and delivery costing periods, and the benefit derived from those lowered losses. Added detail in terms of the loss locations incurred across the system enhances the understanding of the relative contributions of various system components to total losses. Added detail in terms of the timing of losses allows more precise methods of valuing those losses. In combination, refined loss estimates can lead to improvements in identifying cost-effective loss reduction measures.