Loss reduction in a distribution system by considering interest rate


  • Mehdi Izadi Department of Electrical Engineering, Saveh Branch, Islamic Azad University, Saveh, Iran
  • Farzad Razavi Department of Electrical, Computer and Biomedical Engineering, Qazvin Branch, Islamic Azad University, Qazvin, Iran


loss reduction, interest rate, load imbalance adjustment, capacitor placement, inappropriate transformers, dilapidated conductors, weak connections


This paper is a report on a study which attempted to explore the effect of the rate of interest on the invested capital for the period under study, or interest rate (IR) for short, on loss reduction in an actual distribution network in Iran (Qazvin Power Distribution Company). For this purpose, five methods of loss reduction were compared in terms of the degree of loss reduction and cost-effectiveness: load imbalance adjustment, capacitor placement, and replacement of inappropriate transformers, dilapidated conductors, and weak connections. The objective function was performed both by and without considering IR. It was found that if IR is considered, more reduction will be realized and findings will be more realistic. This indicates that loss reduction is more cost-effective in the countries where IR is higher than in other countries. The model presented in this paper can help power utilities decide whether or not to invest in loss reduction. This work was fully funded by the Qazvin Electric Distribution Company under the contract number 420.