Working together to make innovation happen
Wednesday 12th November 2025
Electricity losses are classified as either Technical (TL), resulting from the physical movement of electricity through the network, or Non-Technical (NTL), caused by accounting issues or theft. Although NTLs represent a smaller share of overall distribution losses, they are costly – during the Discovery phase, we estimated they could account for around 1.5TWh of consumption annually, and the cost of this is socialised on to billpayers. More importantly NTLs can lead to safety incidents and are linked to high levels of criminal activities, which themselves have a much wider negative impact on society.
Whilst methods for calculating TL are well established, current methods of identifying NTL are outdated, manual, uncoordinated and very resource-intensive. Previous innovation projects focussed on reducing TL through improved technologies, however, we found in Discovery that there is opportunity to improve the detection of NTL through innovative techniques.
The I-LAD Service will enhance NTL detection and reduction through:
The tools and methodologies developed through I-LAD will be designed to be scalable and replicable, equipping stakeholders such as DNOs, Suppliers, Retail Energy Code Company (RECCo), law enforcement, and others with actionable insights, enabling more coordinated, cross-industry efforts to address NTLs effectively and equitably.
Alpha Phase will demonstrate the efficacy of NTL analytics techniques in a defined trial area. The analytics techniques will be those assessed as being supported with viable datasets during Discovery. In developing a PoC trial we will also further evaluate the data and customer protections that should be part of any governance process in an enduring solution.
Financial:
The costs of NTLs are socialised among billpayers. The I-LAD service will lead to losses being identified and reduced, with a corresponding reduction on the socialised costs borne by others.
Relevant metrics are energy and associated cost. SSEN-D’s NTLs are likely to be around 200GWh per year (based on indicative calculations in Discovery CBA). Using Ofgem’s standard value of losses (£74.42/MWh, from the SIF CBA) this has a cost of around £15m/year.
To accurately assess the proportion of losses which would be identified and reduced we will carry out further empirical analysis as part of Alpha to see how effectively losses can be identified by the solution proposed. As an indicative figure (and consistent with the Discovery CBA) if 10% of these losses could be identified and reduced then this would be valued at £1.5m/year for SSEN-D’s area alone. The service is envisaged to be national, and equivalent benefits at GB level would be around £11m/year.
Environmental:
Many activities to reduce losses will result in a reduction in energy demand (e.g. if a cannabis farm is closed down) which will also lead to a reduction in carbon emissions due to lower generation requirements.
Relevant metrics are energy and associated emissions. As above, NTL’s in SSEN-D’s region are around 200GWh per year. Based on the calculations in the SIF CBA template, these may be associated with emissions of approximately 40,000 tCO2e.
A 10% reduction in these emissions would imply a saving of 4,000 tCO2e per year, for NTLs in SSEN-D’s region alone.
Other non SIF-specific
Reduced deaths and injuries
According to Stay Energy Safe, energy theft leads to around 280 deaths and serious injuries per year. Approximately 40 of these might be in SSEN-D’s regions. Although this figure also includes injuries and deaths caused by gas theft, identification of electricity theft may also help identify users who are also stealing gas and therefore reduce these figures too.
Reduced criminal activity
Energy theft (e.g. cannabis farming) often helps to facilitate organised crime, directly affecting the safety & stability of communities. Identification and reduction of these types of energy theft can reduce this criminal activity. Initial discussions with representatives of Police Scotland have confirmed that they consider the solution proposed by I-LAD has high potential to deliver benefits in this area.
Alpha will also focus on establishing robust data governance and assurance frameworks. These will be tested in collaboration with the Working Group to ensure alignment with operational needs. Additionally, technical requirements for future integration with DNO and Supplier IT systems will be documented to support seamless transition into later development stages.
The project aims to establish the Working Group with membership from: RECCo, Law Enforcement, Fire Service, Local Authorities, Consumer Groups and 3rd Sector.
Total Cost – £587,106
SIF Funding – £499,312
3rd November – 30th April 2026
