Electricity Loss and Theft: Who Pays?

We fret about turning off the lights to save pennies on energy. Meanwhile, electricity worth billions of dollars gets lost or stolen on the world’s power grids every year.

In industry jargon, the problem is known as ‘line loss.’ A certain amount of electricity generated by a power plant never makes it to the consumer — or at least the paying consumer. Instead it is lost or diverted somewhere over the wires. Some of it dissipates in transit for technical reasons. In other cases, it’s pilfered by marijuana growers, households, or in some countries even manufacturers.

Awesense, a Canadian company that has built its business model around solving this problem, pegs the cost of worldwide electricity loss at $202 billion annually.

Losses vary dramatically by country, with percentages running in the double digits in Brazil, China and India. In the U.S., about seven percent of the power generated goes missing. How much of that is theft? No hard figures exist, but a rule of thumb for sophisticated grids puts U.S. power theft at two to three percent. That may not sound like a lot, but the US is one of the world’s biggest power producers. So even a small percentage of electricity lost means a large amount of fossil fuel wasted.

So, in a time when we strive for greater energy efficiency, why don’t we hear more about this problem?

It’s a matter of accountability and who pays, according to Mischa Steiner-Jovic, CEO of Awesense. Regulators typically do not require utilities to absorb the costs. Instead, electricity ratepayers subsidize the thievery.

“The utility commission has not sufficiently motivated the utility to reduce its losses. Because the utilities are able to pass their losses on to the rest of the customers, they are not financially motivated to solve power theft,” said Steiner-Jovic in a recent interview.

That’s not to say, nothing is being done. Some progressive utilities in North America are taking initiative, in part for safety reasons. Utility workers can inadvertently come in contact with wires exposed by setups jury-rigged to divert power.

But North America is still far behind Brazil, where the federal government has put in place a policy to reduce electricity losses. “Energy is such an important factor for the growth of their economy. They can’t afford to lose 20-30 percent of their energy,” said Steiner-Jovic. Brazil’s electricity theft problem has helped spur the installation of smart meters, which can go long way in helping utilities identify loss.

Not all utilities can afford smart meters. And anyway, thieves sometimes maneuver around them. Awesense has developed a system to identify electricity loss for utilities with or without smart meters. The company acts as a kind of energy auditor for the grid, using a combination of software and monitoring equipment to identify where loss is occurring and why — whether the problem is malfunctioning equipment or theft. It then helps the utility put in place a strategy to resolve the problem. Like many energy service companies, Awesense operates under a ‘no upfront cost’ model — it is paid out of the energy savings achieved by the utility.

So far, developing countries have shown the greatest concern about line loss. But Steiner-Jovic predicts that North America, too, will take more notice as the consumer becomes increasingly energy aware.

“It just can’t go on that we turn a blind eye to inefficiency on the grid,” he said. “Energy is too valuable a commodity.”

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. See her articles here.

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How does a startup utilities help spot energy theft

The company founded in 2009 and is located in Vancouver, Canada, a U.S. utility, the to the agreed Awesense the new distribution model, Mischa Steiner Jadhav, CEO of Awesense, said recently signed. Instead of selling the equipment and software outright, Awesense can make the installation of systems and data to finance crunch and money by using a percentage of revenue, the by stop the theft of the energy or the charging of a fee is always. Steiner Jadhav declined to name of the utility disclose, has opted for the service contract.

Power company in Malaysia, Turkey, Bulgaria and the Czech Republic plan to carry out by trying with Awesense' technology from this quarter, he added. Fortis BC British Columbia among its customers.

About $220 billion worth of electricity is lost every year due to theft or technical problems with the grid, according to a report of the World Bank in 2009. But, the most losses are due to technical problems, not. Energy theft is a major problem in India: about 27 percent is illegal, according to his Government diverted. Theft is $6 billion per year in the United States, according to this report.

"Makes the most thefts bypass the meter, so that it is difficult for utilities to determine where they occur," Steiner Jovic said.

Home technology consists of portable sensors, the up to 10-inches tall, 1 inch wide and 10 cm deep and weighs less than one kilogram. You can utility workers on wires, clip, where the sensors the current measurement and calculate the energy (in kWh), which flows through the pipe. Through the wireless network of the startup, the data goes back to Awesense of the Center for analysis and utility available to its customers.

The company has designed its technology for the distribution network, because that is where most makes theft takes place. The distribution network is also less efficient than the transmission because it lowers electricity in need of high-voltage lines, sends the voltages on the way and the electricity to homes and businesses.

The height of the sensors and how tightly they are depend on what would achieve a utility. It wants simply to monitor the flow of energy on a line, say, 100, cable households, could install it on this line a sensor. When determining exactly where more accurately energy losses will occur, would it move sensors or add more of them to home in on the cause, which could be stolen or technical problems.

A utility provides the data flows through good data on how much energy and is used in a particular area, said Steiner Jovic. Otherwise find out total damage is based primarily on the numbers that show how much power it generated or bought and how much they sold.

Since the Awesense flow of energy and the demand takes equipment warehouse, it could also help utilities to find out, where you must add new distribution lines or install power generation equipment such as solar panels, is to feed the demand.

By selling their services rather than its equipment and software, Awesense can serve utilities that don't want to invest the capital or manage the sensor and data collection employees. Also reduces risk for utilities that are known to take a while to apply new technologies until the and would probably prefer a service to buy, rather than invest in plants from a startup, not long enough to provide maintenance and warranties meet, can hold.

Awesense increases the first equity round last year, but Steiner Jovic declined to say how much.

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