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Electricity supply reliability: Estimating the value of lost load

Lookup NU author(s): Emeritus Professor Ken Willis, Professor Guy Garrod


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The Office of Electricity Regulation (OFFER) reviews the performance of electricity distribution companies on reliability of supply. While physical indicators of supply reliability, such as number of outages and minutes of electricity lost per customer per year, are readily available, little is known about the monetary value placed on supply reliability by customers. This paper briefly reviews different methods to derive monetary values of power interruptions avoided, before arguing that a method which values the lost utility to consumers from outages is the most appropriate. A contingent ranking method is used to derive such lost utility values from a survey of industrial firms. The value customers place on outages avoided is higher than that currently used in appraisals of infrastructure investment, and in the determination of electricity prices, in the UK. Copyright © 1997 Elsevier Science Ltd.

Publication metadata

Author(s): Willis KG, Garrod GD

Publication type: Article

Publication status: Published

Journal: Energy Policy

Year: 1997

Volume: 25

Issue: 1

Pages: 97-103

Print publication date: 01/01/1997

ISSN (print): 0301-4215

ISSN (electronic): 1873-6777

Publisher: Pergamon


DOI: 10.1016/S0301-4215(96)00123-1


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