Abstract
The transition of the German electricity system towards a renewable, nuclear free and increasingly fluctuating power generation raises concerns about supply security. A possible contribution to solve this issue might lie in demand response or load shedding measures. The goal of our work is to monetarily quantify the consequences of power interruptions. The focus lies on power interruption costs in 51 economic sectors. Two input-output models are proposed to estimate the Value of Lost Load for each sector. The first does not take inter-linkages of the sectors and possible cascading effects on interruption costs into account. The second model is a new and innovative approach which is based on the Ghosh Input-Output model and which accounts for these effects. We assume that the first model is adequate to assess shorter power interruptions, whereas the second model might be more appropriate when estimating costs of longer interruptions.
Highlights
The German electricity system is currently undergoing a very fundamental transition calledEnergiewende from fossil fuels towards renewable supply
The second model is a new and innovative approach which is based on the Ghosh Input-Output model and which accounts for these effects
The more power demand falls in times when wind and photovoltaic generation is mainly available, the higher the utilization rate of conventional power generation will be
Summary
The German electricity system is currently undergoing a very fundamental transition calledEnergiewende from fossil fuels towards renewable supply. The goals of the government are to increase the shares of renewables to 35 percent by 2020, and to 80 percent by 2050 In addition to these ambitions, the government decided to completely phase out nuclear energies by the year of 2022 after the events of the catastrophe in Fukushima. Facing these ambitious plans, more and more concerns regarding security of supply are being expressed. Increasing flexibility of demand by measures such as interruptible load seems to be an interesting option because of the following factors: conventional power plants are struggling more and more with decreasing full load hours and shrinking contribution margins, making it more difficult to recover investments; and storage systems are still very expensive and dependent on price arbitrage possibilities. In order to estimate the economic potential of demand side measures, fundamental knowledge of supply security and monetary utility of power demand is necessary
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