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The Value of Lost Load in Swedish Industry

| 2021:787 | Thomas Broberg, Runar Brännlund, Tommy Lundgren, Lars Persson
The main conclusion from this study is that the costs for the industry of supply interruptions are considerable, and seems to have increased over time, suggesting that the industry have become more vulnerable to supply disturbances.
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In 2016 the estimated cost of a one-hour outage for an average industrial facility in Sweden was approximately 23 times larger than the value of the electricity not delivered (SEK 9502 versus SEK 400), whereas the cost in 2004 was approximately 13 times the market value of the electricity not delivered.

These numbers should be interpreted with care since they assume that the interruption in production processes corresponds exactly to the duration of the outage, but also that the production losses during the outage are lost forever and cannot be compensated for in any way. The estimates complements previous studies based on stated preferences, and can be used practically in benefit-cost assessments of potential measures to mitigate risks of electricity supply interruptions.