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Open Access Publications from the University of California

A hybrid approach to estimating the economic value of power system resilience


The costs that power interruptions impose on customers and society have emerged as essential considerations for decision-making about power system reliability and resilience. While the direct costs of localized and relatively short-duration power interruptions are well-understood, little is known about the full impact of widespread and long-duration power interruptions, especially the indirect costs and related economy-wide impacts of these events. As a result, the costs of widespread and long-duration power interruptions are generally not or only incompletely considered in utility planning activities. This paper describes a new approach for estimating the economic costs of widespread and long-duration power interruptions. This method involves using survey responses from utility customers to calibrate a regional economic model that can 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 on grid-hardening strategies and other capital-intensive investments in electricity sector resilience.

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