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Northern Powergrid announces plan to cut network losses

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Northern Powergrid has announced a new plan to forecast and reduce losses on its power network.

Distribution network operators (DNOs) are required to reduce losses and until the current price review period they had financial incentives to do so. However, lack of data meant that was problematic. Instead, in the current price review (ED1) a condition of DNOs’ licence requires them to have a losses strategy and report on it annually. They are also required to establish a baseline for losses so a new incentive can be introduced in the next price review period.

There are, however, discretionary financial awards available for DNOs who go further in reducing losses in this price review. These total £10 million in 2018-2019 and £14 million in 2020-2021.

Northern Powergrid has announced a six-point plan. It aims to:

  • Select equipment and installation designs across the full range of  engineering activity to reduce losses. and bring forward work programmes to target losses reduction when justified by cost/benefit analysis;
  • Use the information flows from smart meters as they become available to better understand, estimate and forecast losses;
  • Use demand side response  to reduce peak loads and existing reinforcement programmes, reducing losses;
  • Review network configurations in design and operation to establish whether the network can be configured to reduce losses and when necessary make these changes;
  • Work with energy suppliers, police forces and other stakeholders to disconnect illegal and/or unsafe connections; 
  • Develop an understanding of losses data sufficiently to consider the re-introduction of a financial incentive on losses performance in the RIIO-ED2 period.

The six-steps were developed following stakeholder collaboration, involving workshops and an open consultation. “Our stakeholder engagement has really opened up our thinking on losses,” said Phil Jagger, smart grid development engineer at Northern Powergrid. “At one event it was suggested that the cost of losses should take into account the variable electricity price during the day and the year, rather than an average annual price.  As a result we are now considering an approach that considers valuing the spot price of losses in our investment decisions.

“Losses are a critical issue and one we are increasingly able to tackle with new information and technology.”