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The costs of electricity interruptions in Spain. Are we sending the right signals?

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  • Pedro Linares

    (Universidad Ponticia de Comillas, MR-CBG Harvard Kennedy School and Economics for Energy)

  • Luis Rey

    (Rede (Universidade de Vigo) and Economics for Energy)

Abstract

One of the objectives of energy security is the uninterrupted physical availability of energy. However, there is limited information about how much is the cost of energy supply interruptions. This information is essential to optimize investment and operating decisions to prevent energy shortages. In this paper, we estimate the economic impact of an electricity interruption in diferent sectors and regions of Spain. We find that in 2008 the cost for the Spanish economy of one kWh of electricity not supplied was around e6, which is much higher than the signals sent for the operation of the power system. This would mean that we are underinvesting in short-term energy security.

Suggested Citation

  • Pedro Linares & Luis Rey, 2012. "The costs of electricity interruptions in Spain. Are we sending the right signals?," Working Papers fa05-2012, Economics for Energy.
    • Handle: RePEc:efe:wpaper:fa05-2012
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy security; electricity interruptions; value of lost load; Spain;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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