Appendix G: Transmission Losses and Costs
Table G1 below may assist in giving some estimate of the cost associated with transmission losses. This table should be used with care as:
- It is very indicative, suggesting an order of magnitude, rather than a precise figure.
- These losses, and the cost of these losses, must be considered against the losses and their costs that will occur when generation is located close to demand.
- No comment on the extent to which the marginal loses will apply, nor the periods of time they will apply to, is provided. Maximum marginal losses will likely only occur for very short periods of time, and these may coincide with maximum south-north power transfer when prices are not likely to be at their highest.
- Losses will be affected (generally adversely) by increases in load carried by the transmission system.
- Losses will be significantly reduced as various sections of the transmission system are physically upgraded with larger conductors or higher operating voltage levels (or both).
Table G1: Transmission Losses
| Electricity price at grid injection point (GIP) in Southland 5.7c/kWh |
| Average Loss | 5.5% | 6.5% | | | | |
| Marginal Losses | | | | | | |
| South Island | | | 5% | 5% | 5% | 10% |
| HVDC | | | 5% | 5% | 10% | 15% |
| North Island | | | 5% | 10% | 20% | 30% |
| Reduction in energy delivered (losses) | 5.5% | 6.5% | 15% | 20% | 35% | 55% |
| Cost of losses at Auckland GXP price (c/kWh) | 0.31 | 0.37 | 0.86 | 1.14 | 2.00 | 3.14 |
Note: the losses in the above table are developed from the following information in Transpower's submissions to the 2000 Electricity Inquiry (footnote 33, Volume II: Wholesale Market):
Average transmission losses over the North and South Island networks, including the HVDC link, tend to vary between 5.5 and 6.5 %, the magnitude of the marginal losses can at times be high, reaching 5-10% over the South Island, 10-15% over the HVDC and 20-30% over the North Island.
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