Assessing energy supply security: Outage costs in private households

Abstract

The objective of this paper is to contribute to the topic of energy supply security by proposing a Monte Carlo-based and a survey-based model to analyze the costs of power interruptions. Outage cost estimations are particularly important when deciding on investments to improve supply security (e.g. additional transmission lines) in order to compare costs to benefits. But also, other policy decisions on measures that have direct or indirect consequences for the supply security (e.g. a phasing out of nuclear energy) need to be based on results from outage cost estimations. The main focus of this paper lies with residential consumers, but the model is applied to commercial, industrial and governmental consumers as well. There are limited studies that have approached the problem of evaluating outage cost. When comparing the results of these studies, they often display a high degree of diversification. As consumers have different needs and dependencies towards the supply of electricity because of varying circumstances and preferences, a great diversity in outage cost is a logical consequence. To take the high degree of uncertainties into account, a Monte Carlo simulation was conducted in this study for the case of private households in Germany.

Value of Lost Load: An Efficient Economic Indicator for Power Supply Security? A Literature Review

“…First, the consideration and weighting of the technical factors from Table 1 play a major role. If different assumptions are made in structuring the framework of the scenario, for instance about the duration or the regional location of the blackout [in the present case, Praktiknjo et al (2011) and Röpke (2013) consider Germany as a whole, Growitsch et al (2013) consider the level of the federal states, and Piaszeck et al (2013) consider the regional districts], then this affects the results obtained. Second, the subdivision of the industrial sectors influences the resulting VoLL values.…”

“…Upon closer consideration, it becomes apparent that, for example, the studies by Praktiknjo et al (2011), Growitsch et al (2013), Piaszeck et al (2013), and Röpke (2013) regard the whole of Germany as the area of study, but the damage costs differ greatly. Another explanation can, therefore, be found in the differences in the more detailed methodological structure of the studies.…”

The Costs of Power Interruptions in Germany: A Regional and Sectoral Analysis

“…Praktiknjo et al . () conclude that such a decrease in the level of service reliability in Germany would cause significant economic costs.…”

The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions

“…In a case study approach focusing on the power interruptions that occurred in the US on 14-15 August 2003, Lacommare and Eto [13] estimated the cost to electricity consumers, indicating that the annual cost for power interruptions to US electricity consumers was around 79 billion USD. In Germany, Praktiknjo, Hahnel, and Erdmann [14] proposed a survey-based model to analyze the costs of power interruptions; Praktiknjo [15] used online survey data within a two-staged bottom-up regression model and implied that power interruptions are in average relatively expensive for residential consumers. The author also showed that the duration of a power interruption has a significant impact on the magnitude of the interruption costs.…”