IDEAS home Printed from https://ideas.repec.org/a/nat/natcom/v16y2025i1d10.1038_s41467-025-58537-4.html
   My bibliography  Save this article

A Method to estimate the economy-wide consequences of widespread, long duration electric power interruptions

Author

Listed:
  • Ian Sue Wing

    (Boston University)

  • Peter H. Larsen

    (Lawrence Berkeley National Laboratory)

  • Juan Pablo Carvallo

    (Lawrence Berkeley National Laboratory)

  • Alan Sanstad

    (Lawrence Berkeley National Laboratory)

  • Dan Wei

    (University of Southern California)

  • Adam Rose

    (University of Southern California)

  • Sunhee Baik

    (Lawrence Berkeley National Laboratory)

  • Jeremy Smith

    (California Energy Commission)

  • Christopher Ramee

    (Resource Innovations Inc.)

  • Ridge Peterson

    (Resource Innovations Inc.)

Abstract

We partnered with a utility in the U.S. state of Illinois to develop and pilot an approach to estimate the economic impacts of widespread, long duration (WLD) power interruptions. We surveyed their customers about hypothetical blackouts, identifying and classifying mitigating/resilience behaviors and quantifying their costs and benefits. Survey results are scaled up to the broader regional economy, and used to drive a computational general equilibrium (CGE) simulation of the effects of power interruptions and attendant customer responses (e.g., relocation, backup generation). Impacts are severe: 1-, 3-, and 14-day interruptions reduce the utility service area’s three-month GDP by $1.8 Bn (1.3%), $3.7 Bn (2.6%) and $15.2 Bn (10.4%), respectively, with losses driven overwhelmingly by disequilibrium responses to shortages as opposed to price signals (71%–88%). Doubling backup power penetration moderates GDP losses by 11%–14%, and is relatively least beneficial during the longest interruption duration. Results highlight previously unquantified economic losses that can potentially be avoided by investments in power system resilience.

Suggested Citation

  • Ian Sue Wing & Peter H. Larsen & Juan Pablo Carvallo & Alan Sanstad & Dan Wei & Adam Rose & Sunhee Baik & Jeremy Smith & Christopher Ramee & Ridge Peterson, 2025. "A Method to estimate the economy-wide consequences of widespread, long duration electric power interruptions," Nature Communications, Nature, vol. 16(1), pages 1-13, December.
    • Handle: RePEc:nat:natcom:v:16:y:2025:i:1:d:10.1038_s41467-025-58537-4
    DOI: 10.1038/s41467-025-58537-4
    as

    Download full text from publisher

    File URL: https://www.nature.com/articles/s41467-025-58537-4
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1038/s41467-025-58537-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sue Wing, Ian & Rose, Adam Z., 2020. "Economic consequence analysis of electric power infrastructure disruptions: General equilibrium approaches," Energy Economics, Elsevier, vol. 89(C).
    2. Adam Rose & Shu‐Yi Liao, 2005. "Modeling Regional Economic Resilience to Disasters: A Computable General Equilibrium Analysis of Water Service Disruptions," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 75-112, February.
    3. Sunhee Baik & Alexander L. Davis & Jun Woo Park & Selin Sirinterlikci & M. Granger Morgan, 2020. "Estimating what US residential customers are willing to pay for resilience to large electricity outages of long duration," Nature Energy, Nature, vol. 5(3), pages 250-258, March.
    4. Adam Rose & Gbadebo Oladosu & Shu‐Yi Liao, 2007. "Business Interruption Impacts of a Terrorist Attack on the Electric Power System of Los Angeles: Customer Resilience to a Total Blackout," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 513-531, June.
    5. Marco Casari & Simon Wilkie, 2005. "Sequencing Lifeline Repairs After an Earthquake: An Economic Approach," Journal of Regulatory Economics, Springer, vol. 27(1), pages 47-65, September.
    6. Dormady, Noah C. & Rose, Adam & Roa-Henriquez, Alfredo & Morin, C. Blain, 2022. "The cost-effectiveness of economic resilience," International Journal of Production Economics, Elsevier, vol. 244(C).
    7. Thomas, Douglas & Fung, Juan, 2022. "Measuring downstream supply chain losses due to power disturbances," Energy Economics, Elsevier, vol. 114(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matteo Coronese & Davide Luzzati, 2022. "Economic impacts of natural hazards and complexity science: a critical review," LEM Papers Series 2022/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Stéphane Hallegatte, 2014. "Modeling the Role of Inventories and Heterogeneity in the Assessment of the Economic Costs of Natural Disasters," Risk Analysis, John Wiley & Sons, vol. 34(1), pages 152-167, January.
    3. Liu, Huan & Tatano, Hirokazu & Pflug, Georg & Hochrainer-Stigler, Stefan, 2021. "Post-disaster recovery in industrial sectors: A Markov process analysis of multiple lifeline disruptions," Reliability Engineering and System Safety, Elsevier, vol. 206(C).
    4. Hallegatte, Stephane, 2012. "Modeling the roles of heterogeneity, substitution, and inventories in the assessment of natural disaster economic costs," Policy Research Working Paper Series 6047, The World Bank.
    5. Zhang, Chonghui & Wang, Zhen & Su, Weihua & Dalia, Streimikiene, 2024. "Differentiated power rationing or seasonal power price? Optimal power allocation solution for Chinese industrial enterprises based on the CSW-DEA model," Applied Energy, Elsevier, vol. 353(PB).
    6. Martina Linnenluecke & Andrew Griffiths, 2012. "Assessing organizational resilience to climate and weather extremes: complexities and methodological pathways," Climatic Change, Springer, vol. 113(3), pages 933-947, August.
    7. Wei Xie & Qi Cui & Tariq Ali, 2019. "Role of market agents in mitigating the climate change effects on food economy," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(3), pages 1215-1231, December.
    8. Sue Wing, Ian & Rose, Adam Z., 2020. "Economic consequence analysis of electric power infrastructure disruptions: General equilibrium approaches," Energy Economics, Elsevier, vol. 89(C).
    9. Wei Xie & Adam Rose & Shantong Li & Jianwu He & Ning Li & Tariq Ali, 2018. "Dynamic Economic Resilience and Economic Recovery from Disasters: A Quantitative Assessment," Risk Analysis, John Wiley & Sons, vol. 38(6), pages 1306-1318, June.
    10. J. A. León & M. Ordaz & E. Haddad & I. F. Araújo, 2022. "Risk caused by the propagation of earthquake losses through the economy," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    11. Henriet, Fanny & Hallegatte, Stephane, 2008. "Assessing the Consequences of Natural Disasters on Production Networks: A Disaggregated Approach," Coalition Theory Network Working Papers 46657, Fondazione Eni Enrico Mattei (FEEM).
    12. Adam Rose & Charles K. Huyck, 2016. "Improving Catastrophe Modeling for Business Interruption Insurance Needs," Risk Analysis, John Wiley & Sons, vol. 36(10), pages 1896-1915, October.
    13. Meri Davlasheridze & Kayode O. Atoba & Samuel Brody & Wesley Highfield & William Merrell & Bruce Ebersole & Adam Purdue & Robert W. Gilmer, 2019. "Economic impacts of storm surge and the cost-benefit analysis of a coastal spine as the surge mitigation strategy in Houston-Galveston area in the USA," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 24(3), pages 329-354, March.
    14. Walmsley, Terrie & Rose, Adam & John, Richard & Wei, Dan & Hlávka, Jakub P. & Machado, Juan & Byrd, Katie, 2023. "Macroeconomic consequences of the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 120(C).
    15. Shahnawaz Rafi & Sisi Meng & Joost Santos & Pallab Mozumder, 2024. "Extreme Weather Events and the Performance of Critical Utility Infrastructures: A Case Study of Hurricane Harvey," Economics of Disasters and Climate Change, Springer, vol. 8(1), pages 33-60, March.
    16. Chen, Hao & Yan, Haobo & Gong, Kai & Geng, Haopeng & Yuan, Xiao-Chen, 2022. "Assessing the business interruption costs from power outages in China," Energy Economics, Elsevier, vol. 105(C).
    17. Xiaolong Xue & Liang Wang & Rebecca J. Yang, 2018. "Exploring the science of resilience: critical review and bibliometric analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 90(1), pages 477-510, January.
    18. Michael Greenberg & Charles Haas & Anthony Cox & Karen Lowrie & Katherine McComas & Warner North, 2012. "Ten Most Important Accomplishments in Risk Analysis, 1980–2010," Risk Analysis, John Wiley & Sons, vol. 32(5), pages 771-781, May.
    19. Jason Nassios & James A. Giesecke, 2018. "Informing Ex Ante Event Studies with Macro‐Econometric Evidence on the Structural and Policy Impacts of Terrorism," Risk Analysis, John Wiley & Sons, vol. 38(4), pages 804-825, April.
    20. Fynnwin Prager & Dan Wei & Adam Rose, 2017. "Total Economic Consequences of an Influenza Outbreak in the United States," Risk Analysis, John Wiley & Sons, vol. 37(1), pages 4-19, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nat:natcom:v:16:y:2025:i:1:d:10.1038_s41467-025-58537-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.nature.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.