In the power industry, losses are categorized into two main types:

1. Technical Losses: These are unavoidable losses that occur naturally within the physical components of the grid. They are inherent to the process of transmitting electricity and are primarily caused by the resistance of conductors, transformers, and other equipment. A significant portion of these losses is due to resistive heating, where some electrical energy is converted into heat as it travels through power lines.

2. Non-Technical Losses: These are also known as commercial losses and are entirely preventable. They are not related to the physical properties of the grid but rather to human and administrative factors, such as electricity theft, faulty metering, billing errors, and unbilled consumption.

While technical losses can be minimized, they can never be fully eliminated. Non-technical losses, however, can be significantly reduced through better management and technological solutions.