If, now, energy from the water-power is to be transmitted over a distance of many miles, a new set of costs is to be met. In the first place, it will be necessary to raise the voltage of the transmitted energy much above the pressure at the dynamos in order to save in the weight and cost of conductors for the transmission line. This increase of voltage requires transformers with capacity equal to the maximum rate at which energy is to be delivered to the line. These transformers will add to the cost of the energy that they deliver in two ways: by the absorption of some energy to form heat, and by the sum of annual interest, maintenance, and depreciation charges on the price paid for them. Other additions to the cost of energy delivered by the transmission line must be made to cover the annual interest, maintenance, and depreciation charges on the amount of the line investment, and to pay for the energy changed to heat in the line.
Near the points where the energy is to be used, the transmission line must end in transformers to reduce the voltage to a safe figure for local distribution. This second set of transformers will further add to the cost of the delivered energy in the same ways as the former set.
From these facts it is evident that, to warrant an electrical transmission, the value of energy at the point of distribution should at least equal the value at the generating plant plus the cost of the transmission. Knowing the cost of energy at one end of the transmission line and its value at the other, the difference between these two represents the maximum cost at which the transmission will pay.
Three main factors are concerned in the cost of electric power transmission, namely, the transformers, the pole line, and the wire or conductors. These factors enter into the cost of transmitted energy in very different degrees, according to the circumstances of each case. The maximum and average rates of energy transmission, the total voltage, the percentage of line loss, and the length of the line mainly determine the relative importance of the transformers, pole line, and conductors in the total cost of delivered energy.
First cost of transformers varies directly with the maximum rate of transmission, and is nearly independent of the voltage, the length of the transmission, and the percentage of line loss. A pole line changes in first cost with the length of the transmission, but is nearly independent of the other factors. Line conductors, for a fixed maximum percentage of loss, vary in first cost directly with the square of the length of the transmission and with the rate of the transmission; but their first cost decreases as the percentage of line loss increases and as the square of the voltage of transmission increases.