Value of lost load
Encyclopedia
The Value of Lost Load is the estimated amount that customers receiving electricity
with firm contracts
would be willing to pay to avoid a disruption
in their electricity service. The value of these losses can be expressed as a customer damage function (CDF). A CDF is defined as:
Loss ($/kW) = f(duration, season, time of day, notice)
Based on the calculated outage cost, a CDF can be obtained for various customer groups. Typically, there are three distinct groups of customers: residential, small and medium commercial/industry and large commercial/industrial. Figure 1 below illustrates the incremental CDFs of these three groups.
The CDF relates the magnitude of customer losses (per kW interrupted) for a given duration of a power outage. While the general shapes of all three curves are similar, the magnitude of loss varies dramatically depending on the customer’s size. Based on VoLL data from an EGAT survey in March and April 2000, it was estimated that the customers’ costs in the first hour for residential customers was Baht 11.45/kW. For large C/I and small & medium C/I customers, the cost in the first hour was Baht 29.55/kW and Baht 89.50 /kW respectively. Further research from EPRI
indicates that residential customers’ cost tend to peak at USD 1.50/kW in the first hour and falls of to USD 0.46/kW in subsequent hours. On the other hand, large C/I and small & medium C/I suffer much higher losses of USD 10/kW and USD 38/kW respectively in the first hour. This falls to USD 4/kW and USD 9/kW respectively in the subsequent hours.
The CDF predicts the loss per interrupted kW based on factors that influence the outage. The CDF is usually calculated based on defined market segments such as residential, commercial, and industrial. This is done because there are large variations of costs across the utility market segments. However, in a large area it is a normal practice that the interruption cost is aggregated to represent a general picture of the load losses. The aggregated interruption cost is called the composite CDF.
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
with firm contracts
Electricity market
In economic terms, electricity is a commodity capable of being bought, sold and traded. An electricity market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use...
would be willing to pay to avoid a disruption
Power outage
A power outage is a short- or long-term loss of the electric power to an area.There are many causes of power failures in an electricity network...
in their electricity service. The value of these losses can be expressed as a customer damage function (CDF). A CDF is defined as:
Loss ($/kW) = f(duration, season, time of day, notice)
Based on the calculated outage cost, a CDF can be obtained for various customer groups. Typically, there are three distinct groups of customers: residential, small and medium commercial/industry and large commercial/industrial. Figure 1 below illustrates the incremental CDFs of these three groups.
Electric Power Research Institute
The Electric Power Research Institute conducts research on issues related to the electric power industry in USA. EPRI is a nonprofit organization funded by the electric utility industry. EPRI is primarily a US based organization, receives international participation...
indicates that residential customers’ cost tend to peak at USD 1.50/kW in the first hour and falls of to USD 0.46/kW in subsequent hours. On the other hand, large C/I and small & medium C/I suffer much higher losses of USD 10/kW and USD 38/kW respectively in the first hour. This falls to USD 4/kW and USD 9/kW respectively in the subsequent hours.
The CDF predicts the loss per interrupted kW based on factors that influence the outage. The CDF is usually calculated based on defined market segments such as residential, commercial, and industrial. This is done because there are large variations of costs across the utility market segments. However, in a large area it is a normal practice that the interruption cost is aggregated to represent a general picture of the load losses. The aggregated interruption cost is called the composite CDF.