How Utility Electrical Distribution Networks can Save Energy in the Smart Grid Era

Annual electricity distribution losses average 4% in the European Union. These losses represent 7 billion Euros in annual waste. New regulations are forcing electrical distributors to enhance efficiency across their networks. Network operators are also challenged to integrate alternative energy generation and electric vehicles into their grids. This paper offers a strategy for leveraging smart grid tools that will help meet and exceed regulatory efficiency targets. Efficiency of electrical distribution is rarely planned or managed by utilities. The unfortunate result is that most utilities waste substantial amounts of electricity. In fact , annual electricity transmission and distribution losses average 6% in the European Union. 1a,b Assuming 2% for transmission and 4% for distribution losses, that represents 7 billion Euros in energy wasted every year in distribution. This number includes losses in the medium and low voltage lines and in primary and secondary substations. As a result of recently announced government mandates, Distribution System Operators (DSOs) will need to improve the efficiency (lower the loss rates) of their electrical distribution networks by 1.5 % each year. In addition, they are tasked with finding new ways to integrate smart grid drivers such as electric vehicle charging stations and alternative energy generation (wind, solar) at consumer locations. Today it is both possible and prudent to plan, measure, and improve transmission and distribution efficiency. Improvements can reduce operations cost by enabling the installation of equipment and software that communicates and integrates throughout the distribution path. This paper explains how electrical distribution efficiency can be modernized to leverage the new promise of the " smart grid " while reducing distribution-related losses and associated costs (see Figure 1) 2. Ramifications of the European Union's Energy Efficiency Directive are discussed, and best practices for deploying energy efficiency solutions are reviewed. In the domain of electrical efficiency, it is always helpful to define common terms so that confusion is avoided when concepts and best practices are discussed. Below are a few terms that are utilized in this white paper and the associated definitions: Detailed analysis of network losses in a million customer distribution grid with high penetration of distributed generation " ,