The true cost of energy losses

Dominic Quennell says losses on distribution and transmission networks have a high cost in emissions as well as money.

Renewable generation reached a record high last year, and it’s pleasing to see the government lead a global charge to combat climate change. However, if we want to deliver real, sustainable results then we need to look to all parts of our energy network.
Central to this is how we deal with energy losses. The same government statistics that revealed renewables neared 30 per cent of total energy also exposed an alarming trend – energy losses continue to rise.

The costs of losses are drastic both financially and environmentally. Last year, energy lost in our transmission and distribution system totalled 26,322GWh. This is enough to power almost seven million homes and constitutes around 1.5 per cent of carbon emissions. Worryingly, these emissions make up a third of the amount the UK must cut each year to meet the government’s 2050 carbon target.

Losses occur in transmission and distribution networks when, over long distances, the current loses sync with the voltage. This leads to a portion of the generated power being converted into reactive power, meaning less usable energy comes out of the cable at the end. Voltage drop also occurs, which means more current is needed to service the demand for power, increasing fuel burn at the power station.

The implications of losses are twofold: they drive up customers’ bills and damage the environment.

If energy is lost throughout the system, then more must be generated than we need for consumption. Customers absorb the cost of this extra generation, paying for energy that never reaches their home. Based on Ofgem’s calculations of the societal cost of losses, the cost of energy lost last year was almost £1.3 billion.

Over-generation adds to our carbon emissions. Added to this, peaking plants, which operate intensely for short periods to meet high demand, are predominantly fossil fuel driven – reducing losses would reduce the need for these plants.

Because of our outdated cabling network, we are also failing to harness renewables fully. We waste energy as wind and solar farms fail to meet thresholds. Though wind turbines turn, and solar panels soak up solar rays, energy generated is going nowhere. Because of losses in traditional cables, renewables have to generate above a certain threshold before the energy can travel through the transmission and distribution network.

If we want to meet our emissions targets, we need to look at new ways of reducing losses, which can be done while protecting the environment and consumers.