Shadow Pricing of Electric Power Interruptions for Distribution System Operators in Finland

Sinan Küfeoğlu, Niyazi Gündüz, Hao Chen and Matti Lehtonen
Additional contact information
Niyazi Gündüz: Department of Electrical Engineering and Automation, Aalto University, Espoo 02150, Finland
Hao Chen: Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China
Matti Lehtonen: Department of Electrical Engineering and Automation, Aalto University, Espoo 02150, Finland

Energies, 2018, vol. 11, issue 7, 1-14

Abstract: Increasing distributed generation and intermittencies, along with the increasing frequency of extreme weather events, impose a serious challenge for electric power supply security. Understanding the costs of interruption is vital in terms of enhancing the power system infrastructure and planning the distribution grid. Furthermore, customer rights and demand response techniques are further reasons to study the worth of power reliability. In this paper, the authors make use of directional distance function and shadow pricing methods in a case study of Finland. The aim is to calculate the cost of one minute of power interruption from the perspective of the distribution network operator. The sample consists of 78 distribution network operators from Finland, and uses cost and network information between 2013 and 2015.

Keywords: power interruption; distribution system operator; interruption cost; shadow price (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Shadow Pricing of Electric Power Interruptions for Distribution System Operators in Finland (2018)
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