Evaluation of reliability worth and value of lost load

Abstract

Customers' perceptions of reliability may not always reflect the level of reliability purported by traditional reliability indices. This has been recognised and efforts have been made by the electricity supply industry (ESI) in the United Kingdom to relate ‘reliability investment’ with customers' marginal benefits obtained from such investment. A difficulty encountered during such earlier and recent efforts has been the lack of appropriate valuation of these benefits. With a view to correcting this paucity, the authors have conducted studies, based on customer surveys, aimed at assessing the customer outage costs (COC) due to electric service interruptions. The incremental values of these costs, ΔCOC, following reliability investment are considered proxies of reliability worth and customers' marginal benefits. The results of these studies have provided a very good insight into customers' concerns regarding supply interruptions, but most importantly a coherent method for evaluating the customer benefits (ΔCOC) has been developed and the required generic data for such evaluation generated. Using these data, a consistent method for calculating the value of lost load (VOLL) is also developed.