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What are Losses? Business Energy

The transmission between high voltage and low voltage circuits contributes greatly to this but so does the metering system and the method of calculation.

The consequence is that the energy price you pay covers the cost of significantly more energy than you actually use. Rather than charge you for more kWh that you use this extra volume is recovered via a higher unit price.

The fact that most metering systems in the UK are dumb i.e. they are not remotely connected to the system and instead require an infrequent manual meter read means that estimation is needed to ascertain not only the amount used at the meter point but also the amount lost in the distribution network.

The easy bit: If we think of the transmission system (the wires) as the motorway network and the distribution system (the underground connections to sub-stations) as the A-Road network then we can see the volume of traffic travelling down the transmission system from the generation point and into the distribution system. This is because key measurable entry and exit points are placed along the way or more specifically at the point of generation and release onto the transmission system and its subsequent entry into the localised network.

Unfortunately from there it gets murky. There are some 200,000 Half Hourly meters in the UK that measure demand in each half-hour and remotely send the data to the industry.

It is these meters alone out of some 26,000,000 in total that can actively report usage accurately to all parts of the network.

As a result the industry takes the volume of energy that enters the localised area or Grid Supply Point, subtracts that Half Hourly data, collates as much data as possible from their manual meter read network and estimates the remainder.

Unsurprisingly when they add this up it doesn’t equal the volume measured at the entry point to the distribution network.

As a result the Non Half Hourly meters in the system are subject to what is known as a Group Correction Factor. This is the calculation that effectively raises the volume ‘used’ by the individual meters.

Although this does not result in additional kWh being charged on your invoice (as your invoice should match your meter read) it does heavily influence the losses calculation and therefore your price will take account of this inefficiency in the process.

So from generation via transmission to the distribution zone we naturally lose energy from the system.

Once in the distribution system there is an inability to accurately measure usage, and further inefficiencies are experienced in transporting the energy around the distribution zone to the customer meter.

As a result the price you pay for a kWh of energy includes the ‘cost’ of this inefficient and poorly measured system. No matter which supplier you contract with this simple fact cannot change. Only the advent of smart grids can bring anything like the change needed for an efficient, accurate energy market. And that requires significant investment. And investment brings cost. A vicious circle but one the industry needs to wake up to fast.

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