Estimation of cost of unserved energy: a customer survey approach

Abstract

The investment in a power system to satisfy the energy needs of its customers must be justified by the reliability worth to the customers. It is therefore very important to obtain a good estimate of the cost of unserved energy in order to determine the appropriate level of investment in the system facilities during system planning. This paper presents the results of a recent customer survey conducted in a developing country to estimate the costs associated with various types of power outages. The results are then used to estimate the cost of energy not served considering different types of customers. The customer's survey for residential, industrial and commercial customer categories in Nepal were carried out in 2008-2010 respectively. Three years of outage data were obtained for two selected feeders in urban, semi-urban and semi-rural areas of Kathmandu valley. The results obtained for the different areas considering the different customer mix are presented in the paper.

How Valuable is the Reliability of Residential Electricity Supply in Low-Income Countries? Evidence from Nepal

“…Adding to the skepticism, our estimates of the VoLL, based on data collected in 2017, are no larger than the figures obtained by Karki et al (2010) in a survey in 2008-2010 in the early stages of the load-shedding crisis, despite the fast economic growth in Nepal over the decade since that survey. All in all, this suggests that residential households have managed to adapt to the unreliable power supply by consuming less electricity or investing in backup equipment, limiting the economic effectiveness of policies promoting cost-recovery of residential electricity service.…”

“…Second, quite surprisingly, our average VoLL estimates do not seem to be any larger than those from a survey conducted more than a decade ago, when the load-shedding crisis started (Karki et al, 2010), even though the country's GDP per capita has grown by 42% since. Third, for the sample as a whole, the VoLL is higher for service lost in unscheduled outages than for service lost during scheduled load shedding.…”

“…Second, when we convert the WTP to a VoLL (i.e., the WTP per kWh lost), our preferred estimates are in the range of 5 to 15 NR/kWh (¢4.7 to ¢14/kWh), and thus bracket the average price per kWh from the grid paid by the respondents at the time of the survey. Even more surprising, these VoLLs do not seem to be any larger than those from a survey conducted more than a decade ago, when the load-shedding crisis started (Karki et al, 2010). However, when we adjust the VoLL of those with rechargeable batteries and solar equipment to the VoLL implicit in the purchase of such equipment, we obtain higher estimates ranging from 9 to 22 NR/kWh.…”

“…handful of studies (Kateregga, 2009;Abdullah and Mariel, 2010;Karki et al, 2010;Twerefou, 2014;Oseni, 2017).…”

How Valuable is the Reliability of Residential Electricity Supply in Low-Income Countries? Evidence from Nepal

“…Additionally, one would expect a very high public distrust, which turned out a major obstacle to success of such experiments even in developed economies (Stenner et al, 2017). handful of studies (Kateregga, 2009;Abdullah and Mariel, 2010;Karki et al, 2010;Twerefou, 2014;Oseni, 2017).…”