Potential benefits of distributed generation in the reduction of non-technical losses

     Power generation at or near the consumers characterizes the Distributed Generation (DG). The use of renewable resources to provide energy close to the end users has changed the perspectives for the future power... [ view full abstract ]

     Power generation at or near the consumers characterizes the Distributed Generation (DG). The use of renewable resources to provide energy close to the end users has changed the perspectives for the future power system. The traditional model of central generation, away from most of the consumers, is not seen as the only solution for energy generation in big scale anymore. This fact can affect citizens positively and create improvements for society, especially for those who belong to social classes with low earnings. The present study contributes to the evaluation of the potential economic and technical benefits that distributed generation can create to low-income households. Taking into account the financial impact of electricity non-technical losses in Brazil, it proposes a pioneer analysis of potential economic and technical benefits that the insertion of DG in low-income communities can create, including the reduction of commercial losses, and alternatives to allow viable financing. The methods and solutions developed to reduce non-technical losses usually pursue ways to avoid that users consume energy without regularly paying for it. However, the traditional approach has not produced effective results in some regions of Brazil. Areas with a complex socioeconomic situation (areas controlled by criminal groups, high levels of poverty, etc.) have not faced a sustainable reduction of non-technical losses. This research looks for the issue from a different point of view: What if consumers start generating their own energy instead of stealing it? Instead of searching ways to block energy that flows illegally from the distribution grid, government and distributors could point their efforts to transform the illicit consumers into regular prosumers (which means that the consumers of energy start to act also as producers), reducing non-technical losses, improving the quality of service and contributing to improve socioeconomic situation of low-income communities. The study shows the results of different scenarios in which the use of photovoltaic systems could reduce non-technical losses and its impact on distribution utilities and consumers in Brazil. Assessments of the benefits that DG can create for low-income consumers are scarce and this work indicates that the development of DG in low-income communities of Brazil could generate relevant economic and technical benefits. It could also work as an alternative method to reduce non-technical losses. The massive insertion of DG in households with lower earnings depends on affordable loans, which depend on integrated actions uniting Government, Distribution Utilities (DU) and Society.

Keywords: distributed generation, non-technical losses, technical benefit, economic benefit, low-income citizens.