IMPORTANCE OF LOSS ANALYSIS

Purchased energy from generation companies entails monetary amount from purchasing distribution utility. Likewise, electrical energy lost during transmission and distribution especially during delivery to end-users means an equivalent lost in revenue. It is then only logical to say that Power Loss Study and Mitigation can help distribution companies minimize large financial sacrifices due to losses and help them improved their economic status. By understanding how losses occurs in a system will help equip distribution utilities in making necessary decisions in formulating a program to control power losses in their franchise.

Distribution utilities that can measure the extent of losses in their system will also be able to compare the monetary equivalent of this value to the possible cost of investment they are going to implement in order for them to correct such situation. They can be able to evaluate the cost of these losses versus the cost of the means to reduce it whether they will be able to justify all the capital cost needed. To simplify these statements, a loss reduction scheme will help decide what most favourable game plan to use.

Unfortunately, loss reduction programs are most of the time being neglected by some electric cooperatives simply because it does not impose a direct danger to their operation compared to other concerns like connecting new customers. Also, budget issues always get in the way of this activity that is why some considers it as a low-priority problem. Nevertheless, regardless of these problems, it seems that all utilities are in complete agreement that reducing and mitigating electric power losses is very essential.

Electrical Losses can be likened to an expense in a business, having this in your company only takes out money from your pocket and does not conform to your goal of having a good financial performance. Likewise, minimizing the system’s power loss means adding money to your savings making a business more productive and effective.

Reference: Distribution System Loss Reduction Manual, www.powersystem.org

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