Abstract
This contribution presents the methodology and the application possibilities of blackout-simulator.com, a recent software development for the ad-hoc simulation of user specified power outages in Europe. This tool draws upon a novel econometric modeling approach including businesses' production data as well as data from a willingness-to-pay (WTP) survey covering more than 8300 households. Making use of these inputs, blackout-simulator.com allows elaborated economic assessments of the value of electricity supply security. Households' WTP to avoid power outages is elicited via a stated preference (SP) approach. Power outages at any user-defined time and duration in all of the European countries (at the NUTS II specification level) can be assessed for durations from 1 to 48 hours. Such analyses can serve as essential inputs especially in the discussions on necessary investments for maintaining and upgrading transmission and distribution infrastructures. This tool thus provides a rationale for electricity supply security enhancing investments and energy policy decisions. Illustrating the capabilities of blackout-simulator.com, the blackout of September 28th 2003 in Italy, is assessed in this contribution. Damages to society are found to exceed 1.15 billion Euros, which corresponds to almost 0.1 percent of the annual Italian GDP.
Highlights
Securing an uninterrupted electricity supply is essential for any advanced economy to function economically, socially and politically
It is easy to use while providing class-leading precision
Age of each economic sector and households in every country of the EU at the NUTS 2 level, as well as of the energy not supplied can be conducted in a matter of minutes
Summary
Securing an uninterrupted electricity supply is essential for any advanced economy to function economically, socially and politically. The need for action to ensure sufficient levels of ESS in the future is increasing, mainly because electricity production and distribution are currently undergoing significant restructuring. While developing the necessary measures to secure the electricity grid and future supply is primarily a challenge for the engineering disciplines, it is the task of economic research to support the development of a system of incentives to counterbalance possible market failures and enable the implementation of societally optimal measures. As supply security constitutes a non-market good, which can be purchased only in combination with the physical product (electricity), the value of supply security cannot be determined directly. That is why usually the failure of electricity supply, and in particular the cost of power outages, is used to assess supply security’s value [1,2,3]. Economic valuations of reliability are required for instance in discussions regarding necessary investments for maintaining and upgrading transmission and distribution infrastructures
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
