Pair of New Berkeley Lab Reports Explore the Economic Impacts of Widespread, Long Duration Power Interruptions

February 23, 2021

A number of widespread, long duration (WLD) power interruptions have recently occurred in the United States—most notably in Texas, Oregon, California, and Puerto Rico. Berkeley Lab is pleased to announce the release of a pair of new reports that explore the economic impacts of these types of events.  ]

Although a number of studies have examined the physical and engineering impacts of extreme weather and other precipitating events on the bulk power system, decision makers evaluating investments in preventive strategies need information on how utilities and their regulators are considering the costs of past power interruptions and the benefits of preventing them in the future in decisions to improve utility reliability and resilience. The first paper titled Case Studies of the Economic Impacts of Power Interruptions and Damage to Electricity System Infrastructure from Extreme Events discusses six case studies that detail the economics, at the level of the utility service territory, of power interruptions caused by extreme weather and lasting from a few days to several weeks.

Little is known about the full impact of WLD power interruptions, especially the indirect costs and related economy-wide impacts of these events. As a result, the costs of WLD power interruptions are generally not or only incompletely considered in utility planning activities. The second paper titled A Hybrid Approach to Estimating the Economic Value of Enhanced Power System Resilience describes a new approach for estimating the economic costs of WLD power interruptions. This hybrid method involves using survey responses from utility customers to calibrate a regional economic model that is able to estimate both the direct and indirect costs of these events. Including better estimates of these costs will enhance both the comprehensiveness and completeness of the considerations relied on to support utility planning decisions, especially those on grid-hardening strategies and other capital-intensive investments in electricity sector resilience.

Please contact Peter Larsen (510-486-5015, PHLarsen@lbl.gov) if you have questions or comments on either report. The team of authors wish to acknowledge the ongoing support of the U.S. Department of Energy’s Office of Electricity, Energy Resilience Division for making this research possible.

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