Market Insights

Increasing Transmission and Distribution Efficiency for Decarbonization

March 15, 2023 by Claire Turvill

A study from Carnegie Mellon considers the effects of increasing efficiency in electricity delivery to ease the renewable energy transition.

Conversations about reducing global greenhouse gas (GHG) emissions tend to revolve around increasing the use of renewable energy for power generation. A recent study considers the possibility of reducing GHG emissions by instead increasing the efficiency of our electrical transmission and distribution (T&D) systems.

 

Could investment in transmission and distribution systems increase its efficiency? Image used courtesy of Pixabay

 

Inefficiencies in Transmission and Distribution Systems

Researchers from Carnegie Mellon, Lauren Janicke‒an undergraduate in civil and environmental engineering (CEE)‒and Destenie Nock‒an assistant professor of CEE, see investment in T&D systems as an equally viable option for reducing fossil fuel generation.

Inefficiencies in the electricity sector require additional energy generation to compensate for the loss. This “compensatory generation” creates excess emissions that could be avoided if T&D systems operated effectively. 

When comparing T&D systems globally‒how much electricity is generated versus how much electricity is delivered to the user‒the research study showed a 2% generation loss in Singapore systems, up to 60% generation loss in Haiti systems, and up to 5% loss in U.S. systems. 

About 2100 Terawatt hours of compensatory generation globally is necessary to make up for these T&D losses. This greatly impacts the scale of fossil fuel generation and the ensuing air pollution. 

It is worth noting that the increase in air pollution also has a notable direct effect on human health, especially in countries with carbon-intensive energy sources. Every year, around 10.2 million premature deaths are associated with fossil fuel generation and PM2.5  pollution. 

 

Renewable energy generation. Image used courtesy of Pixabay

 

Increasing Transmission and Distribution Efficiency

Increasing T&D efficiency can reduce emissions by minimizing the amount of energy lost during electricity transport from power plants to end-users. The energy lost during T&D is typically in the form of heat generated due to resistance in the transmission lines and transformers.

By reducing T&D losses, less energy is wasted, and less energy needs to be generated to meet the same level of demand. The researchers found that an increase in efficiency between 5% and 33% would reduce global median emissions by up to 40%. The effect of this reduction was shown to vary by pollutant type across the tested scenarios.

Within the U.S., subnational regulatory agencies enforce the regulation of T&D systems. The most prominent is the North American Electric Reliability Corporation (NERC). Each region of NERC has a unique energy profile, presenting various opportunities to reduce T&D loss.

State policy also influences opportunities for reducing emissions. A coal-dependent state like North Dakota and a natural gas-dependent state like Texas can make different state-level decisions to impact compensatory generation. On average, a high ambition regulation of a 5% cap on T&D losses can reduce compensatory generation by 60%.

The research team points out that increasing T&D efficiencies is not being presented as a fix-all option for reducing fossil fuel emissions. Instead, it is a worthwhile investment to reduce current emissions while transitioning to renewable energy generation.

 

Comparing Costs

The losses in T&D systems are distinguished by technical losses‒infrastructure inefficiencies ‒ and nontechnical losses‒theft or error. Technical losses can be addressed by investment in newer, high-voltage lines to replace older T&D infrastructure. Non-technical losses can introduce the use of smart meters and greater enforcement of bill payment accountability to reduce loss.

Part of the study considered a cost comparison per ton of carbon dioxide (CO2) abated through different technologies in the U.S. The results showed that smart meters have a median abatement cost of $1,100 per ton of CO2, wind turbines cost $700 per ton, and solar plants cost $1,280 per ton. The study noted that while wind turbines may be more cost-effective in a moderate ambition scenario‒33% cap on loss, smart meters become more cost-effective in the aforementioned high ambition scenario. Smart meters may have more impact in areas with a greater number of non-technical losses with the integration of automated billing.

 

Desert wind farm. Image used courtesy of Pixabay

 

The authors recognize that countries utilize a combination of approaches, including smart meters, wind, and solar, as part of their comprehensive decarbonization strategies. 

The study highlights that even in a future of high renewable generation, smart meters will be beneficial because they can reduce demand and investment needs in generation capacity. The cost estimates for the mass deployment of smart meters still require further investigation.

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