Costs of electric power outages to manufacturers

Technical Report · Tue Dec 01 04:00:00 EST 1981

OSTI ID:5459516

Devine, Jr, W D; Boyd, D A

This study estimates the total costs of electric power outages to a number of manufacturers in the Tennessee Valley Authority service region. The damage suffered by a firm during an outage decreases with the fraction of the plant's load that is served internally during the power interruptions, whereas the cost of mitigating this damage via standby generation increases. Total outage costs are the sum of damage and mitigation costs and are minimized with standby generation of a particular capacity. Outage damage is approximated from estimates of costs that might be incurred when various portions of a plant's load are curtailed according to previously prepared emergency load curtailment plans. Minimum total outage costs for the plants studied were found to range between $50,000 and $1.6 million per year per plant, depending on the plant and the nature of the outage. For a single 1-hour outage per year, the average cost was $286,000; for ten 3-hour outages per year the average cost was $734,000. Optimum standby generating capacity was generally greater than that presently in place, but in only one instance did it total as much as 12% of a plant's normal load. Firms respond to the prospect of outages with investments to ameliorate damage, and these investments increase as the potential damage increases. To date, however, this investment has been mostly for redundancy in electricity disribution systems.

• Research Organization: Oak Ridge Associated Universities, Inc., TN (USA)
• DOE Contract Number: AC05-76OR00033
• OSTI ID: 5459516
• Report Number(s): ORAU/IEA-81-9(M); ON: DE82010336
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
COST
ECONOMIC IMPACT
ELECTRIC POWER
ENERGY SYSTEMS
INDUSTRIAL PLANTS
NATIONAL ORGANIZATIONS
OUTAGES
POWER
POWER SYSTEMS
RELIABILITY
TENNESSEE VALLEY AUTHORITY
US ORGANIZATIONS