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

Schröder, Thomas; Kuckshinrichs, Wilhelm

doi:10.3389/fenrg.2015.00055

Cited by 99 publications

(53 citation statements)

References 32 publications

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“…The estimated value of lost load (VoLL), that is, the amount that consumers would pay to avoid an outage, varies by the methodological approach. A review paper by Schröder and Kuckshinrichs () indicates that macroeconomic approaches to the issue yield estimates of VoLL in the range of approximately €10,000 to €25,000/MWh, while survey‐based methods yield VoLL estimates less than or equal to €10,000/MWh. These magnitudes are far greater than the market price of electricity.…”

Section: Introductionmentioning

confidence: 99%

The Challenge Posed by Geomagnetic Activity to Electric Power Reliability: Evidence From England and Wales

Forbes

Cyr

2017

Space Weather

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This paper addresses whether geomagnetic activity challenged the reliability of the electric power system during part of the declining phase of solar cycle 23. Operations by National Grid in England and Wales are examined over the period of 11 March 2003 through 31 March 2005. This paper examines the relationship between measures of geomagnetic activity and a metric of challenged electric power reliability known as the net imbalance volume (NIV). Measured in megawatt hours, NIV represents the sum of all energy deployments initiated by the system operator to balance the electric power system. The relationship between geomagnetic activity and NIV is assessed using a multivariate econometric model. The model was estimated using half‐hour settlement data over the period of 11 March 2003 through 31 December 2004. The results indicate that geomagnetic activity had a demonstrable effect on NIV over the sample period. Based on the parameter estimates, out‐of‐sample predictions of NIV were generated for each half hour over the period of 1 January to 31 March 2005. Consistent with the existence of a causal relationship between geomagnetic activity and the electricity market imbalance, the root‐mean‐square error of the out‐of‐sample predictions of NIV is smaller; that is, the predictions are more accurate, when the statistically significant estimated effects of geomagnetic activity are included as drivers in the predictions.

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Section: Introductionmentioning

confidence: 99%

The Challenge Posed by Geomagnetic Activity to Electric Power Reliability: Evidence From England and Wales

Forbes

Cyr

2017

Space Weather

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“…We know from previous studies that people or communities are willing to pay more than 100% of the original electric tariff if the power outage lasts for more than 24 hours. Schröder and Kuckshinrichs mentioned that power deficits because of outages can be reduced or avoided by having other power sources (such as batteries and backup generators). They term the backup power (that comes from other means) as “supply security.” They empirically found that, as the level of supply security increases, the cost associated with it also increases nonlinearly.…”

Section: Problem Modelmentioning

confidence: 99%

“…A plot of this function is given in Figure . We use those specific coefficient values because we are inspired by the nonlinear curve present in the work of Schröder and Kuckshinrichs …”

Section: Problem Modelmentioning

confidence: 99%

“…We use those specific coefficient values because we are inspired by the nonlinear curve present in the work of Schröder and Kuckshinrichs. 31 For example, at a particular hour of the day, say at 10 a.m., a community generates electric power of 200 kWh, and its demand for that hour is 350 kWh. In this work, we assume that a community does not have any storage device (such as a battery) or backup generator to meet its demand in case of less generation.…”

Section: Problem Modelmentioning

confidence: 99%

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Complementary‐based coalition formation for energy microgrids

Yasir

Purvis

et al. 2018

Computational Intelligence

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In recent years, the notion of electrical energy microgrids (MGs), in which communities share their locally generated power, has gained increasing interest. Typically, the energy generated comes from renewable resources, which means that its availability is variable, ie, sometimes there may be energy surpluses and at other times energy deficits. This energy variability can be ameliorated by trading energy with a connected electricity grid. However, since main electricity grids are subject to faults or other outages, it can be advantageous for energy MGs to form coalitions and share their energy among themselves. In this work, we present our model for the dynamic formation of such MG coalitions. In our model, MGs form coalitions on the basis of complementary weather patterns. Our agent‐based model, which is scalable and affords autonomy among the MGs participating in the coalition (agents can join and depart from coalitions at any time), features methods to reduce overall “discomfort” so that, even when all participating MGs in a coalition experience deficits, they can share energy so that their overall discomfort is reduced. We demonstrate the efficacy of our model by showing empirical studies conducted with real energy production and consumption data.

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“…The VOLL is assumed to be applicable to all customer classes, and independent of time. Research has indicated a significant range for VOLL in practice, with values depending on the time of day, day of week, customer class and also on duration [23,33]. Consequently, the real-time LOLP and stationary VOLL are parameters that the markets are currently not equipped to precisely define or calculate.…”

Section: Scarcity Pricingmentioning

confidence: 99%

The Use of Marginal Energy Costs in the Design of U.S. Capacity Markets

Moye¹,

Meyn²

2018

Proceedings of the 51st Hawaii International Conference on System Sciences

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This paper surveys the development of marginal cost theories used in the optimal allocation of scarce resources, and examines the application of these theories to current-day electricity capacity markets. The different approaches in use today to ensure grid reliability and incentivize new resources are examined. Market challenges are surveyed, as well as empirical findings that suggest that current market approaches do not provide proper incentives. We conclude that the so-called "missing money" is not missing because of defects in market designs, or socalled administrative actions-money to incentivize investments is missing due to a misapplication of marginal cost theory.Acknowledgements Research supported by the National Science Foundation under grants CPS-0931416 and EPCN-1609131. We thank Professors David Spence, Amy Stein, and Seth Blumsack for their insightful comments and encouragement. Their input as well as suggestions from the reviewers were carefully considered in the revised manuscript.

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

Cited by 99 publications

References 32 publications

The Challenge Posed by Geomagnetic Activity to Electric Power Reliability: Evidence From England and Wales

The Challenge Posed by Geomagnetic Activity to Electric Power Reliability: Evidence From England and Wales

Complementary‐based coalition formation for energy microgrids

The Use of Marginal Energy Costs in the Design of U.S. Capacity Markets

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