Non-Technical Electricity Losses
Abstract
:1. Introduction
- Fraud—when the electricity consumer deliberately tries to deceive the utility company by, for example, tampering with the electricity meter such that a lower energy consumption (kWh) is shown than is the case.
- Stealing Electricity—this is the practice of bypassing electricity meters by connecting consumers directly to electricity supply points, such as public lighting or a nearby distribution transformer via illegally installed conductors (cables or wires).
- Billing Irregularities—these can be either unintentional or intentional irregularities. An example of an unintentional irregularity would be where the utility company issues incorrect bills to consumers due to a systems failure while an intentional irregularity could be utility company employees knowingly recording meter readings or issuing bills that are less than should be the case.
- Unpaid Bills—where electricity consumers decide not to pay the bill that is owed with the outstanding debt being carried by the utility company.
2. Scale and Impact of Non-Technical Losses
- During 2011, non-technical losses in Colombia were equivalent to approximately USD 2.0 million per month, which corresponds to 14.7% of the energy generated [12].
- At the end of 2013, the Jamaica Public Service Company Limited (JPS) reportedly lost approximately USD 46 million in revenue (or approximately 18.0% of its total fuel bill) as a result of electricity theft by an estimated 180,000 unmetered consumers [16].
- In 2015, the South African utility ESKOM reported that about USD 350 million worth of electricity was lost to theft [17].
- The Brazilian Electricity Regulatory Agency (ANEEL) estimates that 5% of the energy injected to the distribution grids is lost because of fraud and theft, and from 2017 data, it was estimated that the non-technical losses generated a negative impact of BRL 8.15 billion, approximately EUR 2.3 billion [18].
- If power consumption in a region increases to a level where the average demand exceeds the rating of transformers or other electrical equipment, for example due to power theft, this can lead to power quality problems such as voltage collapse or transformer overloading which could result in load shedding. Frequent power cuts will lead to a deterioration in the customer–utility relationship, as consumers do not believe that the utility is capable of supplying the necessary service which could exacerbate the problem of non-technical losses as consumers refuse to pay for an ever-deteriorating service.
- Illegal connections to the electricity network often traverse roads, fields and footpaths and present a safety risk for communities who must go about their normal daily activities with the risk of coming into contact with live cables or wires that have not been properly installed.
- Electricity meters are usually co-located with fuses, circuit breakers, residual current earth leakage detection and other safely devices. Bypassing of a meter will often lead to unintentional bypassing of this protection, creating the risk that electrical faults or excessive demand within the house may not be detected. The supply will remain live within the house, increasing the risk of electrocution or fire. The demand on the local network may also exceed its capability, leading to disturbance to other local customers or damage to utility equipment.
3. Contributing Factors to Non-Technical Losses
3.1. Affordability
3.2. Customer–Utility Relationship
- Increased electricity tariffs to cover the cost-of-service provision from a reduced compliant bill paying consumer base;
- A reduction in the quality-of-service provision such as deferred capital expenditure, a slower customer connection rate or delays to planned maintenance activities;
- A reduction in the funding of public services such as education or healthcare if government funds are diverted to stabilise the financial performance of the electricity utility.
- Sierra Leone where, due to insufficient revenue, the overhead distribution network for the low-income eastern part of the town was cannibalised for spare parts to repair the network of the high-income western part of the town leaving many customers without power [29];
- Liberia where the CEO of LEC in an email (P Buckley 2021, personal communication, 20 August) confirmed that the detection and replacement of faulty meters usually took weeks or even months, and due to lack of electricity supply resulting from the faulty meter and the long-time taken to rectify the situation, customers often bypassed the meters thereby consuming electricity without paying for it;
- Latin America where state owned utilities were performing poorly and an ever-deteriorating service quality to customers created a vicious downward circle, or low-level trap, where the willingness of the population to pay for higher tariffs steadily declined over time, thus reducing the income source for the power sector and deepening the crisis [3].
3.3. Culture of Non-Payment
- During the early 1990s in Armenia, common explanations for the non-payment of electricity included: the government owed salary arrears or pension arrears, savings disappeared from bank accounts at the end of 1993, and public sector employees often stated that until wages were increased, they would not pay their utility bills [25].
- There can be long delays associated with obtaining an official connection which leads people to seek alternative means of obtaining electricity. For example, it can take up to 450 days in Madagascar and 455 days in Guinea-Bissau to obtain a grid connection [31].
- In Liberia, according to an email from the CEO of LEC (P Buckley 2021, personal communication, 20 August), in a post-civil war post-Ebola virus environment, non-payment of electricity bills is seen as a minor transgression by many residential consumers who have had to endure and survive recent disasters.
- Many houses in developing countries are not built to a standard that facilitates connection to the electricity grid, and if the utility refuses to connect a household until the necessary works have been completed, then this can contribute to consumers seeking an informal connection.
- According to the World Bank, people who live in informal settlements (“slums”) often respond to poor service quality by ceasing to pay their bills or stealing electricity. When the distribution companies attempt to enforce revenue collection, residents and organized criminals often become hostile to their efforts, resulting in the utility company withdrawing totally from the area. Consequently, after years of receiving a service at no cost, a culture of non-payment becomes engrained where consumers come to believe that they have a right to free electricity [32].
3.4. Corruption and Political Interference
4. Combating Non-Technical Losses
4.1. Prepay and Tamper Proof Meters
4.2. Reducing Initial Connection Charges
4.3. Strengthening the Law and Law Enforcement
4.4. Identify and Target the Worst Offenders
- the installation of high security tamper resistant metering systems (HSMs);
- monitoring of the HSMs via alarms and cameras;
- moving industrial consumers to a pre-paid system;
- incentivising customers by offering lower tariffs to comply with the installation of HSMs and pre-payment arrangements.
4.5. Regulation and Privatisation
4.6. Community Engagement and Other Measures
- Moving the point of metering from the pole-top, where they are open to interference, to the consumers’ premises where greater ownership for the equipment is likely;
- Reinforcement and upgrading of the T&D network to improve the quality of supply to consumers as well as more regular inspections of meters to ensure they work correctly;
- The installation of ready-boards, pre-packaged electrical panels comprising plug points and sometimes a light bulb, which are an alternative to conventional house wiring and are a way of providing power to houses which may be “sub-standard” in terms of building quality.
5. Role of Renewable Energy
- Even allowing for the rapid decrease in technology costs, especially solar PV, there is a large initial investment associated with the installation of rooftop solar PV. This is one of the main challenges associated with its adoption especially in developing countries that typically suffer from lack of access to electricity or experience significant amounts of non-technical losses. As such, government policies to provide finance or initial capital subsidies are necessary to promote the take-up of such schemes, but even if such policies are in place, lack of awareness of the potential of renewable energy among citizens in developing countries is a barrier to the deployment of such technologies. For example, in India there are government supports available to enable the deployment of rooftop solar PV technology, but because of lack of awareness about solar power systems, lack of education and poor training and development mechanisms people are not able to take the benefits of capital subsidies and other supports [42].
- The setting of adequate tariffs such that maintenance can be funded is a basic requirement. If adequate provision is not made for the maintenance and/or upgrading of DG systems (such as inverters and batteries in solar PV plants), then the reliability of the system will decrease, thereby straining the customer–utility relationship which could in-turn lead to an increase in non-technical losses, overconsumption, and in a worst-case scenario, a collapse of the electricity generating system, as was the case in the Sunderban Islands [26]. Striking the balance between access and affordability while at the same time ensuring that cost-recovery is achieved is a critical success factor.
- The design of electricity networks is typically based on centralised generation sources i.e., large power generating stations feeding power into the transmission system from where it was fed into distribution systems for supply to consumers. According to Passey [43], when penetration of DG rises above the network’s minimum threshold, more significant issues can arise in some networks, and changes to the network are required such as minimising VAR flows (reactive power flows), power factor correction, increased voltage regulation in the network and careful consideration of protections issues such as fault current levels and ground fault overvoltage issues. As a result, utilities may be hesitant to allow the widespread take-up of DG schemes until grid-connection standards and agreements are developed, and given the limited resources that are often available to utilities in developing countries, the development of such standards may not be prioritised, leading to a stagnation in development [43].
- Empowering the local community through the use of local workforce was referenced as being a factor in the success of the Brazilian Luz para Todos (Light for All) electrification programme [44]. However, developing competencies to enable local communities to undertake the installation, operation and maintenance on renewable energy systems takes time to build and is an ongoing requirement over the operational life of the asset. In India, due to limited institutional capacities for workforce training, a lack of available skilled and semi-skilled workers could jeopardise the achievement of the government’s solar rooftop target of 40 GW by 2022 [42]. Passey [43] highlights the need not only for the training of the local workforce in the operation and maintenance of DG installations but also the importance of post-installation assistance programmes to monitor the performance of systems and to deal with manufacturers in relation to warranty claims for the replacement of broken components. Many past and present aid-based projects have not taken this into account, resulting in failure of the installed energy generation system, or even worse, damage to equipment connected to the DG energy supply [43].
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
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Carr, D.; Thomson, M. Non-Technical Electricity Losses. Energies 2022, 15, 2218. https://doi.org/10.3390/en15062218
Carr D, Thomson M. Non-Technical Electricity Losses. Energies. 2022; 15(6):2218. https://doi.org/10.3390/en15062218
Chicago/Turabian StyleCarr, Darragh, and Murray Thomson. 2022. "Non-Technical Electricity Losses" Energies 15, no. 6: 2218. https://doi.org/10.3390/en15062218