1

Influence of Cable Losses on the Economic Analysis

of Efficient and Sustainable Electrical Equipment
J.A. Lobão a, T. Devezas b, J.P.S. Catalão b,c,d,*
a
Polytechnic Institute of Guarda, Av. Dr. Francisco Sá Carneiro 50, 6300-559 Guarda, Portugal
b
University of Beira Interior, R. Fonte do Lameiro, 6201-001 Covilha, Portugal
c
INESC-ID, R. Alves Redol, 9, 1000-029 Lisbon, Portugal
d
IST, University of Lisbon, Av. Rovisco Pais, 1, 1049-001 Lisbon, Portugal

Received 11 May 2013; received in revised form 7 November 2013

Abstract
Increasing energy needs are accompanied by environmental responsibilities, since nowadays electricity companies
operate in a competitive and sustainable energy framework. In this context, any proposal for action on energy
efficiency becomes important for consumers to minimize operational costs. In electrical installations, electricity
consumption can be decreased by reducing losses in the cables, associated with the overall efficiency of the
equipment, allowing a better use of the installed power. The losses must be analysed in conjunction with all loads that
contribute to the currents in the sections of an electrical installation. When replacing equipment in output distribution
boxes with more efficient ones, the current in those sections is reduced in association with the decrease in power
losses. This decrease, often forgotten, is taken into account in this work for the economic analysis of efficiency and
sustainable electrical equipment. This paper presents a new software application that compares and chooses the best
investment in the acquisition of electrical equipment. Simulation results obtained with the new software application
are provided and are then validated with experimental results from a real electrical installation.
© 2013 Elsevier Ltd. All rights reserved.

Keywords: Energy efficiency, decision support, electricity consumption, cable losses

1. Introduction

In power production, transport, and distribution for final consumption, various aspects have been

particularly highlighted: environmental and economically efficient dispatch [1,2], distributed generation

and impacts on the operational characteristics of networks [3], customer satisfaction and profit making of

the producer and distributor of energy [4], dimensioning of the section of cables to reduce energy

consumption and optimize operating distribution systems [5–7], reduction of distribution losses by

reducing reactive power optimization with capacitors placed in the distribution lines [8–10], layout

optimization for radial distribution [11], and the use of superconducting power transmission [12,13].

Also noteworthy are the study and development of efficient and sustainable electrical equipment, in

particular industrial induction motors [14–16], which are responsible for a large share of electricity

consumption, as well as efficient lamps [17,18] for industrial and domestic use.

* Corresponding author at: University of Beira Interior, R. Fonte do Lameiro,

6201-001 Covilha, Portugal. Tel.: +351 275 329914; fax: +351 275 329972.
E-mail address: [email protected] (J.P.S. Catalão).
 2

At a time when global energy consumption is predicted to increase by 38.6% by the year 2030 [19], in

association with growing environmental pressure around the industry, there is a need for the most

efficient use of energy.

Moreover, in the near future the consumer is expected to stop being passive and to become an active

element throughout the chain of production and consumption of energy. This requires that the consumer

have action tools available that will help him or her make decisions taking into account the characteristics

of the data and the installation.

In order to reduce the energy consumption in a domestic or industrial installation, the efficiency of real

loads and all losses in the cables of the installation should be thoroughly studied to improve the energy

efficiency. Indeed, energy efficiency and reduction of consumption in electrical installations and

equipment represent an important line of research.

Hence, this paper provides consumers with a new software application that allows them to compare

options and choose the best investment in the acquisition and installation of electrical equipment, aiming

for both efficiency and sustainability. Two research aspects are connected in an original way: the

influence of equipment and the losses caused by it in the installation, on the one hand, and the associated

economic analysis, on the other hand.

The equipment choice focuses on multiple factors: cost/price, energy consumption, reduction of losses

in the cables, useful life, and interest rate. The consumer can then make a decision in the light of all the

parameters of the equipment and its electrical installation. The power losses in the conductors must be

considered together with all loads that contribute to the current in the sections of an installation, which

makes a real difference in the choice of efficient and sustainable equipment.

This study is based on a new way of thinking: from minimal investment cost to minimal lifecycle cost.

The connection between optimal cables selection and the influence of efficient/sustainable equipment is

also experimentally validated, in addition to the simulation results obtained using the new software

application.

This paper is structured as follows. Section 2 presents the problem formulation. Section 3 explains the

economic evaluation. Section 4 illustrates the software application. Section 5 provides the simulation

results, validated with experimental results. Finally, concluding remarks are given in Section 6.
 3

Nomenclature


JS Current density vector d Monthly operating days


J ei Eddy current density vectors m Months of annual operation

V Volume  Price of electricity

T Period of the current ΔP Difference in cable losses

Pskin Losses due to skin effect P Power

Pprox Losses due to proximity effect P[k , i ] Difference in cable losses of the

conductor of the output i of the

distribution boxes K

 Skin depth R[k , i ] Resistance of the conductor of

the output i of the distribution

boxes K

R Conductor radius I[k , i ] Current of the conductor of the

output i of the distribution

boxes K

D Conductor diameter Ni Initial investment

Rac AC resistance for the conductor Oi Mean annual savings

Rdc DC resistance of the conductor SPBT Simple Payback Time

I rms Current (true rms) VAL Net Present Value

Q Distribution boxes IRR Internal Rate of Return

 Electric conductivity I Current

RR Profit DD Operation cost

II New investment a Annual interest rate

 4

2. Problem formulation

The losses in electrical installations are a known problem that cannot be eliminated, but it may and

should be reduced. The objective of this study is to present a new software application that allows

analysing the influence of cable losses on the economic analysis of efficient and sustainable electrical

equipment, validating simulation results with experimental data.

The methodology used to develop this work shows how to calculate the losses in electrical conductors,

identifying first the parameters of an electrical installation with the respective loads. The calculation

methods used in the software application and the respective outputs are provided. An analysis is presented

based on real laboratory measurements, with a wattmeter at the beginning and at end of the conductors to

obtain the respective losses. Finally, the simulation results are compared with experimental results to

validate the software application.

An electrical installation, whether large or small, produces heat in the conductors when in operation,

which is associated with power losses. Industrial and domestic electrical systems operate mostly on

alternating current, for which the influence of the skin effect and proximity of conductors should be

considered, due to the creation of eddy currents and magnetic fields caused by the neighbouring

conductors. The skin effect is the tendency of an AC current to become distributed within a conductor

such that the current density is largest near the surface of the conductor and smaller at greater depths in

the conductor. The electric current flows mainly at the "skin" of the conductor between the outer surface

and a level called the skin depth. The skin effect causes the effective resistance of the conductor to

increase at higher frequencies where the skin depth is smaller. Skin depth is due to the circulating eddy

currents arising from a changing H field, cancelling the current flow in the centre of the conductor and

reinforcing it in the skin.

If currents are flowing through one or more nearby conductors, the distribution of current within the

first conductor will be constrained to smaller regions, so the resulting current crowding is termed the

proximity effect. The proximity effect can significantly increase the AC resistance of adjacent conductors

when compared to its resistance to a DC current. The losses in the conductors of an installation should

thus consider the skin effect and the proximity to other conductors. Due to the nonlinearity of

configurations and diversity of types of cables, the problem may become very complex in terms of

analysis. Multiple studies have been done using programs for finite element analysis, simplification, and

verification of semi-empirical formulas that allow valid results and facilitate an analytical and

computational analysis.
 5

In an installation as referred to in [20], it is assumed that the multiple phase conductors can be treated

as infinitely long parallel wires, so the resulting magnetic field wraps around the conductors in the plane

perpendicular to the conductor axis and the resulting eddy currents flow parallel or anti-parallel to the net
 
phase current. The source current density vector J S and the induced eddy current density vectors J ei

from various phase conductors can be added in each infinitesimal area of the conductor cross-section of

interest, after which Eq. (1) can be applied over the cross-sectional area of the conductor to determine the

total loss per unit length:

1 T 1  N  2
J   dV dt (1)
Ptotal 
T 0 2  
Volume 
S  J
i 1 ei 


where V is the volume variable, t is the time variable,  is the electric conductivity of the conductor,

and T is the period of the current wave.

The total losses are the sum of two components, the skin effect and the proximity effect, as given by:

Ptotal  Pskin  Pprox (2)

The total losses can be analysed separately, making the overlap at the end.

The loss associated with the proximity effect results from the interaction of conductors that occurs

when they are transversed by an electric current, which creates magnetic fields, changing the total

distribution of current in the straight section in all conductors. This interaction is a function of the

distance between conductors, the amplitude of the current, the phase angle, and the frequency and

distribution of induced current.

For instance, in two adjacent conductors carrying AC current flowing in opposite directions, such as

the ones found in power cables and bus bars pairs, the current in each conductor is concentrated into a

strip on the side facing the other conductor. Since the current is concentrated into a smaller area of the

wire, the resistance is increased. The additional resistance increases power losses, which can generate

undesirable heating.

To determine the proximity effect losses of multi-conductor three-phase cables, several solutions have

been presented as suggested in [20], proposing that when the conductor radius is larger than the skin

depth, the power dissipation from the proximity effect is proportional to the conductor radius (Eq. (3)). As

the conductor radius becomes less than the skin depth, the loss can be expressed by Eq. (4).

2
  I 
Pprox  cR  d   0 r  , R   (3)
 2r 
 6

2
  I 
Pprox  aR b  0 r  , R   (4)
 2r 

where a = 2.605E6, b = 3.968, c = 10.192, and d = –0.074 for copper, a = 1.485E6, b = 3.951,

c = 13.222, and d = –0.125 for aluminium, R is the conductor radius, and  is the skin depth, given by:

2
 (5)
0 r

The contribution of skin effect losses can be calculated using finite element or analytical methods and

semi-empirical random configurations for conductors. One approach to three-phase cable systems is

presented in [20].

The skin effect increases conductor resistance with frequency as a result of the reduced cross-section

through which the current flows. The AC resistance for a conductor with a diameter much greater than the

skin depth can be computed from Eq. (6), where D is the conductor diameter:

l
Rac  (6)
   D  

The skin effect losses Pskin can be calculated by:

2
Pskin  I rms Rac (7)

In cases where the conductor diameter is comparable to or less than the skin depth, the exact skin

effect loss calculation formula, Eq. (8), should be applied, where Rdc is the DC resistance of the

conductor, and I0 and I1 are the modified Bessel functions [21] of the first kind in the zero and first

orders, respectively.

2
I rms Rdc  I 0   
Pskin  Re  (8)
2  I1  

with:


1  j  D (9)
2

This paper introduces hereafter a new analysis of existing electrical consumers, integrating the losses

of conductors, the investment analysis, and the choice of efficient/sustainable equipment.

 7

2.1 Identification of parameters

Three types of parameters are considered: physical, load, and operating parameters. The physical

parameters correspond to:

• Distribution boxes (Q): The distribution boxes are numbered from number 1 (initial distribution

boxes) to the total number of distribution boxes for the installation.

• Connections between distribution boxes: The connection of the distribution boxes is saved in a

matrix that identifies the connection courses. The number contained in the matrix [k,i] indicates

the number of the respective output, where k indicates the distribution boxes that provide energy,

and i indicates the distribution boxes that receive energy. Figure 1 shows an example of a

connection matrix, where distribution box k 1 provides energy to distribution box i 2.

"See Fig. 1 at the end of the manuscript".

• Length and section of the output conductors in the distribution boxes: From the length and

section, the resistance of the conductors is determined for all outputs. The values are saved in a

resistances matrix, as illustrated in Fig. 2.

"See Fig. 2 at the end of the manuscript".

The load parameters correspond to:

• The power of the loads connected to the electrical installation.

• The efficiency and power factor of the loads.

• The daily load diagram.

The operating parameters correspond to:

• The operating time of the electrical installation.

• Monthly operating days (d).

• Months of annual operation (m).

• The price of electricity (  ).

2.2 Calculations

After the input of the parameters and load diagrams, the following calculations are made:

• Determination of the load diagram associated to the output distribution boxes, adding the

corresponding load diagrams.

• Determination of the currents in all conductors of the electrical installation.

 8

• Difference in cable losses (ΔP) in the conductors affected by the changed equipment:

• Profits from the variation of cable losses (G1), given by:

n
 
G1   R[k , i](I [k , i]1 ) 2  R[k , i](I[k , i]2 ) 2 j d m  (10)
j 1

• Profits from the variation of power equipment (G2), given by:

n
G 2  [( P1[ k , i] j  P 2[ k , i ] j ) ]d m  (11)
J 1

• Total profits, given by:

n n
 
R   R[k , i ]( I [k , i ]1 ) 2  R[ k , i]( I [ k , i]2 ) 2 j d m   [( P1[k , i ] j  P 2[k , i ] j ) ]d m  (12)
j 1 j 1

3. Economic evaluation

The economic evaluation is conducted in accordance with the rational selection of a solution to be taken

during the investment decision, which should be based on a number of comparisons and analyses. The

methods can be grouped into static and dynamic methods, to be described hereafter.

3.1 Static methods

Static methods are applied for the assessment of the efficiency during the initial stage when the

economic justification of an investment is examined. One of the most popular methods involves the

payback period.

Simple Payback Time (SPBT) refers to a method that enables one to determine the overall period

necessary for the cost of the expenditure to be returned and is expressed as the length of time needed for

an investment to make enough to recoup the initial investment:

Ni
SPBT  (13)
Oi

where Ni is the initial investment, and Oi is the mean annual savings resulting from an investment.

3.2 Dynamic methods

Dynamic methods result in the verification of the credibility of the calculations due to the application of a

discount account, considering the change in the time value of money and the total cash flow associated

with an investment.
 9

The following methods have found most extensive application: Net Present Value (VAL), Internal

Rate of Return (IRR), and Payback Period (PP).

In this paper the VAL is used, which is computed from the sum of the annual cash-flows for a given

annual interest rate.

The interest rate is indicated by the investor according to the desired profitability:

n
RRk  DDk  II k V0
VAL   k
 (14)
k 0 1  a  (1  a) n

where RR is the net profit, DD is the operation cost, II is the new investment, n is the number of years of

useful life, V0 is the residual value of the old equipment, and a is the annual interest rate.

4. Software application

The software is structured using matrices and vectors that allow the characterization of the electrical

installations and respective loads. The load diagram and parameters of the installation are entered via the

keyboard or may carry out data acquisition automatically. After the installation is characterized (physical

parameters, load parameters, operating parameters), updating the data in all sections, it starts with the

distribution boxes that do not feed other distribution boxes, with the diagram loads being the set of

outputs.

Figure 3 provides a flowchart of the software application.

"See Fig. 3 at the end of the manuscript".

Figure 5 presents the results of the new software application for the installation shown in Fig. 4. The

results compare an initial situation of a normal induction motor with two more efficient induction motors,

to work 5 hours a day, providing the power losses in the cables, the VAL, and the best investment. These

results are illustrative of the capabilities of the software application developed.

"See Fig. 4 at the end of the manuscript".

"See Fig. 5 at the end of the manuscript".

 10

5. Case study

5.1 Simulation results

Figure 6 shows the scheme of a real installation with the respective parameters: heater [2,1]: 1000 W;

lamps [2,2]: 3 × 100 W, 3 × 72 W, or 3 × 20 W; lamp [3,1]: 100 W; inductor motor [3,2]: 1000 W, to

work 8 hours a day.

"See Fig. 6 at the end of the manuscript".

Fig. 7 presents the results of the new software application for the real installation shown in Fig. 6. The

results compare an initial situation of a normal 3 × 100 W incandescent lamp with a 3 × 72 W halogen

lamp and another 3 × 20 W fluorescent compact one.

"See Fig. 7 at the end of the manuscript".

5.2 Experimental validation

The experimental setup can be seen in Fig. 8, which corresponds to the scheme shown in Fig. 6.

"See Fig. 8 at the end of the manuscript".

Laboratory measurements were performed at the beginning and end of the cables identified in Fig. 6 as

A and B. With 3 × 100 W lamps, losses of 6 and 1.4 W were obtained in cables A and B respectively.

Considering the more efficient 3 × 20 W lamps (option 2), losses of 4 and 0.2 W were obtained in cables

A and B respectively.

Figures 9 and 10 shows the measurements made at the beginning and end of cable B, respectively,

considering the less efficient lamps. Figures 11 and 12 shows the measurements made at the beginning

and end of cable B, respectively, considering the more efficient lamps (option 2).

"See Fig. 9 at the end of the manuscript".

"See Fig. 10 at the end of the manuscript".

"See Fig. 11 at the end of the manuscript".

"See Fig. 12 at the end of the manuscript".

From the experimental results a 43.2% decrease in total losses was observed, which is considerable.

Thus, option 2 represents the best investment, validating the simulation results, which provided

comparative VAL results.

 11

Considering the operation over a year and large-scale electrical installations, the software application

developed represents a valuable tool for assessing different alternatives, indicating the most efficient and

sustainable ones.

6. Conclusions

The losses in electrical installations can make a considerable difference in the economic evaluation

supporting the investment decision. The results presented confirm that the VAL is superior when the

losses are included, and may even switch from negative to positive. The importance of the application of

software in real situations was also demonstrated and validated with experimental results, making it

possible to analyse and choose effective solutions from the point of view of economic profitability,

making energy use more efficient and sustainable. The analysis of energy efficiency in industrial systems

should include the whole life cycle and all the components and losses of the system for a proper

assessment.

Acknowledgments

This work was supported by FEDER funds (European Union) through COMPETE and by Portuguese

funds through FCT, under Projects FCOMP-01-0124-FEDER-020282 (Ref. PTDC/EEA-

EEL/118519/2010) and PEst-OE/EEI/LA0021/2013. Also, the research leading to these results has

received funding from the EU Seventh Framework Programme FP7/2007-2013 under grant agreement no.

309048.

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 13

Figure captions

Fig. 1. Connection matrix.

Fig. 2. Resistances matrix.

 14

Fig. 3. Flowchart of the software application.

Fig. 4. Scheme of installation A.

 15

Fig. 5. Results of the new software application for installation A.

Fig. 6. Scheme of installation B.

 16

Fig. 7. Results of the new software application for installation B.

Fig. 8. Experimental setup.

 17

Fig. 9. Initial measure in cable B (begin).

Fig. 10. Initial measure in cable B (end).

 18

Fig. 11. Measure in cable B (begin), option 2.

Fig. 12. Measure in cable B (end), option 2.