Risk assessment of power outages to inter-regional supply chain networks in China

Abstract

The power industry is one of the most important infrastructures in the modern supply chain. Due to the deep interdependence of enterprises on the power industry and between enterprises, power outages will cause serious cascading risks propagating through the supply chain. To assess the risk and establish a more targeted and reliable electricity security policy, we developed a dynamic adaptive agent-based supply chain model to simulate the superimposed direct and cascading indirect economic loss risks of multiple small-scale power outages. We apply this model to assess the economic loss risks of China's power outage in 2018 as a case study. With a day-by-day simulation in a whole year, the results showed that total economic loss risks caused by power outages accounted for 0.49% (ranging from 0.32% to 0.63%) of the national GDP in 2018, while the indirect economic loss risks were 2.35 times (ranging from 1.18 to 3.28) the direct loss. From the perspective of two different mechanisms of material flow and information flow, the results showed different impacts of power outages on the upstream and downstream supply chains. In addition, scenario simulations were conducted to identify 20 priority control regions to provide policy implications for securing the stability of the power supply. Overall, our model can be used to evaluate the economic loss risks caused by any historical outage events with available data and enables the early-stage warning of the financial dangers by arising power intervention policy.