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Reference Number NIA_ENWL010
Title Value of Lost Load to Customers
Status Completed
Energy Categories OTHER POWER and STORAGE TECHNOLOGIES(Electricity transmission and distribution) 100%;
Research Types Applied Research and Development 100%
Science and Technology Fields SOCIAL SCIENCES (Business and Management Studies) 25%;
ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 75%;
UKERC Cross Cutting Characterisation Sociological economical and environmental impact of energy (Consumer attitudes and behaviour) 100%
Principal Investigator Project Contact
No email address given
Electricity North West Limited
Award Type Network Innovation Allowance
Funding Source ENA Smarter Networks
Start Date 01 October 2015
End Date 01 February 2018
Duration 28 months
Total Grant Value £671,200
Industrial Sectors Power
Region North West
Programme Network Innovation Allowance
Investigators Principal Investigator Project Contact , Electricity North West Limited (100.000%)
Web Site
Objectives This research aims to quantify the value of dead load/ loss of supply to customers. This will be achieved by answering the following research objectives: 1. What is the impact on customers of lost load? 2. What is the value of this impact - financial and social costs to customers in £ per kw? 3. How does this vary by customer type, currently all customer types are treated uniformly? 4. How can Electricity North West and key stakeholders mitigate the costs of lost load to customers? 5. How will this vary with LCT adoption? The project success criteria are:; An understanding of customer impact, how value is defined and how this might be influenced (e.g. better communications); A credible segmentation and future VoLL model by key customer groups (curves) to guide investment decisions; A demonstration of how these values would help ENW to better plan their network investment strategy. ; Guidance on customer compensation strategies
Abstract Improving and/or maintaining reliability of supply to customers requires significant and continuous investment in distribution assets. Supply interruptions have financial and social impacts on customers, which vary by season, time of day, customer load and customer type. Research into the Value of Lost Load (VoLL) has previously been untaken however this resulted in a single uniform VoLL based on existing customer energy usage and assigned value. As GB decarbonises heat and transport customers will become reliant on electricity for new needs and hence it is likely that the VoLL will change. This future VoLL is important in informing issues such as network reliability standards, design policy for LCT intensive networks and service standards. In addition VoLL may have significantly different value for sub segments for the customer base, for example rural customers versus urban, worst served customers versus average etc. Understanding the VoLL by segment will be an important factor informing DNO policies and investments plans for ED2 and beyond. To facilitate a comprehensive understanding of VoLL over time and by customer segment, the Method will encompass three key stages of customer and stakeholder engagement. Phase one: Desk research to gain contextual understanding, comprehensively reviewing previous research on VoLL (including the London Economics survey conducted for VoLL and DECC). Reviews of published literature on the subject of VoLL primarily in GB but also abroad, and information available from GB DNOs on efforts to measure the VoLL. Formalisation of best methods of evaluative procedures among customers and optimal methods of VoLL calculations - proposed methodology document produced and peer reviewed. Meetings with key stakeholders (Ofgem, DECC, Citizens Advice Bureau) to outline proposed approach and obtain buy in. Finalisation of research questions that will be explored. Phase two: Qualitative research in the form of focus groups and in depth interviews with customer groups; including but not limited to Domestic customers; SMEs, (with a focus on industries heavily reliant on electricity); stakeholders e. g. hospitals, care homes, age UK etc. and customers. This research will explore:; How reliability and quality of supply is defined by customers; Explore how customers and businesses prepare, if at all, for faults; Differing expectations for planned versus unplanned faults; How different customer groups value reliability of electricity supply in different ways; The financial impact of lost loads (particularly to SME customers and service organisations); The social impact of lost loads (particularly to domestic customers); Expectations around communications and support during a supply interruption from Electricity North West and other stakeholders; Key attributes of a supply interruption such as frequency, duration, time of day, financial impact etc. that will determine the attributes and levels for scenario testing during the quantitative phase. ; How these views may change with decarbonisation of heat and transport These issues will be explored for groups of customers likely to have shared experiences (e. g. SMEs, worst served customers, vulnerable customers). Key stakeholders will be interviewed individually, to understand their unique position between Electricity North West and their customer base. Engaged customer panels (ECPs) will be formed for domestic and SMEs, given the complexity of the survey topic, to facilitate informed discussions. The main quantitative survey will be piloted in phase two, among the ECPs and a wider audience of Domestic and SMEs Phase three: Large scale robust quantitative survey amongst customers. This survey is designed to test the following hypotheses: 1. Does VoLL vary by customer segment and what are their relative value assignments? 2. How will VoLL vary with LCT adoption? 3. How would the level of incentives tested for demand side response in other LCNF trials compare to future VoLL? 4. Which segments would support a strong VoLL and hence potentially higher investment? The survey will include stated preference scenarios, where customers are asked to trade off varying levels of reliability of supply in exchange for a customer incentive (financial or otherwise). It is proposed that the worst served customers are key to this research, as these customers are the most likely to have experienced interruptions and thereby have a recent benchmark. The survey will be conducted over two fieldwork periods, one winter and one summer, to understand the variations in VoLL by season. The survey and associated analysis will quantify the VoLL, and produce curves for relevant customer groups that identify the optimal levels of investment.Note : Project Documents may be available via the ENA Smarter Networks Portal using the Website link above
Publications (none)
Final Report (none)
Added to Database 17/12/18