Blog Post 6: Improve efficiency by reducing line losses

Utility regulators are demanding that utilities eke out all possible efficiencies to keep rates in check. And, let’s face it; efficiency is good for the bottom line too. For North America, a 1% savings in utility operating expense can represent approximately $500 million in annual savings. Line loss represents a common inefficiency on the electric utility grid. On average, around 6% of electricity is lost on the T&D system according to various studies.

With the right distribution analytical tool such as Volt-VAR optimization (VVO), utilities can drop line loss from 6% to 2-3% and achieve optimal management of the voltages and VAR flows across the distribution feeders. Also, by reducing losses, utilities can free up capacity to serve additional load. However it’s important to consider the full dynamics of your distribution network. Solar PV, while in general reducing losses by supplying power closer to load points,  can introduce voltage problems in addition to other frequency and stability issues - especially given high penetration levels in some regions. While this can be offset to an extent via smart inverters, under some scenarios solar can work to undermine the benefits of VVO programs. Analytics can assist in forecasting and understanding the dynamics of VVO combined with solar/smart inverters and other types of distributed generation and distributed energy resources. Analytics can also be applied to examine and mitigate impacts of unbalance on three-phase system losses.

In my next series of blog posts I will identify and describe various ways that grid analytics help utilities improve transmission planning and operations. On this it is important to note that while in this blog post series I am differentiating between transmission and distribution, in today’s world with increasing generation within distribution networks, distribution has an increased impact on transmission and it is important to consider the two types of networks in combination.