Reducing Technical and Non-Technical Losses in the Power Sector(Review)

Background paper for the world bank group energy sector strategy

Presented by

Mbah, Uchenna Gregory

INTRODUCTION

Total losses are simply amount of electricity injected into the transmission and distribution grid that are not paid for by users. The two components of losses are Technical and non-technical losses.

TECHNICAL AND NON-TECHNICAL LOSSES

• Technical losses are due to system design and nature

• Non-technical losses are due to theft and management operation of utility

EFFECTS OF NON-TECHNICAL LOSSES

• Increase in tariffs paid by customers

• Worsen progressively quality of service

• Reduce access to electricity supply

• Reduce the income source of the power sector

• Jeopardizes the financial sustainability of power sector.

The effect was the situation in Latin America, Asia, former Soviet Union and Sub-Sahara Africa were total losses are above 50%.

HOW IT WAS HANDLED

The situation was address through:

• Legislation

• Managerial strategy

• Technical action and

• Training

SUCCESS STORIES

LEGISLATIVE ACTION

• They acknowledged that there is energy theft

• They started reform policy in power sector that brought about check and balance

• They enacted a new law to address electricity theft

• They build new law court and police station for electricity theft cases

MANAGERIAL STRATEGY

• Business process reengineering - supported by management information system(MIS)

• Process reengineering - in addressing customer complains

• Communication -media adverts, posters, videos, public outreach program.

• In the regulation they lobbied political authorities and regulators to achieve a tariff structure that would allow financial sustainability

• They insured proper metering management

TECHNICAL ACTION

• Construction of distribution network that is tampering proof

• Capital investment to regularize supply, by renovating distribution network and replacement of obsolete equipment

• Replacement of damaged or tampered meters

• Field assessment of physical condition of supply

• Proactive action on faults in the network

TRAINING

• They insisted on ethical behavior of contracted workers.

• They provided working tools and training

• Contracting work to competent contractor

LET ME END HERE

The secret of the success stories lies in the right institutional and regulatory framework with political leadership. Électricité de France (EDF) failed to reduce losses in the first tariff period as it kept the same management as when the company was a Sate Own Enterprise(SOE).

Reduction of losses is an attitude. It begins with integrity, innovation, right value and passion.

THANK YOU