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An Estimate of the Value of Lost Load for Ireland

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  • Leahy, Eimear
  • Tol, Richard S. J.

Abstract

This paper estimates the value of short term lost load in the all island electricity market which includes the Republic of Ireland and Northern Ireland. The value of lost load, also known as the value of security of electricity supply, is inferred using a production function approach. Detailed electricity use data for the Republic of Ireland allows us to estimate the value of lost load by time of day, time of week and type of user. We find that the value of lost load is highest in the residential sector in both the Republic of Ireland and Northern Ireland. Our results can be used to advise policy decisions in the case of supply outages and to encourage optimum supply security. In the context of this study short term is taken to be a matter of hours rather than days or weeks.

Suggested Citation

  • Leahy, Eimear & Tol, Richard S. J., 2010. "An Estimate of the Value of Lost Load for Ireland," Papers WP357, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp357
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    References listed on IDEAS

    as
    1. Malaguzzi Valeri, Laura & Tol, Richard S. J., 2006. "Electricity Shortages in Ireland: Probability and Consequences," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2006(4-Winter), pages 1-7.
    2. Lyons, Sean & FitzGerald, John & McCarthy, Niamh & Malaguzzi Valeri, Laura & Tol, Richard S. J., 2007. "Preserving Electricity Market Efficiency While Closing Ireland's Capacity Gap," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2007(3-Autumn), pages 62-82.
    3. Zephyr, 2010. "The city," City, Taylor & Francis Journals, vol. 14(1-2), pages 154-155, February.
    4. Frances Ruane & Xiaoheng Zhang, 2007. "Location Choices of the Pharmaceutical Industry in Europe after 1992," The Institute for International Integration Studies Discussion Paper Series iiisdp220, IIIS.
    5. de Nooij, Michiel & Koopmans, Carl & Bijvoet, Carlijn, 2007. "The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks," Energy Economics, Elsevier, vol. 29(2), pages 277-295, March.
    6. Beenstock, Michael & Goldin, Ephraim & Haitovsky, Yoel, 1998. "Response bias in a conjoint analysis of power outages," Energy Economics, Elsevier, vol. 20(2), pages 135-156, April.
    7. Richard S.J. Tol, 2007. "The Value of Lost Load," Papers WP214, Economic and Social Research Institute (ESRI).
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    Keywords

    Ireland/value of lost load/electricity/Republic of Ireland/data/US/Policy;

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