The value of lost load in Swedish industry

T Broberg, R Brännlund, T Lundgren… - … for Environmental and …, 2021 - papers.ssrn.com
Center for Environmental and Resource Economics, CERE, The Value of …, 2021papers.ssrn.com
The power system is undergoing a drastic transition towards a system with high degree of
intermittency at the same time as the transition in other sectors will require more electricity.
Taken together this will make it more challenging to keep the instantaneous balance
between demand and supply in the power market with increasing risks of interruptions and
power outages as a result. The objective of this study is to estimate the cost of power
outages in the Swedish industrial sector by using firm-level, production data. Our estimates …
Abstract
The power system is undergoing a drastic transition towards a system with high degree of intermittency at the same time as the transition in other sectors will require more electricity. Taken together this will make it more challenging to keep the instantaneous balance between demand and supply in the power market with increasing risks of interruptions and power outages as a result. The objective of this study is to estimate the cost of power outages in the Swedish industrial sector by using firm-level, production data. Our estimates of interruption costs are based on firms’ actual behavior concerning their use of electricity and the values created. The main approach is complemented with a qualitative study based on a questionnaire targeting key-persons in a small number of industrial production facilities. The purpose with this is to identify firm or facility specific aspects that that are not revealed by annual firm level data.
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