Transmission Losses in India

In this article, the power sector is reviewed with specific focus on transmission and distribution system losses.

Transmission and Distribution (T&D) losses are a percentage of energy lost in the power grid in the process of transporting electricity from generating stations to points of consumption. The concept of Aggregate Technical & Commercial (AT&C) losses was introduced in India in the 90s. It provides a picture of energy & revenue loss situation at the distribution level. The AT&C losses comprise two elements namely:

 Technical losses, which are entirely in the transmission and distribution systems
 Commercial losses, which are in revenue realisation, and pilferage in distribution systems.

With the aim of reducing losses and improving the power distribution sector of state utilities, the Union Government has launched the RestructuredAccelerated Power Development and Reforms Programme (R-APDRP). The Government has notified mandatory labelling of distribution transformers to ensure distribution transformer losses are minimised. IT-enabled system has been introduced for energy accounting and Supervisory Control and Data Acquisition (SCADA) for big cities. In broad terms, the power sector is expected to achieve break-even at T&D loss levels of around 20 per cent or so for the utilities to make profits.

T&D losses are at the level of 33 per cent with huge revenue losses to the distribution utilities. The transmission losses are further sub-grouped depending upon the stage of power transformation & transmission system as transmission losses (400kV/220kV/132kV/66kV), and as distribution losses in 33kV and lower levels of transmission. The commercial losses are caused by pilferage due to theft, defective meters, and errors in meter reading, and in estimating unmetered supply of energy. The technical losses are intrinsic to the power transmission system and are caused due to I2R losses, transformer losses, insufficient reactive compensation, and other ill-maintained equipment losses.

Loss Reduction Techniques

Table 1 reports the year-wise T&D losses by CEA, and AT&C losses by Power Finance Corporation (PFC). Free electricity without metering to agriculture has been unaccounted on average which is about 40 per cent of electricity generated in the country. The major portion of losses of the utility is due to theft and pilferage. Figure 1 shows the trend of transmission losses over the net electricity generated.

Withdrawing free and unmetered power supply to agriculture sector is very difficult politically. Charging flat rates and metered supply is assured with high quality power. Separate feeder to agriculture is provided in a roster of farm power supply through separate feeder along with high quality power. Implementing High Voltage Distribution System (HVDS) as segregated feeder to farmers has been attempted as free and subsidised power to agriculture. HVDS feeder provides quality power and stops theft or illegal tapping of power.

The transmisiion losses in distribution system has two categories technical losses that are not paid by customers and nontechnical losses, that are high in distribution system that can be reduced within limits by adopting different loss reduction techniques.

Technical losses are related to the material properties and its resistance to the flow of current that is dissipated as heat in the transmission lines and distribution transformers. The non-technical losses are caused due to:

 Poor electrical terminations among lines switches and transformer and other
equipment in the distribution network to the consumer
 Frauds in energy meters and theft of energy by illegal direct tapping from live lines
 Diversity of readings and deficiencies or losses in energy measurements.

High rate of technical and nontechnical losses causes poor quality of service to customers, high cost of premature investments for development, reduction in revenue collection by utilities leading to financial stress. Major losses make the Utilities to look for subsidies from state budgets. The loss reduction techniques are:

 Perform regular inspection to randomly selected and any suspected customers.
 Install new meters at the primary substation to measure the internal consumption and invoice the company to avoid considering substation consumption as losses.
 Survey and identify the defective meters to replace them, and replace meter seals with new tamper-proof ones.
 Conduct regular campaign to increase the customers’ awareness with the efficient use of electricity.

On the other hand, technical losses can be reduced by taking the following actions:

 Install capacitor banks.
 Re-conductoring overloaded lines with bigger conductors.
 Avoid any overloading of system and monitor the progress in losses reduction.
 Disconnect unloaded transformers to avoid no-load losses. Balance the transformer loading to reduce the neutral current and power losses.
 Upgrade transformers to match the load and the installed capacity, and to replace old/ degraded ones.
 Ensure that all industrial customers are meeting the requirement of 0.9 PF.
 Perform regular preventive maintenance.  Ensure the frequent live-line washing to reduce the leakage current.
 Use of advanced technology to manufacturing electric machines, generators. Motors and transmission line conductors with super conducting materials
 Energy conservation in utility systems and appliances
 Energy auditing in industry and commercial centres
 Use of energy efficient appliances and behavioural practices of energy uses
 Use of High Voltage Distribution System (HVDS) to clusters of agricultural and bulk consumers
 Allowing differential and dynamic tariff pricing to peak load shaving and reducing losses  Developing High Voltage transmission networks between National and regional Grids
 Smart Grids and distribution automation with smart meters
 Use of ICT for electricity pricing, billing, collection and accounting system professionally  Shunt and series compensation systems in long transmission lines at appropriate locations
 Reactive power management in T&D systems.

Advantages of HVDS

Line Losses: The loss in HV system for the distribution of the same amount of power is less than 1 per cent as compared to that of LV line.
Voltage Drop: The voltage drop for distribution of same quantum of power is less than 1 per cent as against that in LVDS and this ensures proper voltage profile at all points.
System Power Factor: The single-phase motors can be used for all agricultural services. The single-phase motors have built in capacitors and the PF is more than 0.95 and almost unity. Thus, system power factor is maintained high.
Failure of Distribution Transformers: The length of LV lines is minimum. Thus, the failure of transformers due to LV line faults is minimised. The loading of transformer beyond its capacity is effectively prevented by consumers.
Theft of Energy: The LV lines are virtually eliminated and even the short LV line required is of Aerial Bundled (AB) cable, which makes direct tapping of lines a very difficult task.
End use equipment efficiency: The voltage drop for distribution of same amount of power is about 1 per cent that of LVDS and thus, the voltages at the consumer premises can be maintained satisfactorily.
Reliability of supply: The LV lines are short and insulated, avoiding all LV faults. The faults on HT line come to the notice of the operator immediately due to the tripping of substation breaker.
Voltage fluctuations: The voltage drop on the LV line is negligible. The additional drop due to extension of HV line up to consumer premises is also negligible. Thus, the voltage profile is very stable and no need to use voltage stabiliser.
 Capital Cost.
 Higher investment on transformation equipment. Larger capacity due to low diversity
 High cost/KVA due to small capacity of Distribution Transformers. Lower investment on short LT lines. Small size conductors are adequate causing low I2R losses due to low currents

Less number of conductors
 Operating cost.

HVDS is technically superior and provides ready solution to the problems of distribution system. Capital investment for new HVDS is 16.5 per cent lower than that of LVDS. The Peak Power loss and energy losses of HVDS are 33 per cent and 18 per cent lower than that of LVDS respectively. The peak power loss and energy losses of restructuring HVDS are lower. Restructuring of existing distribution network as HVDS is viable.

The strategy proposed for implementation of HVDS and its integration with the existing network is found to be technically feasible and financially viable. The restructuring of existing LVDS as HVDS is practically feasible and viable. This is technically feasible and least cost solution approach for reduction of losses in low voltage network.

The distribution loss is 20 per cent of the total AT&C losses. About 15.7 million people are below poverty level and 9529 un-electrified villages are yet to access electricity. The Government has taken initiatives such as;

 Smart grids
 IT enablement and automation
 High Voltage Distribution
 Demand side management
 Public Private Participation
 Power Trading practices
 Energy Efficiency Initiatives

The distribution infrastructure development in India needs the following Government initiatives.

 Policies and regulatory guidelines to implement smart technologies
 Initiatives to implement outage management, power quality management, demand response, renewable energy integration, energy storage systems, Use of Plug-in- Electric vehicle and associated charging infrastructure, Cyber security and developing communication infrastructure.
 On-grid and Off-grid renewable and distributed direct generation sources.

Policy Challenges

Indian power sector had been tightly regulated and controlled by State Electricity Boards (SEBs) until 1991, when economic reforms took place. The State Electricity Boards controlled the entire supply chain generation, transmission and distribution within the state with distorted tariff structure and high level of transmission and commercial losses resulting in inefficient, unreliable electric supply and near bankruptcy of the SEBs. The power sector reforms in late 1990s made the sector competitive through deregulation and private investment. Private investment in generation and distribution was allowed in 1991. By 1998, private investment in transmission was allowed. The Mega Power Policy in 1995 allowed incentive investments to accelerate power generation in above 1000 MW plants for capacity addition. The power trading company was formed in 1995 to trade power from private mega power plants and SEBs. The Electricity Regulatory Commission Act 2008 constituted the Central Regulatory Commission (CERC) and encouraged the states to establish the State Electricity Regulatory Commission (SERC) to regulate and rationalise the tariffs. However, the power sector remained commercially unviable till 2000s, demanding more policy reforms. The Electricity Act 2003 created a consolidated policy framework for generation, transmission, distribution, trading and consumption of electricity. The main features of the act are:

 Unbundling of SEBs for competition in generation, transmission and distribution utilities
 De-licensed thermal and captive generation
 Non-discriminatory open access to all generators to transmission
 Mandatory metering, stringent punishment to electricity theft and multi-year tariffs were introduced to curb financial losses of SEBs. Furthermore, advance subsidy from State Governments from budgets to offset losses for free supply to certain targeted consumers
Purchase Obligation from Renewable Energy Sources.

The amendment of this act in 2007 provided additional features such as;

 Elimination of cross subsidy and levy of surcharges on Industrial consumers to subsidise agricultural consumers
 Mandated two key policies:
– The National Electricity Policy 2005 to carry out the mandates of Electricity Act 2003 and address issues on rural electrification, recovery of cost of services and targeted subsidies.
– The National Tariff Policy 2006 to strengthen financial viability of SEBs and attract private investments. The Multi-Year tariff (MYT) aims at minimising risks to Utilities and consumers and reducing system losses.

Implementation of Ultra Mega Power Projects Policy in 2005 has been initiated to accelerate power generation for coal-based plants above 4,000 MW projects using supercritical technology through competitive tariff-based bidding and under Power Purchase Agreement (PPA) with distribution companies. Rural Electrification Policy 2006 aims at extending power supply to people below poverty line.

The key players in the Indian Power Sector, after Electricity Act 2003 and unbundling of SEBs, are a multitude of market players. The Ministry of Power (MoP) is responsible for planning, formulation, implementation and monitoring of the power sector policy. It coordinates two statutory bodies, six Public Sector Units (PSUs) on thermal and hydro generation, transmission and distribution and financing.

Initiatives for Reduction

The Electricity Act of 2003 instituted certain broad reforms: introduced elements of privatisation and created more consistent national rules governing the generation and transmission of power, but its provisions have been implemented only in some states and not at all states. The National Smart Grid Mission, 2015 will provide grants covering up to 30 per cent for upgrades to regional and local grids. A 20-year plan has been announced to upgrade the national transmission network, including an exemption from inter-state transmission charges for power from renewable sources. Discoms in many states have announced rate hikes ranging from 5 per cent to 45 per cent.

Full reform is towards complete privatisation, less interference by state governments in utility operations, and an end to free electricity for farmers.

In the cities, distribution companies intent on modernising— and getting customers to actually pay for their power rather than steal it—have been forced to broaden their scope. In any case, reducing power theft among the urban poor will solve only one of the many problems for India’s grid. Expanding the grid to reach every home and business would require many trillions of rupees. For many, gaining access to electricity through solar micro-grids and other local power sources that bypass the traditional utility model is a far more practical option.

Rooftop solar power or alternatively, microgrids powered by various combinations of small renewable installations and diesel generators are the only way their inhabitants will ever get reliable electricity. The results of the government’s first solar auctions have been striking. In other words, solar builders in India are bidding unrealistically low prices for these projects, counting on the Indian Government to make up the difference. The government has initiated a scheme for publicprivate infrastructure projects with grants to solar developers.

Ultimately, some combination of distributed solar power, local micro-grids, and large renewablepower plants will be needed to address India’s energy needs over the next 50 years.

Electricity conservation at home is possible by proper education to consumers. Power theft is widespread in developing countries and important economically as well as politically. Power theft is politically correlated. It occurs more often around election time when well-off farmers are allowed to exceed their allotted usage for private tube-wells.

Reducing power theft to more moderate levels requires policy changes:

 Power company officials need to be sheltered from political influence.
 The state government should adopt a policy of metering agricultural energy usage.
 A general policy study of the overall costs and benefits of the current electricity pricing scheme, which subsidises agricultural users.

For stable electricity supply, T&D system enhancement is essential. The power sector needs better products and solutions such as smart grids and metering, use of technology to map the network and energy-efficient equipment like transformers and switchgears.

Reducing T&D losses can be achieved by a system for accurate measurement of energy consumption, accounting for energy generated and its consumption by various categories of consumers and for energy required for meeting technical requirement of system elements. Efficient transmission and utilisation of power and need of efficient meter systems in the infrastructure are required. Advanced Metering Infrastructure (AMI) is the next generation meter system like smart meters that can communicate real time data consumption with the power provider. It can also link load control instructions from MicroEnergy Management System to the operation and control of local devices, thereby, reducing the consumers’ energy consumption.

Smart grid is one of the key components of this transformation. A smart grid is a digital electrical grid with an information network that facilitates the gathering and distribution of information with regard to the usage of power by suppliers and consumers. This will lead to electricity services becoming reliable, efficient, costeffective, and environmentally conscious.

The other key component is smart metering which not only reduces theft and pilferage, but also helps the distribution companies collect data which can help in better load planning and management. There needs to be implementation of energy audit schemes for all big industries and utilities. It is important to set bench-marks for yearly reduction of T&D losses. Measures for reducing technical losses are identification of the weakest areas in the distribution system and strengthening or improving them so as to draw the maximum benefits of the limited resources. The central and the state governments should draw plans to provide financial support to the utilities for installation of meters at all the distribution transformers. The financial institutions should be encouraged to provide easy loans to utilities for taking remedial measures to reduce the T&D losses. It is a very important factor for efficient utilisation of energy.

Smart meters are highly functional electricity meters to collect power data and automatically send information on power use to electric power providers. The amount of electricity consumed in a building or home is converted into data in real-time and provided to the electric power provider over a network.

With Micro Energy Management System (MEMS), the operational control of devices consuming electricity, and consumers’ energy consumption can be reduced. This combined solution of smart meters and smart grids can empower the end consumer to manage energy better by availability of information.


It is extremely difficult to eliminate all the causes simultaneously to reduce transmission losses. Strategically, measures should be taken to reduce or marginalise the major causes of losses. The distribution losses can be reduced by proper selection of distribution transformers, feeders, proper re-organisation of distribution network, placing the shunt capacitor in appropriate places, theft control, adoption of upgraded technology etc. HVDS should be implemented at faster rate. Training of the operating personnel would result in improved system operation. The distribution companies should be ready for initial investment, keeping in view the future savings in energy. Restructuring of electricity supply system with automation and implementing smart grid technology and regulating the operation and performance monitoring of power systems by regulatory commissions are sure ways to reach the target levels in reducing transmission losses.