The Value of Lost Load (VoLL) in Iran: Lost Production & Lost Leisure

Document Type : Research Paper

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Abstract

Reductions in the number of power outages are possible, but they are often very costly. On the other hand, reduction of power outages decreases the welfare costs of customers. This paper studies the Value of Lost Load (VoLL) in order to determine the socially optimal level of reliability. The costs of outages are estimated for Iranian customers in terms of lost production of firms and lost leisure time of households. The results show that, for Iranians as a whole, the average damage per unit of electricity not delivered due to an interruption is 38378 Rials/kwh. Moreover, large differences in damage are found between sectors, and the welfare losses of households (lost leisure) are as important as the lost value added in firms.

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References

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