Skip to main content


Understanding Losses

Distribution network losses can be broadly defined as the difference between the electrical energy entering the distribution network and the electrical energy exiting the network.

Distribution network losses are typically broken down into three categories:

  • Technical losses
  • Non-technical losses
  •  Other factors

Technical losses 

The individual physics of our assets, coupled with the square of the energy flowing through the network, dictates the technical losses that will be seen on the network. The total amount of technical loss is made up of a fixed component (a function of the network itself, independent of the load on the network) and a variable component, which is dependent on the level of load on the network. Variable losses may also be impacted by power factor, network imbalance and the effect of harmonics.

Fixed component

The key thing to note about fixed losses is that they occur independently of the operation of the network. That is to say, even if no power was being delivered to customers, as long as the network was electrically energised, there would be fixed losses.

There are several different ways that fixed losses can occur:

  • Hysteresis losses stem from the reversal in magnetic polarity of steel transformer cores in each AC cycle. This results in losses through heat and noise.
  • Eddy current losses stem from the circulation of induced currents in conducting parts that are not copper windings, an example being the steel core of a transformer.
  • Dielectric losses or leakage losses stem from imperfections in electrical insulation that allow small currents to move across them.

Variable Component

The variable component of losses is created by the heating effect of electricity passing through the cables and windings. All conductors, whether they are coils in transformers, aluminium or copper wires in overhead lines or underground cables, even in switchgear, fuses and metering equipment, have an internal electrical resistance which causes them to heat up when carrying electric current. As a result, the variable losses change as power flows increase and decrease (proportionally to the square of the current). Transmission networks experience a lower level of losses because at higher voltages a lower current is required to transmit the same amount of electric power. Conversely, distribution networks at lower voltages are subject to a higher level of losses. Additional factors such as the effect of network imbalance, power factor and power quality can also have an impact on variable losses, as they influence the value of the currents flowing through the conductors.

Non-technical Losses

Non-technical losses are caused by actions that are external to the power system. They refer to lost energy that is not directly related to the transportation of electricity and occurs independently of the physical and technical characteristics of the network (technical losses). Cases of non-technical loss cannot be fixed by upgrading equipment or altering network design. Instead, investigations, audits and collaborations with other bodies are required. This kind of loss involves the abstraction of electricity, resulting in a loss of revenue for both the network operator and the supplier.

There are two main types of non-technical loss:

Theft in Conveyance

There are several ways in which electricity can be taken from the network illegally. Theft and fraud generally account for the majority of the non-technical losses from the network. These are important challenges for the DNO and require a concerted effort from a range of stakeholders to mitigate them. It is difficult to gauge the exact extent of this type of losses as a large proportion of it is likely to go undetected. When illegal connections to the network are made; properties do not have a meter installed or a registered supplier, this is referred to as theft in conveyance.

Unmetered Supply

Not all supplies in distribution networks are metered. There are many items of electrical equipment where it is neither practical nor cost-effective to measure energy consumption using conventional meters. In these circumstances, there are legitimate unmetered supplies whose energy demand is estimated rather than accurately metered. All unmetered connections can be treated as any other type of load, provided that it is registered, properly estimated and accounted for. Moreover, customer-related unmetered connections (e.g. public lighting) or some of the DNO’s own consumption (e.g. auxiliary services of substations) can be adequately contracted from an energy supplier and paid for by regular tariffs as any other normal consumption. Therefore, unmetered consumption, whether related to customers or the DNO, can be excluded from non-technical or technical losses, respectively, provided they are adequately contracted. Only the difference between the real and estimated unmetered consumptions is part of non-technical losses.

In the case of equipment such as street lighting, traffic lights and road signs, it is not practical to meter every unit. Instead, bills are estimated using the power rating of the equipment, the approximated time of use and the number of units. It is not uncommon for these estimates to be inaccurate or an inventory of equipment to be out of date. In order to reduce these losses, DNO’s must work alongside customers with unmetered supplies to improve the accuracy of inventories, to produce more accurate bills.

Other Factors

Other factors that affect network losses are:

  • Phase Imbalance;
  • Harmonics;
  • Power Factor
  • Phase Imbalance

Phase Imbalance

A network that does not have its load evenly distributed across all three phases will have higher currents in at least one phase, meaning it is not optimised for losses. There will also be currents flowing through the neutral conductors if they are present. Due to the quadratic dependence of losses on current, this load imbalance across the three phases will increase losses.

Imbalance is found on all parts of the low-voltage (LV) network due to customers who use one or two phases having different load consumptions. On the high-voltage (HV) network, imbalance is due to the uneven distribution of single-phase transformers or two-wire spurs and different loads on each phase for three-phase customers. The most obvious way to reduce phase imbalance is to carefully balance the aggregated load on each phase, but as customer consumption is not always predictable and varies at different times of day, this can be difficult.

Interventions to alter connections will help balance customers and load across a network based on the maximum demands of those customers. Balancing load profiles over time is very complex, so some imbalance will always occur at certain times of the day. Loads will change in the future, so any action taken to balance the network will have to consider what changes are likely to occur. The rise of Low Carbon Technologies (LCT) is an example of a significant change to the network that could affect phase imbalance.


Harmonic effects are essentially distortions to an AC current profile. They can occur in transformer windings because the AC magnetising current is not perfectly sinusoidal. However, this usually occurs on the triple harmonics (3rd, 6th, 9th, etc.) so on a normal three-phase system, they are all in phase and do not result in any real harmonic voltages. However, if other equipment connected to the network produces harmonics, they will not cancel in the neutral conductor. These can then cause additional I²R losses, as in real terms the losses formula becomes I²R+√H where H=harmonics on the network. This increases the overall load on the network, which in turn increases the losses.

Power Factor

There are two ways to define power in a system. The real power is the capacity of the system to do work. The reactive power is the product of the voltage and the current flowing. The power factor is the ratio of the real power to the reactive power. Where the power factor is less than unity, the current has to increase to deliver the required amount of real power, which results in a loss. This has historically been an issue for installations used by industrial and commercial customers, where most motor loads or power electronic loads were seen. Developments in domestic power electronics and heat pumps mean networks will start to see this issue occurring more on the LV Mains networks.

Since 2010, National Grid Electricity Distribution have been including an excessive reactive power charge for HV and LV half hourly metered, via the Use of System Charges, where customers have a power factor of 0.95 lagging. This is to ensure that the reactive power is kept to the minimum, as with any load, the DNO has to cater for the reactive power for the sizing of the circuit even though that reactive power is not being used effectively.

You may also be interested in ...


Our Environment and Innovation Report is a transparent and public account of our environmental and innovation performance over the last 12 months. 

Find out more


We've co-created a future plan by listening to thousands of your views, ensuring that we deliver a service that meets your needs, now and for future generations.

Find out more

Smarter Networks

We are working with customers and other energy-system partners to achieve our ambitious targets. 

Find out more