Marginal Loss Factors (MLFs) explained

MLFs have recently featured in the news because investors have lost hundreds of millions of dollars from generator development in areas with poor MLFs. A generator’s MLF represents the amount of incremental power lost due to heat in the transmission network when an incremental amount of power is injected into the network. It is an important element to assess in the project development process because it is a multiplier on the amount of revenue the generator will receive from their energy. Generator MLFs in the NEM currently range from around 0.75 to 1 which means that new projects could potentially lose 25% of their revenue or more if they are developed in areas with high transmission losses.

This video aims to explain what MLFs are and the key factors which impact them.

ACIL Allen has developed its own MLF modelling capability which it has used successfully in recent engagements when assisting clients to assess renewable energy development projects. For further information about our MLF capability or to request an MLF assessment, please contact Jonathan Ben-Tovim: E-mail: j.ben-tovim@acilallen.com.au, Phone: +61 7 3009 8725.