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The Value of Lost Load for Sectoral Load Shedding Measures: The German Case with 51 Sectors

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  • Aaron Praktiknjo

    (School of Business and Economics, RWTH Aachen University, Mathieustr. 10, 52074 Aachen, Germany)

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.

Suggested Citation

  • Aaron Praktiknjo, 2016. "The Value of Lost Load for Sectoral Load Shedding Measures: The German Case with 51 Sectors," Energies, MDPI, vol. 9(2), pages 1-17, February.
    • Handle: RePEc:gam:jeners:v:9:y:2016:i:2:p:116-:d:64126
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    References listed on IDEAS

    as
    1. Christian Growitsch & Raimund Malischek & Sebastian Nick & Heike Wetzel, 2015. "The Costs of Power Interruptions in Germany: A Regional and Sectoral Analysis," German Economic Review, Verein für Socialpolitik, vol. 16(3), pages 307-323, August.
    2. Louis de Mesnard, 2009. "On the fallacy of forward linkages: A note in the light of recent results," LEG - Document de travail - Economie 2009-05, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
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    5. Reichl, Johannes & Schmidthaler, Michael & Schneider, Friedrich, 2013. "The value of supply security: The costs of power outages to Austrian households, firms and the public sector," Energy Economics, Elsevier, vol. 36(C), pages 256-261.
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    7. Jan Oosterhaven, 2012. "Adding Supply-Driven Consumption Makes The Ghosh Model Even More Implausible," Economic Systems Research, Taylor & Francis Journals, vol. 24(1), pages 101-111, October.
    8. repec:rre:publsh:v:34:y:2004:i:1:p:57-71 is not listed on IDEAS
    9. Christian Growitsch & Raimund Malischek & Sebastian Nick & Heike Wetzel, 2015. "The Costs of Power Interruptions in Germany: A Regional and Sectoral Analysis," German Economic Review, Verein für Socialpolitik, vol. 16(3), pages 307-323, August.
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    Cited by:

    1. Majid Hashemi & Glenn P. Jenkins & Roop Jyoti & Aygul Ozbafli, 2018. "Evaluating the Cost to Industry of Electricity Outages," Development Discussion Papers 2018-14, JDI Executive Programs.
    2. Tong Kang & Jiangang Yao & ThanhLong Duong & Shengjie Yang & Xiangqian Zhu, 2017. "A Hybrid Approach for Power System Security Enhancement via Optimal Installation of Flexible AC Transmission System (FACTS) Devices," Energies, MDPI, vol. 10(9), pages 1-32, September.
    3. Ruhnau, Oliver & Hirth, Lion & Praktiknjo, Aaron, 2020. "Heating with wind: Economics of heat pumps and variable renewables," Energy Economics, Elsevier, vol. 92(C).
    4. Vennemo, Haakon & Rosnes, Orvika & Skulstad, Andreas, 2022. "The cost to households of a large electricity outage," Energy Economics, Elsevier, vol. 116(C).
    5. Christina Kockel & Lars Nolting & Kevin Pacco & Carlo Schmitt & Albert Moser & Aaron Praktiknjo, 2022. "How Dependent Are European Power Systems and Economies on Natural Gas?—A Macroeconomic Optimization for Security of Electricity Supply," Energies, MDPI, vol. 15(23), pages 1-12, November.
    6. Nolting, Lars & Praktiknjo, Aaron, 2019. "Techno-economic analysis of flexible heat pump controls," Applied Energy, Elsevier, vol. 238(C), pages 1417-1433.
    7. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    8. Neda Hajibandeh & Miadreza Shafie-khah & Sobhan Badakhshan & Jamshid Aghaei & Sílvio J. P. S. Mariano & João P. S. Catalão, 2019. "Multi-Objective Market Clearing Model with an Autonomous Demand Response Scheme," Energies, MDPI, vol. 12(7), pages 1-16, April.
    9. Nolting, Lars & Praktiknjo, Aaron, 2020. "Can we phase-out all of them? Probabilistic assessments of security of electricity supply for the German case," Applied Energy, Elsevier, vol. 263(C).

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