Benefits of System Loss Reduction

Aside from impacting or not impacting electricity rates, system loss reduction has the following benefits:

• Reduction of fuel emissions due to lesser use of fossil-fuel generating plants - this has societal impact as it cover environmental concerns.
• Utility system capacity savings - decrease in losses provides released extra capacity for the distribution lines and transformers.
• Promotion of Energy Efficiency - it will be noted that the Distribution Utility (DU) is an energy-efficient electric company as it tries to decrease its system loss.
• Improvement of system voltage profile - the utility is regulated to supplying a range of voltage level and reduction of losses will produce a marginal system voltage quality that may be acceptable. This will also provide good power quality at the convenience outlets of consumers allowing their electric equipment/appliances to operate without mis-operation or loss of life.
• Increase Utility Commercial Appeal - a DU aiming at system loss reduction gets an added commercial appeal in the restructured power industry. This is important in the changing environment of the power industry, have you seen MERALCO TV commercials?

There is an optimum level of system loss reduction unique for all Distribution Utilities (DUs) where further reduction of losses will not result to further reduction of operation cost but more investment expenses. On the other hand, as demand rises in a distribution service franchise, technical losses and non-technical losses (utility own use) will at some point come with the demand increase. The equation of generation equals losses plus demand holds true. This is revealed by Philippine Power Statistics as shown in the figures below (the values include transmission and distribution losses, but this does not negate the point) :

Finding ways to reducing system loss must be a continuing program since it always provide benefits to the DUs and electric consumers.