Assessment of the investment effort in HV and MV networks to reduce energy losses

In re-regulated markets, the maximization of profits creates the tendency to postpone investments in the network infrastructure, with negative effects on losses. In order to oppose this tendency, several countries adopt regulation directives that reward the distributors if losses are reduced and penalize them if losses increase. This is the case of Portugal which adopted loss penalty/reward scheme may be found in [1]. Given the current framework, EDP Distribuicao (EDP Group), Portugal, a Distribution System Operator (DSO), has established a loss reduction program, which includes line reinforcement investments, among other actions. The main idea is to make the best investments in HV and MV network lines, considering the trade-off between benefits and costs. The ideal scenario would be, of course, to analyse all HV and MV networks and simulate possible reinforcement alternatives. However, the large number of MV feeders (about 4,000) makes this alternative unworkable. Thus, the first phase consists of developing a procedure to rank MV networks according to their potential to reduce losses. The highest scored networks are then analysed using a power system simulator. This analysis takes into account the different reinforcement alternatives and evaluates the investments costs and the saved energy over a period of 30 years – the economic time span usually considered by EDP Distribuicao for this kind of operation. For the HV case, all networks were analysed. This paper synthetizes the main results obtained in these studies.