Line Loss Factors
What are they?
As electricity flows through the transmission and distribution networks, energy is lost due to heating of conductors, caused by electrical resistance. These losses are equivalent to approximately 10 percent of the total electricity transported between power stations and market customers.
Energy losses on the network must be factored in at all stages of electricity production and transport to ensure the delivery of adequate supply to meet prevailing demand and maintain the balance of the power system. In practical terms, this means that more electricity must be generated than is required by consumers to allow for this loss during transportation.
The impact of network losses on retail prices is mathematically represented as Transmission Loss Factors (TLF) and Distribution Loss Factors (DLF). Loss factors are calculated and fixed annually. Site-specific loss factors are determined by location, connection type and level of voltage.
How are they represented?
All energy retailers must include loss factors as part of their electricity bills but the way in which they are represented can change depending on the billing structure of the energy retailer.
Some examples of how loss factors may be represented on an electricity bill are outlined below:
Line loss represented as kWh’s lost:
Line loss represented as TLF & DLF uplift percentages:
Line loss represented as TLF, DLF & Total Loss Factor percentages:
(Note: Rates shown are inclusive of line losses)
The general equation to find the billed $ Amount after line losses is the following:
$ Amount = kWh Consumed x Rate/kWh x TLF x DLF