Assessing the socio-economic effects of power outages ad hoc: An application of BLACKOUT-SIMULATOR.com covering 266 European regions, 9 economic sectors and households separately

This contribution presents the methodology and the application possibilities of blackout-simulator.com, a recent software development for the ad-hoc simulation of user specified power outages in Europe. This tool draws upon a novel econometric modeling approach including businesses’ production data as well as data from a willingness-to-pay (WTP) survey covering more than 8300 households. Making use of these inputs, blackout-simulator.com allows elaborated economic assessments of the value of electricity supply security. Households’ WTP to avoid power outages is elicited via a stated preference (SP) approach. Power outages at any user-defined time and duration in all of the European countries (at the NUTS II specification level) can be assessed for durations from 1 to 48 hours. Such analyses can serve as essential inputs especially in the discussions on necessary investments for maintaining and upgrading transmission and distribution infrastructures. This tool thus provides a rationale for electricity supply security enhancing investments and energy policy decisions. Illustrating the capabilities of blackout-simulator.com, the blackout of September 28th 2003 in Italy, is assessed in this contribution. Damages to society are found to exceed 1.15 billion Euros, which corresponds to almost 0.1 percent of the annual Italian GDP.