Are investments in the electricity grid the solution to power cuts caused by massive fraud?

In July 2023, we saw a typical example of the consequences of electricity fraud in the distribution network, mainly that used for marijuana plantations, and how the improvement and strengthening of the network are a short-term solution to guarantee supply.

A transformation centre in Torreblanca, in Seville, was unable to resist the network overload caused by massive fraud and was rendered completely unusable. The transformer centre, which had been updated with the latest technology just weeks earlier, was capable of supplying power to 1,200 customers despite having just 200 active contracts in the area.

Over the past two years, we have been working on a plan to reinforce the infrastructure in the city of Seville that has entailed a 60% increase in the capacity of the networks in the neighbourhoods most affected by electricity fraud, in spaces with no new urban, business or industrial developments.

We have installed 9 new transformer centres in the neighbourhoods most affected by the network overload and reinforced around 25 kilometres of medium- and low-voltage circuit. The average investment per customer in these neighbourhoods is 5 times higher than in other areas of Seville.

Despite these effort, customers with supply contracts from different neighbourhoods of Seville, such as Polígono Sur, Torreblanca, Palmete, Padre Pío or La Plata continue to suffer power cuts due to network overloads for which there is no technical explanation, because the capacity of the facilities is much higher than what would theoretically be needed. They are being caused by illegal connections to the grid, often used to supply marijuana plantations.

What are illegal connections and what are the consequences of them?

An illegal connection is a connection made by unauthorised persons from outside the company directly to the low-voltage grid without any supply contract being in place, without the electricity company being aware of this, in breach of all grid security measures. These are the most common case of electricity fraud and account for 60% of these offences.

In addition to the legal and economic impact, manipulated installations can have a very serious impact on personal health and safety and, as goes without saying, the proper functioning and quality of supplies. Due to fraud, customers who have an active contract and pay their bills on time suffer constant power outages, which intensify at times of peak demand.

For starters, as they are made by individuals, illegal connections fail to comply with the basic standard protection elements, which are mandatory under the regulations in force to guarantee their safety and the safety of installations. As a result, these installations can often trigger electrocutions, discharges or even excessive overheating and fires in buildings, meaning that they can represent a mortal danger.

Furthermore, when manipulating electrical installations, leaving them without the necessary protections and adding more load than expected to a grid, the quality will inevitably decrease, despite the fact that, as previously mentioned, the network is oversized. In this sense, when there is an overload in the grid, the protections in place at the company's transformation centres (fuses) are activated, to avoid, insofar as possible, even more harmful consequences.

Measures for combatting the impact of illegal connections

The problem posed by illegal connections and power cuts is of great concern for both citizens and institutions and electricity companies. At Endesa, we are constantly on the look-out for solutions to alleviate the consequences and increase people's safety:

• Cooperation with the Security Forces against electricity fraud: technicians from our network subsidiary, e-distribución, perform joint interventions with the Police and Civil Guard to combat electricity fraud.  In 2022, we performed around 1,800 joint interventions with the Security Forces to dismantle illegal connections in areas with a high concentration of fraud in the areas where we supply electricity.
• Increase in investment to strengthen the network: Endesa implements annual action plans to improve and reinforce the entire electricity grid, including specific actions to anticipate planned increases in demand, with the necessary safety margins for dealing with the effects of network overload caused by illegal connections. The total investment in the electricity grid in 2022 came to 890 million euros.
• Technological improvements: by digitising the grid and analysing data with machine learning and deep learning, our teams look for deviations and other unusual behaviour to more accurately detect possible fraud.
• Increase in and improvement of inspections: we have reinforced inspections to detect electricity fraud, which occurs in different sectors of activity and segments of the population, although only 14% of the energy recovered as a result of fraud corresponds to small domestic consumers with a contracted power of less than 3.5 KW.
• Collaboration with local residents: using the different reporting channels, anybody can anonymously collaborate to discover and dismantle fraud. For example, in 2022 alone, 62,769 complaints were received through e-distribution channels, leading to 21,195 inspections; 75% more than in 2021.
• The penalties imposed for electricity fraud offences in Spain are much lower than those of our European neighbours, meaning they do not serve as a deterrent, rather they serve as a call for mafias dedicated to the cultivation and distribution of marijuana. A change in legislation to toughen the penalties imposed for electricity fraud and bring them in line with those imposed in other European countries such as Germany, France or Italy could help address the problem.

Electricity fraud, a growing problem

The reality is that the increase in investment to improve the grid and enhance fraud detection actions are insufficient in avoiding the serious impact of illegal connections for two main reasons: first of all, investments last a limited amount of time, as the increase in power serves as a call for people to make new illegal connections, and second of all, people who commit fraud are repeat offenders and install illegal connections again.

At e-distribución, which operates as a distribution company in Andalusia, Extremadura, Aragon, the Balearic Islands, the Canary Islands and Catalonia, we have been strengthening our grids for years to repair the damage caused by massive fraud in the grid.

Despite these measures, electricity fraud is on the rise. In 2022, a total of 55,167 illegal connections were detected across Spain, an average of more than 150 per day. From this total, almost a third of the energy consumed was linked to the cultivation of marijuana, coming to an annual total of 2,200 GWh, equivalent to the entire city of Seville in one year.

To find a solution to this structural problem, the collaboration of all competent administrations, as well as social institutions and society as a whole is necessary to eradicate the illegal cultivation of marijuana in urban environments.