The existing electrical grid is designed to meet maximum load conditions, and have the capacity to endure a fault even at that point without resulting in a huge failure. In colder climates, the annual peak load occurs in winter, and in warmer climates, the peak occurs in summer. The dividing line is distinct. Manitoba is a winter peaking system, while their neighbours immediately to the south peak in summer. Ontario has a summer peak. The bad news is that because the grid is designed to meet that peak demand that occurs for about an hour on one very hot or very cold day, the system operates at an average of about 50-60% on an annual basis – and perhaps even less when fault tolerance is included. I can think of few industrial managers that would be happy to announce that their plant operated for a year at such a low capacity factor.

Load factor is a term used in power systems to describe the average energy used as a portion of the peak load. Hence, a building with an average load of 50 kW and a peak of 100 kW would have a load factor of 50%. The system load factor for a power system is typically about 60% over the period of a year.

Line loss is an issue that is getting more and more interest these days. The line loss is basically the energy that is turned into heat, as the electricity travels through the wires and cables that carry it from the generator to the load. Line loss is calculated as "I" Squared x "R" where I is the current carried in the wire and R is the resistance. Line loss increases as the square of the current - so if the power carried on a power system is doubled, the loss increases by a factor of 4...

One can carry energy from a generator to a load in a number of ways. It can be done at a constant rate, over an extended period, or it can be a lot of power carried over a short time, followed by an extended period with little or no load. We will examine the losses that occur.

We will consider two options – a constant load over a 24 hour period, or a 12 hour period of no load and a 12 hour period of double load. The first approach has a 100% load factor, while the second has a 50% load factor. The same amount of energy is delivered in both cases…

Case 1: If the resistance had a value of 1 ohm, and the current for the 24 hour period was 1 amp, the loss would be

Loss = 24 x 1 x 1 x 1 = 24 watt hours…

Case 2: Now if the power is consumed at double the rate for half the time, the loss is calculated as follows:

Loss = 12 x 2 x 2 x 1 = 48 watt hours

The loss that occurs if the power is delivered in 12 hours, is double the loss that would have occurred if the power had been delivered at a constant rate over the 24 hour period. Operating at a load factor of 100% is twice as efficient as operating with a load factor of 50%.
This fact has real implications in the real world. The power system has a load factor of about 60%, and typical losses are about 10% of the total energy delivered. Clearly if the load factor can be improved, the line loss will decrease.

There are two methods that can be used to improve line losses. Both have different results:

1. Move loads that occur during peak load periods to off peak times. This process, called load shifting is encouraged by the application of “Time of Use” (TOU) rates. These rates charge a high price for energy delivered during peak hour times and a low price for energy delivered in off peak periods. The Ontario Smart Meter initiative is an excellent example of this type of pricing.

2. Install hybrid heating – using off peak energy to displace fossil fuel loads such as water or space heating.
Both methods achieve the same result, increasing the load factor. Method 1 reduces both the total and the % line loss. Method 2 reduces the % line losses – because in that case, the grid delivers more energy.

Smart grid applications are about to start to appear in many applications. The grid will never be smart – it is the devices connected to it that will be clever. In this case, the application of special rates or the installation of a hybrid heating system can be used to drive the load factor and efficiency of the network up. The implementation of smart meters begin to give the price signals that make people use electricity when it is plentiful, and to avoid use when it is scarce. In addition to the savings that this creates on the supply side, it also reduces losses in the delivery side.

Any activity that drives an increase in efficiency - or reductions in costs these days is a good thing. The potential is significant.