ntls and the supply challenge proving the yelland thesis william c. erasmus cem (fsaiee)
TRANSCRIPT
NTLs and the Supply ChallengeProving the Yelland Thesis
William C. Erasmus CEM (FSAIEE)
Introduction
• In South Africa we have adequate energy (kWhs) but we do not have the power capacity (MW or GW) to meet the demand for energy
• This status unequivocally creates an opportunity to unlock power capacity by reducing energy demand through DR and reducing NTLs thereby deferring new investment into generation, transmission and distribution
What are Non-Technical Losses – NTL’s ?
Commercial AdministrativeReceivables
• Fraud may be:– Energy theft (illegal connections to the network)
– Meter fraud or by-passes
• Meter errors
• Fraud may be implemented by the customer or by professionals
NTL’s :
Commercial
• High cost of managing aging accounts– Default Customers – Delayed Payments and
no payment• Defaulter consumer (*) some will delay, some will not
pay
• Volume and aging of receivable accounts has HIGH CO$T IMPACT consumer used energy but did not pay on time, which increase company’s financial expenses
* Usually not accounted as NTL.
AdministrativeReceivables
NTL’s :Commercial
• Internal process flaws and database inconsistencies (Average 20% of all problems identified by C&I Audits in SA)– Human and system errors (*)
– Incorrect tariff (*)
– Internal fraud (*)* Usually not accounted.
AdministrativeReceivables
Non-Technical Loss
NTLs and the Supply Challenge
NTLdetection
Revenue Increase
Energy Consumption Reduction
Time
Energy
Energy paid
Energy consumption
32%*
68%*
* Figures from recent studies in Brazil
Cost-free DSM
Advantages of NTL Reduction
• NTLs decrease double benefit– Significant energy consumption reduction - unlocked significant additional power capacity
– Revenue increase• Energy consumption reduction
– Diminishes total supply – Reduces the demand-peak
• Therefore, reducing NTLs has a huge benefit in demand management without additional investments– Cost-free DSM benefits
Brazilian Case StudiesNortheast BrasilNortheast Brasil
Southeast BrasilSoutheast Brasil
BrazilBrazil
SAELPASAELPA Area: 54.595 Km2
Consumers : 837 thousand NTLs : 9%
Area: 1.789 Km2
Consumers : 131 thousand NTLs: 4%
Area: 17.419 Km2
Consumers : 436 thousandNTLs: 4%
Area: 17.331 Km2
Consumers : 378 thousand NTLs: 2% Date: April / 04
Energisa (SAELPA)• Energisa implemented solutions to reduce NTLs
from Feb-03 to Nov-04 at their following distribution companies: ENERGIPE – Feb/04 SAELPA/CELB – May/04
CFLCL/ CENF – Nov/04
• RESULTS AFTER 1-Year– SAELPA has 850 thousand customers in one of
poorest states of Brazil– Productivity increase = 90.25%– Energy consumption reduction = 40 GWh– Additional net revenue in 1 year = US$ 2,9 million
• CEMAR implemented a solution in 2006 and results for 2007 are:– Cemar has 1,35 million customers– Productivity increase = 118.89%– Energy consumption reduction = 227 GWh– Additional net revenue in 1 year = US$ 16,9 million
Cemar
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_________________________________________________
[ i
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Measurement of Productivity
Non-Technical Loss
NTLDetection
Revenue Increase
Energy Consumption Reduction
Time
Energy
Energy Paid
Energy Consumption
Opportunity Cost/Benefit Differentiator
• Cost to implement a solution to identify sources of NTLs for, say, Jhb Metro (1.4 million consumers) = 20 million USD and deliver result in 1-year with a ROI in excess of 400%
• New thermal plant of equivalent unlocked capacity would cost in the region of between 10 to 20 billion USD and take nearly 9-years to complete
• The opportunity for the economy is a no-brainer
The Important ?• Business/Economy needs to ask
Government/Eskom why the economy is been held to ransom a situation which is critically effecting employment, job creation and the countries ability to remain globally competitive
Thank You
Optimization Problem• There are several activities to reduce NTLs such as
inspections, anti-theft cable-box-seal, AMR, “SMART” meters etc.
• Activities can’t be applied to all customers because of economic restrictions hence, distribution companies only have budget for a portion of consumer base
• The consequential questions are:– What is the most-effective (ROI) activity for each
customer ?– Who are the top customers to apply each activity ?
• As a result we are confronted with an optimization problem