Distribution System Loss and Smart Meters

Distribution System Loss and Smart Meters

August 11, 2019

The power sector in Nepal is primarily hydro based with installed capacity of about 1100 MW. Nepal Electricity Authority (NEA) is the vertically integrated national utility which owns and operates generation facilities at around 50 percent of the total installed capacity. Independent Power Producers (IPP’s) account for around 26 percent by hydro-capacity in the country. The transmission network in Nepal, owned by NEA, consists of more than 2,129 circuit km of 132 kV, 511 km of 66 kV, and around 4,900 km of 33 kV power lines. Customer services are provided with around 36,000 km of 11 kV distribution lines. NEA has more than 4 million customers which are categorized in commercial, industrial, domestic (or residential), etc.

NEA buys electricity from IPP’s to supplement its own generation capacity. To stimulate rural distribution, NEA has adopted the concept of community rural electrification program. Rural participation in the program is overwhelming: NEA’s invitation for proposals on operating the distribution system by the community themselves has led to 290 agreements already in place. Total numbers of consumers served through the program exceeds 500,000. To expand access to electricity, various donors are supporting Government of Nepal (GoN) in expanding the medium and low voltage distribution network. This initiative is aimed at connecting rural consumers by NEA. Funds have been supported mainly from the World Bank (WB), Asian Development Bank (ADB), and Japan International Cooperation Agency (JICA) as a combination of grants and loans for transmission and distribution network expansion.

NEA does not have a Distribution System Master Plan (Master plan) though some sporadic works have been done in the past to prepare ad-hoc electrification and distribution projects. This has resulted in unplanned and improper electrification using suboptimal technical solutions, and has contributed to high distribution system loss. The Distribution System Master Plan is being prepared by NEA with the financing from ADB.

NEA is engaged in an ambitious program of improving the situation by both enhancing access and improving the quality of electricity service. A key aspect of this program is to curtail power system losses to acceptable levels. Currently, the system loss of NEA stands to 17 percent, which incorporates both technical and non-technical losses. Many activities too have been carried out to reduce the system losses: such as conductor upgrade work for 132 kV cross border transmission line, and capacitor banks installation in some substations as initiatives to reduce the system losses. What persist are the non-technical losses, such as leakages ? NEA has been trying hard to address these critical issues through introduction of electricity leakage control act. NEA now wishes to understand more fully the nature and incidence of existing system losses and to develop a focused program to reduce both technical and non-technical losses to acceptable levels over a reasonable period.

Distribution Losses in the context of Nepal

Nepal has the distribution loss of 11.28% in fiscal year 2018/2019 whereas it had the loss of 14.82% in fiscal year 2017/18.

From various studies, it has been estimated that non-technical loss contributes around 3% of the overall energy supplied. It means that, in the context of Nepal, technical loss is around 8.28%.

A deeper analysis of Nepal’s distribution loss data shows that Janakpur region has the highest contribution (19.46%) among all. Janakpur region doesn’t consume the highest MWh of electrical energy but it contributes the highest MWh of losses. There are two facets associated with the data. First is the economic status of the region and second is the socio-political aspect.

Janakpur region has fewer industries and commercial consumers. That’s why bulk amount of electricity cannot go to heavy consumers whose consumption is properly billed with Time-Of-the-Day (TOD) meters. Domestic consumers are the largest consumers of electricity, where the losses in distribution lines (extended inappropriately to give access to remotely located consumers) is more. Observations and general trend has shown that Terai region of Nepal has more pilferage of electricity due to economic status of people and deeply ingrained socio-political values. This has also contributed to increased distribution loss.

Nepal Electricity Authority has made significant improvement in reducing distribution loss 11.28% from 14.82% of previous year. Per percent of distribution loss reduction benefits NEA with approx. 74 crore rupees, and loss reduction of 3.54% has benefitted 2 Arba 62 Crore Rupees to NEA. Loss reduction has two fold benefits to NEA and the country. Firstly, profit margin of NEA increases. Secondly, NEA can invest surplus benefits in the field of additional generation, transmission and distribution resources. It will positively impact the socio-economic situation of the whole country.

Around 100 MW of total generated power is lost due to theft reports the NEA. In December 2016, the utility expressed its interest in deploying smart meters to reduce electricity theft and optimize its revenue collection across the country. The utility firm kick started a pilot project of a new smart metering system in Kathmandu valley to test the ability of smart meters to help the utility to control its technical energy losses as well as improve its management of the energy distribution system through the availability of real-time grid event data.

Kathmandu Valley Smart Metering Project

This project will modernize the distribution business and improve financial health of NEA with reduction of distribution losses and increment of overall efficiency of distribution system operation.NEA intends to introduce smart meters and deploy Advanced Metering Infrastructure (AMI) System with its auxiliary system all across Kathmandu valley (Kathmandu, Lalitpur and Bhaktapur) within a radius of 220 sq. miles. Through AMI implementation, NEA aims to mirror benefits to the customers that can be seen in a number of countries and replicated in Nepal Electricity Authority (NEA). In the initial stages of program rollout, immediate benefits such as reduced meter reading costs, access to time of use-based tariffs and cut back in Aggregate Technical and Commercial Losses (AT&C) losses will be realized. Hence, Nepal Electricity Authority (NEA) plans to implement Advance Metering Infrastructure to bring about reform in distribution sector.

The project is to design, supply, establish, install, testing, commissioning, operate and maintain the Advanced Metering Infrastructure (AMI) for consumers equipped with Single Phase and Three Phase Whole Current meters. The first stage of overall smart metering project shall include 90,000 metering nodes in areas of Kathmandu central region and Kathmandu northern region (Maharajgung and Ratnapark) with an approx. area of 60 sq. miles. AMI system includes communications links provided by Network provider, which is the backbone of AMI. The communication infrastructure is based on RF mesh network and GPRS/GSM system. Further, communication network shall provide reliable medium for two-way communication between various nodes (smart meter) & HES.

The project is supposed to increase the accessibility of real-time data and provide all information on a single console in an integrated manner with the possibility to remotely control entire network, increase operational efficiency and to establish network platform that can support multiple applications like AMI, DMS, DER, Street Light Management and Home Area Network etc. over a single communications platform using RF communication technology. Hence the Network canopy is to be established using RF communication technology which shall communicate with field devices using intermediate network elements such as routers/repeaters/ collectors/ gateways/ data concentrator units/access points etc.