Value of Lost Load - Review

Description

The Value of Lost Load (VOLL) puts an economic value on an amount of electricity that people plan to consume, but do not receive because of an outage or interruption. The current VOLL is set in Schedule 12.2 of the EIPC (Electricity Industry Participation Code) at $20,000/MWh, and was set in 2005. Because of changes since that time (inflation, and new technology) this figure may no longer be fit-for-purpose. The Electricity Authority seeks to understand the technical capability of qualified economic and energy-sector consultancies to undertake an economic study of the Value of Lost Load (VOLL). The main deliverable of any study to be commissioned by the Authority in future will be an updated set of VOLL figures. These new figures should address our concerns that: 1) The current $20,000/MWh figure is out-of-date, and 2) A single average value for the entire country is unrealistic.