About Transmission Loss Factors

The Transmission Loss Factor (TLF) is calculated by the Market Support Services Licensee, SP Services Ltd in accordance with the methodology approved by the regulator, the Energy Market Authority of Singapore¹.

In practice, it varies depending on the voltage level at which a consumer takes its electricity supply. The higher the voltage level, the lower the TLF. The metered quantity of electricity generated by generating units is more than the metered quantity of electricity consumed due to transmission losses (energy loss as heat as electric current passes through the transmission system (comprising the transmission network and distribution network)) as well as unaccounted for energy².

The TLF is used to allocate the difference to consumers based on their deemed contribution to this difference (mainly transmission losses for Singapore, unaccounted for energy can be greater than transmission losses in a few other countries due to rampant electricity theft). The lower the voltage level of electricity consumption, the more transmission losses are incurred delivering electricity from where it is generated to where it is consumed. This explains why TLF is higher for electricity consumption at lower voltage levels.

The table below (Source: SP Group) shows the TLFs by the Market Support Services Licensee, SP Services Ltd, in accordance with the methodology approved by the Energy Market Authority of Singapore.

How Changes in TLF Impacts a Geneco Customer

For Geneco’s electricity customers, a change in the TLF which in practice applies from 1 April of every year may or may not impact their electricity bills. It depends on the contract terms which may be loss-adjusted or metered. Loss-adjusted means that the metered electricity quantity is multiplied by the relevant TLF to obtain the deemed electricity quantity consumed. Therefore loss-adjusted customers are affected by changes in the TLF.

For metered customers, the metered electricity quantity is not multiplied by the relevant TLF to obtain the deemed electricity quantity consumed. Therefore, metered customers are not affected by the changes in the TLF.

As metered customers do not have their metered electricity consumption scaled up by the TLF, they have an implicit discount vis-à-vis loss-adjusted customers paying the same electricity price. Pricing and discounts are therefore naturally different for loss-adjusted versus metered customers.

¹ See Market Support Services Code here for more details.

² A catch-all to classify the residual difference not accounted for by transmission losses. It includes under-metering of electricity consumption which can be due to various reasons and accounts for the fact that the estimation of transmission losses is not an exact science.