The National Electricity Rules (NER) requires that distribution loss factors (DLFs) be determined by a Distribution Network Service Provider (DNSP) for all connection points on its distribution network either individually or collectively.

According to the NER, DLFs notionally describe the average energy losses for electricity transmitted on a distribution network between a distribution network connection point and a transmission network connection point or virtual transmission node for the applicable financial year.

DLFs are to be used in the settlement process as a notional adjustment to the electrical energy - expressed in MWh - flowing at a distribution network connection point in a trading interval to determine the adjusted gross energy amount for that connection point in that trading interval.

For more information, please refer to clauses 3.6.3 and 3.15.4 on the National Electricity Rules website.

In broad terms, the Rules require that site-specific DLFs are calculated for:

- Embedded generators with greater than 10 MW of generation.
- All customers of greater than 10 MW demand or 40 GW.h annual consumption i.e. Individually Calculated Customers (ICCs).
- Generators of less than 10 MW or 40 GWh per annum capacity where the Generator meets reasonable costs for Energex to perform the necessary calculations.

DLFs for all other customers may be calculated on an average basis, which means determining DLFs for each voltage level of the network.

The methodology used by Energex involves a full recalculation of all DLFs (both average and site specific) every three years.

In the intervening years, site specific DLFs are calculated, but all average DLFs are simply reviewed, based on allocation of the same proportion of network losses determined at the last full recalculation.

The annual DLF review also requires that a reconciliation of the previous year's calculated DLFs be completed.

The DLFs of the previous financial year are used to calculate losses on the distribution network for that year. These are then compared to historical metered data and reasons for discrepancies are explained or reconciled.

The methodology for determining DLFs for Site Specific Customers is identical whether it be a full re-calculation (every third year), or only a review.

Site specific DLFs are calculated using load flow analysis based on the customers forecast demand data and network load data for the year in which the DLFs are to be applied.

The analysis involves load flow studies on the directly connected network between the customer connection point and the transmission network connection point.

The directly connected network is defined as all parts of the network which experience a change in power flow due to a change in customer loads.

In addition, iron losses of the transformers included in the directly connected network are calculated and apportioned based on the ratio of customer load and network load flowing through the transformer.

Energex uses the Marginal Loss Factor methodology to calculate site specific DLFs. This process involves determining the customer's losses by assessing the relativity between the change in system load associated with a change in the customer's load.

Average DLFs are calculated for each significant supply level in the network, whereas

DLFs for major customers are calculated individually to determine the losses directly attributable to their loads.

The average DLF categories applied by Energex are:

- 132/110 kV Network
- 33 kV Network
- 11 kV bus
- 11 kV line
- LV bus
- LV line

The method used to calculate average DLFs is to carry out load flow studies to determine the losses at the coincident network peak, followed by the application of calculated Loss Load Factors (LLFs) to obtain the actual losses.

The transmission and sub-transmission systems are modeled using appropriate load flow packages. Losses on the 11 kV distribution network are calculated using forecast feeder peak demand data and feeder length data which is obtained from Energex's corporate database.

Losses at the LV bus are calculated based on the average impedance of distribution transformers, and losses in the LV network are calculated as the difference between the total losses (calculated by the difference between total purchases and total sales), and the losses resulting from the higher voltage network studies.

The DLFs for the network are calculated based on the formula:

Loss Load Factors (LLFs) are calculated based on load duration curves, which are computed from half-hour average demands over a full year. The load duration curve is squared and averaged to obtain the LLF. The LLFs are applied to the losses calculated at peak demands to determine the actual losses.

Load flow studies are carried out down to the 33kV or 11kV busbar at all bulk supply points and direct transformation substations. The 132/33kV, 110/33kV, 132/11kV and 110/11kV transformer losses are subtracted from the transmission system losses.

Losses calculated by these studies are converted to annual energy losses using the LLF for the system under consideration. The sum of the annual energy losses for all transmission network connection points excluding ICC losses are divided by the sum of all non-ICC energy sales through the 132kV & 110kV networks to obtain the DLF, viz:

The bulk supply systems are modeled from the 33kV busbar to the 11kV busbar including 33/11kV transformers. The peak losses in kW calculated from load flow studies are converted to annual energy losses using the LLF.

Losses attributed to the 132/33kV, 110/33kV, 132/11kV and 110/11kV transformers are added to the losses obtained from these load flows. The total energy supplied is taken from billed sales figures and the DLF derived by dividing the total losses excluding ICC losses by the total energy sales to non-ICC customers, viz:

The bulk supply and 11kV bus DLFs are separated from the total DLF using ratios. The ratios used by Energex from 1 July 2013 are 0.617353208 for the Bulk Supply System DLF and 0.382646792 for the 11kV Bus DLF.

The ratios are based on the 2013/14 full DLF review. These ratios are validated during each full review, and if found to be no longer appropriate, are recalculated, subject to the latest network configurations and consumption patterns. These ratios will apply to years 2013/14, 2014/15 and 2015/16.

Losses on 11 kV feeders are calculated using the length of each feeder and forecast peak demand data. The formula for determining 11kV losses is as follows:

The feeder lengths are obtained from Energex's corporate database, and allow calculation of the resistance of each feeder based on average overhead and underground resistances per unit length.

The peak demand is also obtained from a corporate database, and a load growth is applied to determine peaks during the forecast year.

Average branching factors are calculated for urban, rural and high-density feeders based on losses obtained for each 11kV feeder during each full review. This data allows losses to be calculated for each 11kV feeder.

An annual loss energy is then produced for each feeder using LLFs, which are then summed to produce the total 11kV feeder losses. The DLF is thus:

LV losses are generally determined as being the remaining losses when all calculated losses for the higher voltage networks have been deducted from the total network losses (known from purchases - sales).

LV losses need to be appropriately allocated between the LV Bus and LV Line categories. The calculated ratios used by Energex from 1 July 2013 are LV Bus = 0.514371103 and LV line = 0.485628897 of total LV losses.

These ratios are based on the 2013/14 full DLF review. These ratios are validated during each full review, and if found to be no longer appropriate, are recalculated, subject to the latest network configurations and consumption patterns. These ratios will apply to years 2013/14, 2014/15 and 2015/16.

Once the DLFs are calculated and reconciled, a report is prepared detailing the calculated site specific DLFs together with the average DLFs at each voltage level in the system.

The report is submitted for approval to the Australian Energy Regulator (AER). Once approved, the DLFs are forwarded to the Australian Energy Market Operator to be published on its website by 1 April each year.

To apply for a review for LV bus DLF, please complete the QESI Queensland Electricity Supply Industry - Application for Review (PDF 264.5 kb).

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