Changes to Losses as our network changes
Traditional power stations are large and centralised; therefore it is justifiable to connect them directly to the National Grid transmission system. In contrast to this, renewable energy sources tend to be smaller and more distributed around the country; meaning they are usually connected to local distribution networks. This disrupts the traditional flow of power from generators to transmission networks, to distribution networks, to the customer. If the energy from distributed generation is used locally (and within a suitably short period of time) then this reduces losses.
As National Grid Electricity Distribution (NGED) move towards a Distribution System Operator (DSO) way of working there will be a need to manage energy flows across the network to increase utilisation and balance demand and generation. This has the potential to increase losses if power flows increase or demand and generation cannot be balanced. Alternatively it could reduce losses if the network was perfectly balanced. This balance must be achieved against an economic and efficient measure so the cost of losses should be considered. Work completed for the ENA Technical Losses Working Group by WSP has shown that losses could increase as a result of DSO flexibility, but not to the levels which may occur if the alternative conventional reinforcements were delivered.
It has only been in the RIIO-ED1 period that DNO’s have started to publicly document a Losses Strategy. There are several key drivers to losses becoming more important: -
Renewable Energy: Solar farms and wind generation, unlike fossil fuels, which are burned in large power stations, most renewable energy sources are smaller and distributed around the country. They are connected to the local network, rather than the central grid. Having power enter the network at lower voltages substantially changes the way power flows across the network. In many cases, this leads to an increase in losses.
Uptake of Low Carbon Technologies: The ENA Losses Working Group, which NGED is a member, have commissioned a survey majority of forecasts predict that over the next ten years, the use of electric vehicles and heat pumps will increase exponentially. This will substantially increase demand on the electricity network. When demand increases, currents will increase, this will lead to losses increasing.
Smart Solutions: Demand Side Response, Energy storage and Network automation will lead to higher utilization of the network which in turn will lead to higher losses.
New Roles and Responsibilities: Peer to Peer trading and Distribution System Operator again will lead higher utilization of the network which in turn will lead to higher losses. 
With the level of losses increasing, the cost to the customer becomes greater, so there is greater motivation to reduce them.