Assessment of electricity supply interruption costs
under restricted time and information resources
Peeter Raesaar, Eeli Tiigimägi, Juhan Valtin
Department of Electrical Power Engineering
Tallinn University of Technology
Department of Electrical Power Engineering
Contents
Introduction
Assessment approach
Customer survey
Analytical methods
Final results
Conclusions
Department of Electrical Power Engineering
Reliability consideration
An adequate balance between costs and reliability Traditional – establishing reliability standards
n-1 criteria normative level of LOLP or EENS permitted interruption frequency and duration per year,
etc.
Modern - consider the worth of reliability
Economically justified level of reliability
Measure of reliability worth – interruption costs
Objective – assessment of interruption cost characteristics for Estonian power system
Department of Electrical Power Engineering
revenue from unserved energy
cost of the supply restoration
direct costs indirect costs
- lost of industrial production- spoiled food or raw materials- lost personal leisure time- injury or loss of life, etc.
- crime during a blackout - business relocation, etc.
Utility costs Customer costs
Electricity supply interruption costs
Customer costs >> Utility costs
Department of Electrical Power Engineering
Interruption cost characteristics
Cost models: CDF, CENS and combined models For implementation - models characteristics are needed
CDF CENS CID
Characteristics assessment methods: customer surveys –
favorable, but most costly and time-taking
indirect analytical evaluations case studies of actual blackouts
Department of Electrical Power Engineering
Assessment approach
Short time frame - customer survey rather a pilot one
For more reliable results: customer survey + indirect analytical methods Case studies: no major breakdowns for conclusions
Final results: mean values of estimates by different methods
Interruptions cost characteristics: estimated for residential industrial commercial (+ public) agriculture sector
For whole country - weighted averages of sector estimates
Department of Electrical Power Engineering
Customer survey - questionnaires
Aim: compose CDF for different customer sectors
Design - the direct costing, indirect costing and contingent valuation approaches
Experience of UK, Canada, Denmark, Finland and Island
For residential and agricultural customers: similar, direct and indirect costing methods were used
For industrial and commercial customers: mainly the direct costing approach
Department of Electrical Power Engineering
The National Grid ordered the real implementation of the survey from a market information company
Residential survey - by CATI (Computer Assisted Telephone Interviewing) method
For other sectors - Internet survey
Responding rate in commercial and residential sector was low (correspondingly 26 and 46 %)
Survey principles were not realized properly
Customer survey
Department of Electrical Power Engineering
Short time frame and limited financial resources – not sufficiently bulk surveys for reliable results
Considerably simplified questionnaires to be suitable for telephone or Internet survey
Telephone interviewing with request to answer immediately
No special training of questioners - the competent explanations were not available
The answer “I can not say” in lists of possible answers turned very many answers useless (in commercial sector even 60-70 %)
However - substantial experience for more extensive surveys in future
Customer survey - blunders
Department of Electrical Power Engineering
020406080
100120140160180
0 1 2 3 4 5 6 7 8
Interruption duration, hours
Inte
rru
ptio
n c
ost
, €
/kW
Industrial, ACOC Industrial, EstoniaCommercial, ACOC Commercial, EstoniaAgriculture, ACOC Agriculture, EstoniaResidential, ACOC Residential, Estonia
Peak demand normalized CDF by surveys
Strongly overestimated costs in commercial and agricultural sectors
Realistic and relatively reliable results in industrial sector
Department of Electrical Power Engineering
Simple analytical macro methods
For industrial, commercial and agricultural sector:
CENS = GNP / A (€/kWh)
A – the annual electricity sales to customers of the sector
For domestic customers
CENS = HI / Ad (€/kWh)
HI – average annual household income
Ad – average annual domestic electricity consumption
Rough customer damage functions were derived
Department of Electrical Power Engineering
Deriving from values of other countries
Can be treated as a distinctive analytical method
CDF of Canada, UK, Finland, Denmark, Island, Greece, Tai, Nepal and India were analyzed
Easy and direct way - using prevailing exchange rates (ER)
Comparing on base of ER is misleading - ER do not reflect accurately the worth of electrical energy in countries
More meaningful quantitative comparison - use of purchasing power parities (PPP) estimates
Reflect the purchasing power of inhabitants of countries
Department of Electrical Power Engineering
Commercial sector CDF
0
20
40
60
80
100
120
140
160
180
2 s 1 min 20min
1h 2h 4 h 8 h 24 h
Interruption duration
Inte
rrup
tion
cost
est
imat
es,
€/k
W Canada 1991
IslandFinland
Canada 1987
Average
Denmark
Nepal
Thailand
Greece
UK
Canada 1980
India
Based on exchange rates
0
10
20
30
40
50
60
70
80
90
2 s 1 min 20min
1h 2h 4 h 8 h 24 h
Interruption duration
Inte
rrup
tion
cost
est
imat
es,
€/k
W
Nepal
Canada 1991
Canada 1980
Canada 1987
AverageFinlandIsland
Denmark
Greece
India
Thailand
Based on PPP estimates
Curve shapes are similar, placement is not the same Dispersion of PPP estimates - considerably less and the average is
much lower than in the case of ER estimates Similar results for other sectors
Department of Electrical Power Engineering
Final results
From results obtained by aforesaid methods, estimates of annual peak demand normalized CDF annual energy consumption normalized CDF cost of energy not supplied CENS and cost of interrupted demand CID
were derived Surveys of commercial and agricultural customers were
not taken into account - they practically failed
Results of residential customers survey – overestimated
Nevertheless they were considered, but with lower weight (answers on willingness to pay for avoiding interruptions were taken account of)
Department of Electrical Power Engineering
Peak demand normalized CDF
Based on customer surveyAverage of other countries based on PPPBased on GNP/ household income Final for sector
0
5
10
15
20
25
30
Inte
rrup
tion
cost
s, €
/kW
Industry Commerce
0
5
10
15
20
25
30
Inte
rrup
tion
cost
s, €
/kW
2 s 1 m 20 m 1 h 2 h 4 h 8 h
Interruption duration
Agriculture
2 s 1 m 20 m 1 h 2 h 4 h 8 h
Interruption duration
Residential
Department of Electrical Power Engineering
Final peak demand normalized CDF
0
5
10
15
20
25
30
2 s 1min 20 min 1 h 2 h 4 h 8 h 24 h
Interruption duration
Inte
rru
pti
on
co
sts,
€/k
W
Industry Commerce
Residential Agriculture
Whole country
Department of Electrical Power Engineering
Final estimates of CENS and CID
2,55
3,60
2,37 2,352,77
0,20 0,220,46
0,85
0,23
0
1
2
3
4
5
Industry Commerce Agriculture Residential Wholecountry
CENS, €/kWh CID, €/kW
n
i i
i
rLF
rCDF
nCENS
1
1 )()(0CDFCID
LF – load factor
Department of Electrical Power Engineering
Conclusions (1)
The evaluation of the worth of electric service reliability is still in its infancy in many countries, including Estonia
Growing recognition of the need to consider the link between the cost of a certain level of reliability and its value to customers
Use of any reliability worth evaluation model needs interruption cost characteristics such as CDF, CENS, CID
The outcome of the study - assessments of these characteristics for Estonian customer sectors
The results - relatively realistic and made available a set of generic data for reliability worth evaluation
Department of Electrical Power Engineering
Conclusions (2)
Due to a short time frame given for the study
small scale customers survey + indirect analytical methods + analysis of characteristics of other countries
Experience for comprehensive large-scale customer surveys in future
The approach can be recommended for assessment of electricity supply interruption cost characteristics under restricted time, financial and/or information resources
Department of Electrical Power Engineering
THANK YOU FOR ATTENTION!
Questions??