IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v76y2014icp82-90.html
   My bibliography  Save this article

Stated preferences based estimation of power interruption costs in private households: An example from Germany

Author

Listed:
  • Praktiknjo, Aaron J.

Abstract

Concerns regarding supply security are increasingly raised in reaction to the transition of the German energy system toward a renewable and nuclear-free system called “Energiewende”. The goal of this work is to contribute to a measurability of supply security by quantifying the consequences of power interruptions monetarily. The focus lies within the investigation of power interruption costs in private households. An online survey with 859 participants in 2011 is used to gather the necessary data. Based on this data, a two-staged bottom-up regression model was estimated to describe interruption costs for durations of 15 min, 1 h, 4 h, 1 day and 4 days. Finally, micro-data from 55,000 households were used to perform Monte Carlo simulations to increase the representativeness of the estimations. The frequency distributions of the estimated interruption costs indicate potentials for load-shedding measures. Such measures could be an economically viable contribution to a successful integration of large shares of renewable fluctuating generation like wind or solar power.

Suggested Citation

  • Praktiknjo, Aaron J., 2014. "Stated preferences based estimation of power interruption costs in private households: An example from Germany," Energy, Elsevier, vol. 76(C), pages 82-90.
    • Handle: RePEc:eee:energy:v:76:y:2014:i:c:p:82-90
    DOI: 10.1016/j.energy.2014.03.089
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544214003533
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2014.03.089?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, January.
    2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, September.
    3. Thayer, Mark A., 1981. "Contingent valuation techniques for assessing environmental impacts: Further evidence," Journal of Environmental Economics and Management, Elsevier, vol. 8(1), pages 27-44, March.
    4. Johansson, Bengt, 2013. "Security aspects of future renewable energy systems–A short overview," Energy, Elsevier, vol. 61(C), pages 598-605.
    5. John Walsh, 1959. "Large sample nonparametric rejection of outlying observations," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 10(3), pages 223-232, September.
    6. LaCommare, Kristina Hamachi & Eto, Joseph H., 2006. "Cost of power interruptions to electricity consumers in the United States (US)," Energy, Elsevier, vol. 31(12), pages 1845-1855.
    7. Baarsma, Barbara E. & Hop, J. Peter, 2009. "Pricing power outages in the Netherlands," Energy, Elsevier, vol. 34(9), pages 1378-1386.
    8. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-647, June.
    9. Praktiknjo, Aaron J. & Hähnel, Alexander & Erdmann, Georg, 2011. "Assessing energy supply security: Outage costs in private households," Energy Policy, Elsevier, vol. 39(12), pages 7825-7833.
    10. Sezgen, Osman & Goldman, C.A. & Krishnarao, P., 2007. "Option value of electricity demand response," Energy, Elsevier, vol. 32(2), pages 108-119.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Frondel, Manuel & Sommer, Stephan & Tomberg, Lukas, 2019. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 68(1), pages 53-73.
    2. Becker, Sophia & Schober, Dominik & Wassermann, Sandra, 2016. "How to approach consumers’ nonmonetary evaluation of electricity supply security? The case of Germany from a multidisciplinary perspective," Utilities Policy, Elsevier, vol. 42(C), pages 74-84.
    3. Macmillan, Madeline & Murphy, Caitlin A. & Bazilian, Morgan D., 2022. "Exploring acute weather resilience: Meeting resilience and renewable goals," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    4. Manuel Frondel & Stephan Sommer & Lukas Tomberg, 2021. "WTA-WTP Disparity: The Role of Perceived Realism of the Valuation Setting," Land Economics, University of Wisconsin Press, vol. 97(1), pages 196-206.
    5. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    6. Madia Safdar & Ghulam Amjad Hussain & Matti Lehtonen, 2019. "Costs of Demand Response from Residential Customers’ Perspective," Energies, MDPI, vol. 12(9), pages 1-16, April.
    7. Frondel Manuel & Sommer Stephan, 2017. "Der Wert von Versorgungssicherheit mit Strom: Evidenz für deutsche Haushalte," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 66(3), pages 294-317, December.
    8. Menegaki, Angeliki, N. & Olsen, Søren Bøye & Tsagarakis, Konstantinos P., 2016. "Towards a common standard – A reporting checklist for web-based stated preference valuation surveys and a critique for mode surveys," Journal of choice modelling, Elsevier, vol. 18(C), pages 18-50.
    9. Ladenburg, Jacob & Skotte, Maria, 2022. "Heterogeneity in willingness to pay for the location of offshore wind power development: An application of the willingness to pay space model," Energy, Elsevier, vol. 241(C).
    10. Amoah, Anthony & Ferrini, Silvia & Schaafsma, Marije, 2019. "Electricity outages in Ghana: Are contingent valuation estimates valid?," Energy Policy, Elsevier, vol. 135(C).
    11. Jin, Taeyoung & Lee, Tae Eui & Kim, Dowon, 2024. "Valuing flexible resources in the Korean electricity market based on stated preference methods," Utilities Policy, Elsevier, vol. 88(C).
    12. Nkosi, Nomsa Phindile & Dikgang, Johane, 2018. "Pricing electricity blackouts among South African households," Journal of Commodity Markets, Elsevier, vol. 11(C), pages 37-47.
    13. Christina Kockel & Lars Nolting & Kevin Pacco & Carlo Schmitt & Albert Moser & Aaron Praktiknjo, 2022. "How Dependent Are European Power Systems and Economies on Natural Gas?—A Macroeconomic Optimization for Security of Electricity Supply," Energies, MDPI, vol. 15(23), pages 1-12, November.
    14. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    15. Frondel Manuel & Sommer Stephan & Tomberg Lukas, 2019. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 68(1), pages 53-73, May.
    16. Nolting, Lars & Praktiknjo, Aaron, 2020. "Can we phase-out all of them? Probabilistic assessments of security of electricity supply for the German case," Applied Energy, Elsevier, vol. 263(C).
    17. Mark Tocock & Dugald Tinch & Darla Hatton MacDonald & John M. Rose, 2023. "Managing the energy trilemma of reliability, affordability and renewables: Assessing consumer demands with discrete choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(2), pages 155-175, April.
    18. David Huckebrink & Valentin Bertsch, 2021. "Integrating Behavioural Aspects in Energy System Modelling—A Review," Energies, MDPI, vol. 14(15), pages 1-26, July.
    19. Jin, Taeyoung & Lee, Tae Eui & Kim, Dowon, 2023. "Value of lost load estimation for the South Korea's manufacturing sector—finding the gap between the supply and demand side," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    20. Charlotte Senkpiel & Audrey Dobbins & Christina Kockel & Jan Steinbach & Ulrich Fahl & Farina Wille & Joachim Globisch & Sandra Wassermann & Bert Droste-Franke & Wolfgang Hauser & Claudia Hofer & Lars, 2020. "Integrating Methods and Empirical Findings from Social and Behavioural Sciences into Energy System Models—Motivation and Possible Approaches," Energies, MDPI, vol. 13(18), pages 1-30, September.

    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. Amoah, Anthony & Ferrini, Silvia & Schaafsma, Marije, 2019. "Electricity outages in Ghana: Are contingent valuation estimates valid?," Energy Policy, Elsevier, vol. 135(C).
    2. Chen, Hao & Chen, Xi & Niu, Jinye & Xiang, Mengyu & He, Weijun & Küfeoğlu, Sinan, 2021. "Estimating the marginal cost of reducing power outage durations in China: A parametric distance function approach," Energy Policy, Elsevier, vol. 155(C).
    3. Morrissey, Karyn & Plater, Andrew & Dean, Mary, 2018. "The cost of electric power outages in the residential sector: A willingness to pay approach," Applied Energy, Elsevier, vol. 212(C), pages 141-150.
    4. Jin, Taeyoung & Lee, Tae Eui & Kim, Dowon, 2024. "Valuing flexible resources in the Korean electricity market based on stated preference methods," Utilities Policy, Elsevier, vol. 88(C).
    5. Richard T. Carson & Miko_aj Czajkowski, 2014. "The discrete choice experiment approach to environmental contingent valuation," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 9, pages 202-235, Edward Elgar Publishing.
    6. Gevrek, Z.Eylem & Uyduranoglu, Ayse, 2015. "Public preferences for carbon tax attributes," Ecological Economics, Elsevier, vol. 118(C), pages 186-197.
    7. Dieckhoener, Caroline & Hecking, Harald, 2012. "Greenhouse Gas Abatement Cost Curves of the Residential Heating Market – a Microeconomic Approach," EWI Working Papers 2012-16, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    8. Alberini, Anna & Ščasný, Milan & Bigano, Andrea, 2018. "Policy- v. individual heterogeneity in the benefits of climate change mitigation: Evidence from a stated-preference survey," Energy Policy, Elsevier, vol. 121(C), pages 565-575.
    9. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    10. Woo, C.K. & Ho, T. & Shiu, A. & Cheng, Y.S. & Horowitz, I. & Wang, J., 2014. "Residential outage cost estimation: Hong Kong," Energy Policy, Elsevier, vol. 72(C), pages 204-210.
    11. Shin, Jungwoo & Woo, JongRoul & Huh, Sung-Yoon & Lee, Jongsu & Jeong, Gicheol, 2014. "Analyzing public preferences and increasing acceptability for the Renewable Portfolio Standard in Korea," Energy Economics, Elsevier, vol. 42(C), pages 17-26.
    12. Bergtold, Jason S. & Ramsey, Steven M., 2015. "Neural Network Estimators of Binary Choice Processes: Estimation, Marginal Effects and WTP," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205649, Agricultural and Applied Economics Association.
    13. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    14. Moritz A. Drupp, 2018. "Limits to Substitution Between Ecosystem Services and Manufactured Goods and Implications for Social Discounting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 135-158, January.
    15. Huh, Sung-Yoon & Lee, Hyejin & Shin, Jungwoo & Lee, Donghyun & Jang, Jinyoung, 2018. "Inter-fuel substitution path analysis of the korea cement industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 4091-4099.
    16. Z. Eylem Gevrek & Ayse Uyduranoglu, 2015. "Public Preferences for Carbon Tax Attributes," Working Paper Series of the Department of Economics, University of Konstanz 2015-15, Department of Economics, University of Konstanz.
    17. Christian Growitsch & Raimund Malischek & Sebastian Nick & Heike Wetzel, 2015. "The Costs of Power Interruptions in Germany: A Regional and Sectoral Analysis," German Economic Review, Verein für Socialpolitik, vol. 16(3), pages 307-323, August.
    18. Alberini, Anna & Bigano, Andrea & Ščasný, Milan & Zvěřinová, Iva, 2018. "Preferences for Energy Efficiency vs. Renewables: What Is the Willingness to Pay to Reduce CO2 Emissions?," Ecological Economics, Elsevier, vol. 144(C), pages 171-185.
    19. Wendong Zhang & Brent Sohngen, 2018. "Do U.S. Anglers Care about Harmful Algal Blooms? A Discrete Choice Experiment of Lake Erie Recreational Anglers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 868-888.
    20. Westerberg, Vanja & Jacobsen, Jette Bredahl & Lifran, Robert, 2013. "The case for offshore wind farms, artificial reefs and sustainable tourism in the French mediterranean," Tourism Management, Elsevier, vol. 34(C), pages 172-183.

    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:eee:energy:v:76:y:2014:i:c:p:82-90. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    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.