Estimation and role of distribution system losses in open markets

Losses in lines and components represent a considerable cost component for electricity distribution companies. A model, named as the loss coefficient mode, for estimating hourly and annual losses and their value has been developed. That requires only a minimal amount of data from the company. The losses of six different urban and rural Finnish electricity distribution companies have been estimated with the model. Comparisons with detailed internal calculations and annual measurements show an acceptable level of accuracy. The model is useful for regulators and consultants. It may also be applied for buying losses from the markets.