Today I attended a talk whose speaker motivated his work by appealing to the cost of power outages. The figures he quoted were:
- Value of US energy, one year: \$400b (or 2% of GDP)
- Cost of outages in the US, one year: \$100b
Context
Understanding the Cost of Power Interruptions to U.S. Electricity Consumers is the first Google search result for “cost of power outage”. The authors of this paper develop a framework that accommmodates customer heteroegneity and vulnerability as well as frequency and type of outage events. Using this framework, the authors estimate the cost of power reliability issues in the US to be “about \$80 billion annually, based on the best information available in the public domain” (pg. i). Because it is difficult to obtain complete information or quantify the cost of a power quality issue, the authors admit that the costs could be below \$30 billion or more than \$130 billion. Perhaps more interesting than the dollar value is the breakdown.
One way to split up outage costs is by customer class. The figure shown, from pg. xii of the previously mentioned paper, does this. Outage costs are greatest for commercial customers, with residential losses negligible. As a former KFC employee, I can attest that power outages seriously damage commercial operations. So many wasted chickens…
Another way to break down outage costs is by type of outage. The aforementioned paper recognizes two types: momentary (less than 5 minutes) and sustained (5 minutes or more). Total annual outage costs are broken down according to outage type in the figure at left. Momentary interruptions are responsible for the majority of outage costs, but there are also many more momentary outages than sustained ones.