Recording losses in Recording losses in the revised SEEA the revised SEEA

- Issue 16 -- Issue 16 -Alessandra Alfieri, United Nations Statistics DivisionAlessandra Alfieri, United Nations Statistics Division

Ole Gravgard, Statistics DenmarkOle Gravgard, Statistics Denmark

London Group Meeting London Group Meeting Canberra 27-30 April 2009Canberra 27-30 April 2009

OutlineOutline

• Typology of lossesTypology of losses• Recording of losses in the 2008 SNARecording of losses in the 2008 SNA• Recording of losses in the SEEAWRecording of losses in the SEEAW• Proposal for recording losses in the revised Proposal for recording losses in the revised

SEEASEEA

Typology of lossesTypology of losses

• Losses during extraction/abstraction• Losses during distribution• Losses during storage• Losses during conversion/transformation• Losses due to theft

Losses during extractionLosses during extraction

• Occur between the time of extraction (e.g. Occur between the time of extraction (e.g. flaring and venting) or before the natural flaring and venting) or before the natural resource reaches the establishment where it resource reaches the establishment where it is processedis processed

• They may be unwanted or necessary to They may be unwanted or necessary to maintain the safety of the system (e.g. maintain the safety of the system (e.g. flaring and venting)flaring and venting)

Losses during distributionLosses during distribution

• Occur between a point of extraction and a Occur between a point of extraction and a point of use of reusepoint of use of reuse

• May be caused by:May be caused by:• Evaporation of water from open channels Evaporation of water from open channels

used for distributionused for distribution• LeakagesLeakages• Loss of heat during transport of steamLoss of heat during transport of steam• Other causesOther causes

Losses during storageLosses during storage

• Losses of energy products and materials Losses of energy products and materials held in storageheld in storage

• May be caused by:May be caused by:• EvaporationEvaporation• Leakages of fuelsLeakages of fuels• WastageWastage• Accidental damageAccidental damage

Losses during conversionLosses during conversion

• Occur when one product is used as an input Occur when one product is used as an input in the production process to produce in the production process to produce another energy productanother energy product

• Related to the production processRelated to the production process• Conceptually not a loss in the SNAConceptually not a loss in the SNA• Need for mass/energy balance between Need for mass/energy balance between

input and outputinput and output

Losses due to theftLosses due to theft

• Water, electricity and other materials taken Water, electricity and other materials taken illegally from the distribution network or from illegally from the distribution network or from storagestorage

• Special case of losses in distribution and in Special case of losses in distribution and in storagestorage

• Discussed separately because the products stolen Discussed separately because the products stolen remain within the economy while other losses remain within the economy while other losses return in various forms back to the environmentreturn in various forms back to the environment

Recording losses in 2008 SNA - Recording losses in 2008 SNA - Losses during extraction and distributionLosses during extraction and distribution

• They do not enter the system because there They do not enter the system because there is no economic transactionsis no economic transactions

• Output represents the value of the sale and Output represents the value of the sale and is recorded net of lossesis recorded net of losses

Recording losses in 2008 SNA - Recording losses in 2008 SNA - Losses during storageLosses during storage

Asset accountsAsset accounts• Withdrawal from inventory (if regular Withdrawal from inventory (if regular

and expected)and expected)• Other changes in volume of assets Other changes in volume of assets

n.e.c. (if extraordinary)n.e.c. (if extraordinary)Supply and use tablesSupply and use tables• Withdrawal from inventory and are Withdrawal from inventory and are

deducted from the outputdeducted from the output

Recording losses in 2008 SNA – Recording losses in 2008 SNA – Losses due to theftLosses due to theft

• Theft is not a transaction as there is no Theft is not a transaction as there is no mutual agreement between the parties mutual agreement between the parties involvedinvolved

• Special case of losses in distribution and Special case of losses in distribution and storage – same recording as in the previous storage – same recording as in the previous casescases

• Output is calculated net of theftOutput is calculated net of theft

Recording losses in the SEEA-Recording losses in the SEEA-2003 and SEEAW 2003 and SEEAW

• SEEA-2003: No specific mention of losses SEEA-2003: No specific mention of losses • SEEAW – only losses in distribution are relevantSEEAW – only losses in distribution are relevant• Supply and use of water within the economy is recorded Supply and use of water within the economy is recorded

NET of losses in line with the SNA conventionNET of losses in line with the SNA convention• Flows within the economy are fully consistent with the Flows within the economy are fully consistent with the

SNA monetary flowsSNA monetary flows• Losses are recorded either as a flow back to the Losses are recorded either as a flow back to the

hydrological system (leakages) or as water consumptionhydrological system (leakages) or as water consumption• Water consumption is the part of water that is not returned Water consumption is the part of water that is not returned

to the inland water resources or to the sea. It is water that to the inland water resources or to the sea. It is water that is evaporated or that remains in the economy (incorporated is evaporated or that remains in the economy (incorporated into products).into products).

Recording losses in the SEEAWRecording losses in the SEEAW

Consumption

Losses during distribution (leakages)

Supply to other economic units (net of losses)

Return flows

Total abstraction

Abstraction for distribution

Abstraction for own use

Supplier User

148

18130

16 20

91

21 = (130 - 91 - 20) + (18-16)

73

SEEAW – Recording of losses - SUTSEEAW – Recording of losses - SUTUse table

ISIC

ISIC

1

(use

r)

ISIC

36

(sup

plie

r)

Tota

l

U1 - Total Abstraction: 148 148 Abstraction for own use 18 18 From the

environment Abstraction for distribution 130 130

Within the economy U2 – Use of water received from other economic units 91 0 91

U=U1+U2 - Total use of water 91 148 239

Supply table

ISIC

ISIC

1

(use

r)

ISIC

36

(sup

plie

r)

Tota

l

Within the economy S1 - Supply of water to other economic units 0 91 91

S2 - Total returns 73 36 109 Losses in distribution (leakages) 20 20 From the

economy Other returns 16 16

S=S1+S2 - Total supply of water 73 127 200 Consumption (= U - S) 18 21 39

Of which: Losses in distribution (evaporation, theft, etc.) 19 19

SEEAW – Gross supply and theft SEEAW – Gross supply and theft Supplementary tableSupplementary table

Supply table

ISIC

ISIC

1

(use

r)

ISIC

36

(sup

plie

r)

Tota

l

S – (Net) Supply of water to other economic units 91 91

L - Losses in distribution (=L1.+L2.) 39 39 L1. Leakages 20 20 L2. Other (e.g. evaporation, apparent

losses, theft, other losses) 19 19

Gross supply within the economy (= S + L) 130 130

Recording losses in revised SEEARecording losses in revised SEEAA proposalA proposal

• Flows within the economy remain consistent with Flows within the economy remain consistent with the SNA (flows are recorded net of losses)the SNA (flows are recorded net of losses)

• All losses are separately identified either in the All losses are separately identified either in the portion of the supply table showing flows back to portion of the supply table showing flows back to the environment or in supplementary items the environment or in supplementary items (balancing items) (e.g. theft since it remains (balancing items) (e.g. theft since it remains within the economy)within the economy)

• Losses are recorded by economic activity (ISIC) Losses are recorded by economic activity (ISIC) and by productand by product

• Supplementary supply and use tables showing Supplementary supply and use tables showing gross flows including for theft are presentedgross flows including for theft are presented

Example for energyExample for energy

Electricity generation City

50 PJ 25 PJ

Storage

30 PJ

Losses during conversion

Heat to atmosphere and water

12 PJ

Losses due to flaring

Heat to atmosphere

7.5 PJ

Losses during distribution

Chemical energy (in natural gas)to atmosphere

20 PJ

Losses duringdistribution

Heat to atmosphere

13 PJ

Extraction116 PJ

Natural gas “deposit”

Thermal and other losses

Heat to atmosphere

Losses during storage

Chemical energy (in natural gas) to atmosphere

5 PJ

Natural gas (CPC 1202) Electricity (CPC 1710)

Losses

Energy losses example

Reinjection6 PJ

Losses due to venting

Chemical energy(in natural gas)to atmosphere

2.5 PJ

ISIC 06 ISIC 35

2PJ2PJ 20PJ20PJ 8PJ8PJ

Output ISIC 6: 75 (116-6-2.5-7.5-20-5)Output ISIC 6: 75 (116-6-2.5-7.5-20-5)Output ISIC 35: 50 (75-12-13)Output ISIC 35: 50 (75-12-13)

Physical use tablePhysical use table

Industries (by ISIC categories)

6 35 Total Hou

seho

lds

Cha

nges

in

inve

ntor

ies

Tota

l

U1 - Total extraction From the environment Natural gas 116 116 116

U2 - Use of energy products 50 50 25 25 100 Natural gas 50 50 25 75

Within the economy

Electricity 25 25 U=U1+U2 - Total use 116 50 166 25 25 216

Physical supply tablePhysical supply tableIndustries (by ISIC

categories)

6 35 Total Hou

seho

lds

Cha

nges

in

inve

ntor

ies

Tota

l

S - Supply 75 25 100 100

Natural gas 75 75 75 Within the economy

Electricity 25 25 25 L – Losses 29 17 46 46

L.1- Losses during extraction 16 16 16 Reinjection 6 6 6 Flaring 7.5 7.5 7.5 Venting 2.5 2.5 2.5

L.2- Losses during distribution (excluding theft) 10 5 15 15 L.3- Losses during storage (excluding theft) 3 3 3

To the environment

L.4- Losses during conversion 12 12 12 S - Total supply (= S+L) 104 42 146 146 Balancing item (= U-S) 12 8 20 25 25 20

Theft During distribution 10 8 18 18 During storage 2 2 2

Balancing itemBalancing item• Balancing item is the difference between total use Balancing item is the difference between total use

and total supplyand total supply• It represent materials that remain within the It represent materials that remain within the

economy (in inventory, final use, theft)economy (in inventory, final use, theft)• Advantages of this recordingAdvantages of this recording

• SEEA flows are fully consistent with SNA SEEA flows are fully consistent with SNA flowsflows

• Theft is not a flow from the environment to the Theft is not a flow from the environment to the economy but stays within the economyeconomy but stays within the economy

• Recording fully consistent with the water caseRecording fully consistent with the water case

Gross supply of energyGross supply of energy

Supply table

ISIC

ISIC

6

ISIC

35

Tota

l

S – (Net) Supply of water to other economic units 75 25 100 L – Losses (including theft) 41 25 66

L.1- Losses during extraction 16 16 Reinjection 6 6 Flaring 7.55 7.5 Venting 2.55 2.5

L.2- Losses during distribution 10 5 15 L.3- Losses during storage 3 3 L.4- Losses during conversion 12 12 L.5- Theft 12 8 20

Gross supply within the economy (= S + L) 116 50 166

Supplementary physical supply Supplementary physical supply table for thefttable for theft

Industries (by ISIC categories)

1 6 35 36 Total (Net) Supply

Natural gas 75 75 Theft during distribution 10 10 Theft during storage 2 2 Electricity 25 25 Theft during distribution 8 8

Gross supply Natural gas 87 87

Within the economy

Electricity 33 33

Supplementary physical use Supplementary physical use table for thefttable for theft

Industries (by ISIC categories)

1 6 35 36 Total Hou

seho

lds

Total

Use

Natural gas 2 50 10 62 25 87 Theft 2 10 12 12

Electricity 33 33

Within the economy

Theft 8 8

Recording losses in revised SEEARecording losses in revised SEEAA proposalA proposal

• Flows within the economy are recorded net of Flows within the economy are recorded net of losseslosses

• All losses are separately identified either in the All losses are separately identified either in the portion of the supply table showing flows back to portion of the supply table showing flows back to the environment or in supplementary items the environment or in supplementary items (balancing items) (e.g. theft since it remains (balancing items) (e.g. theft since it remains within the economy)within the economy)

• Losses are recorded by economic activity (ISIC) Losses are recorded by economic activity (ISIC) and by productand by product

• Supplementary supply and use tables showing Supplementary supply and use tables showing gross flows including for theft are presentedgross flows including for theft are presented

Advantages of the proposalAdvantages of the proposal

• Standard tables consistent with the SNA Standard tables consistent with the SNA flowsflows

• All losses, including theft are separately All losses, including theft are separately identified and can be re-aggregated in identified and can be re-aggregated in supplementary tables for analytical supplementary tables for analytical purposes (gross recording and theft)purposes (gross recording and theft)

Disadvantages of proposalDisadvantages of proposal

• Energy statistics record Energy statistics record • Flows of primary products net of lossesFlows of primary products net of losses• Flows of secondary products including lossesFlows of secondary products including losses

• Inconsistency with the recording of energy Inconsistency with the recording of energy statistics for secondary productsstatistics for secondary products

• Analytically is useful to show gross outputAnalytically is useful to show gross output• Issue is currently being discussed by InterEnerStatIssue is currently being discussed by InterEnerStat

Questions to the London GroupQuestions to the London Group

• Does the London Group agree with the typology Does the London Group agree with the typology of losses presented in Section B?of losses presented in Section B?

• Does the London Group considers useful a table Does the London Group considers useful a table on the presentation of gross supply (Tables 2 on the presentation of gross supply (Tables 2 and 5)?and 5)?

• Does the London Group agree with the Does the London Group agree with the suggested recording of losses during extraction, suggested recording of losses during extraction, distribution, storage and conversion as presented distribution, storage and conversion as presented in Tables 3 and 5?in Tables 3 and 5?

• Does the London Group agree with the Does the London Group agree with the supplementary table for theft?supplementary table for theft?