This paper sets out an approach to determining forward--‐looking long run costs for the three main supply chain components of the cost of losses:
• Energy generation;
• The provision of network capacity; and
• The provision of incremental upstream losses.
The analysis in this report has provided average loss costs by voltage level and is specific to the NSW region of the Australian National Energy Market (NEM). However, it provides a clear indication that a significant change in the cost of losses now needs to be factored into investment analysis across the NEM.