Financial Hazard Prediction Due to Power Outages Associated with Severe Weather-Related Natural Disaster Categories

Abstract

Severe weather conditions not only damage electric power infrastructure, and energy systems, but also affect millions of users, including residential, commercial or industrial consumers. Moreover, power outages due to weather-related natural disasters have been causing financial losses worth billions of US dollars. In this paper, we analyze the impact of power outages on the revenue of electric power suppliers, particularly due to the top five weather-related natural disasters. For this purpose, reliable and publicly available power outage events data are considered. The data provide the time of the outage event, the geographic region, electricity consumption and tariffs, social and economic indicators, climatological annotation, consumer category distribution, population and land area, and so forth. An exploratory analysis is carried out to reveal the impact of weather-related disasters and the associated electric power revenue risk. The top five catastrophic weather-related natural disaster categories are investigated individually to predict the related revenue loss. The most influencing parameters contributing to efficient prediction are identified and their partial dependence on revenue loss is illustrated. It was found that the electric power revenue associated with weather-related natural disasters is a function of several parameters, including outage duration, number of customers, tariffs and economic indicators. The findings of this research will help electric power suppliers estimate revenue risk, as well as authorities to make risk-informed decisions regarding the energy infrastructure and systems planning.