Using Insurance to Manage Reliability in the Distributed Electricity Sector: Insights From an Agent-Based Model

Rolando Fuentes and Abhijit Sengupta

Discussion Papers from King Abdullah Petroleum Studies and Research Center

Abstract: Our results suggest that consumers would transfer some of the inherent risks of a blackout to the utility for a price lower than their willingness to pay to achieve their desired level of protection, creating economic value. The purchase of insurance would help most consumers avoid a complete loss of power. Our simulations show that of those households that would otherwise experience a complete loss of power, on average between 1% and 15% can fully cover their excess energy needs through insurance. Between 50% and 70% of these households are budget constrained but would still be able to partially cover their excess energy needs.

Keywords: Agent based models; Distributed energy resources; New business models in electricity; Reliability Insurance; Utility death spiral (search for similar items in EconPapers)
Pages: 39
Date: 2019-07-21
New Economics Papers: this item is included in nep-cmp, nep-ene and nep-ias
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Citations: View citations in EconPapers (1)

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https://www.kapsarc.org/research/publications/gas- ... nd-power-generation/ First version, 2019 (application/pdf)

Related works:
Journal Article: Using insurance to manage reliability in the distributed electricity sector: Insights from an agent-based model (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:prc:dpaper:ks--2019-dp59

DOI: 10.30573/KS-2019-DP59

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