As electricity flows through the transmission and distribution networks, energy is lost due to electrical resistance and the heating of conductors. The losses are equivalent to approximately 10 percent of the total electricity transported between power stations and market customers.
Energy losses on the network must be factored in at all stages of electricity production and transport to ensure the deliver of adequate supply to meet prevailing demand and maintain the power system in balance. In practical terms, this means that more electricity must be generated than indicated in simple demand forecasts to allow for this loss during transportation.
The impact of network losses on spot prices is mathematically represented as transmissions and distribution loss factors. Loss factors are calculated and fixed annually to facilitate efficient scheduling and settlement processes in the NEM.
Methodology and Guides
Transmission Loss Factors
Distribution Loss Factors
Archived loss factor documents may be obtained upon request from the AEMO Information & Support Hub.
Provision of Indicative Marginal Loss Factors
Interested parties may on occasion require marginal loss factors (MLFs) under conditions that differ from the Forward Looking Loss Factor (FLLF) methodology. Some examples may be as follows:
- A proponent may wish assess the potential impact on published MLFs if a generating unit is installed or upgraded at a particular connection point.
- A market customer may wish to assess the impact on the published MLF at a connection point without the contribution of a nearby generating unit.
- A market participant may wish to assess the MLF of an embedded generator for which AEMO does not normally calculate and publish an MLF.
In order to assist interested parties with such requests, AEMO currently provides a service to calculate indicative MLFs under non-standard assumptions for a nominal fee.
The following document provides details of the indicative MLF calculation process, including fees and data requirements.
For further information on this document, please contact Ramitha Wettimuny.