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Estimating the economic impacts of power supply interruptions

Vinícius de Oliveira Botelho

Energy Economics, 2019, vol. 80, issue C, 983-994

Abstract: The cost of power system rationing, which is a crucial parameter for determining optimal resilience investments, is usually estimated using reduced-form linear models or ordinary input-output analysis. However, such methods do not properly address either consumers' rational reactions to rationing policy or policy design nonlinearities. To solve this problem, this paper estimates the effects of power system rationing using a general equilibrium model. The model solution shows that the power cut distribution among industries is a critical variable for quantifying policy effects and provides insights into optimal policy design.

Keywords: Power interruption costs; Energy policy evaluation; General equilibrium; Energy economics (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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DOI: 10.1016/j.eneco.2019.02.015

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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