Economic cable sizing selects a conductor based on the overall life-cycle cost of the installation, not only the minimum size needed to satisfy current-carrying capacity, voltage drop and fault withstand.
The economically optimum cable is often larger than the minimum technically acceptable size. The supply and installation cost is higher, but the operating losses are lower, which can reduce the total cost over the life of the circuit and improve the energy efficiency of the installation.
Why a larger cable can be cheaper overall
Cable losses are mainly driven by conductor resistance and load current. Increasing conductor size reduces resistance, which reduces I2R losses during operation. For circuits with high loading, long operating hours or high energy cost, the reduction in losses may justify the additional capital cost of a larger cable.
This is a separate check from minimum safety compliance. A cable still needs to satisfy the usual sizing requirements, including current rating, voltage drop and fault thermal withstand.
IEC 60287-3-2 method
IEC 60287-3-2 gives a method for selecting a cable size based on economic optimisation. It considers the initial investment and the future cost of energy losses over the anticipated operating life of the cable.
The total cost of the installed cable length can be expressed as:
| CT | Total cost of the installed cable length, in currency units |
| CI | Installed cost of the cable, including supply and installation |
| CJ | Present value of Joule losses over the life of the cable |
The loss-cost term includes the cost of energy wasted in the cable and may also include the cost of the additional supply capacity required to provide those losses. The economically optimum size is the size that minimises the total cost function, subject to the normal technical constraints.
Energy efficiency and BS 7671
The original knowledge-base note discussed the then-forthcoming 18th Edition of BS 7671. That wording has been updated here: BS 7671:2018 has since been published and amended, with Amendment 4:2026 now available. Energy efficiency should therefore be considered against the current edition and the project specification rather than against the 2018 draft position.
For practical cable design, economic optimisation is best treated as an additional design check after the minimum compliant cable size has been established. It helps answer whether increasing the conductor size gives a worthwhile payback through lower losses.
Inputs for an optimisation study
- Minimum cable size that satisfies current rating, voltage drop and fault withstand.
- Installed cost of each candidate cable size.
- Expected load current or load profile over the cable life.
- Operating hours and anticipated utilisation.
- Energy cost and any expected escalation.
- Project discount rate or present-value basis.
- Expected operating life of the circuit.
- Additional supply-capacity cost associated with losses, where applicable.
Use in myCableEngineering
Many of the calculation components needed for economic optimisation are already part of cable sizing: load current, resistance, losses, installation conditions and current rating. The additional step is to compare candidate cable sizes over the life of the installation and identify the lowest total cost, rather than simply the smallest acceptable conductor.
For related background, see Cable Sizing, Cable Sizing Standards and Cable Thermal Analysis.
For the conductor loss calculation behind life-cycle operating cost, see Cable Power Loss.