A Survey on Interruption Costs of Korean Industrial Customers

• Main Authors: Kee-young Nam, Sang-bong Choi, Hee-suk Ryoo, Seong-hwan Jeong, Jae-duck Lee, Dae-kyeong Kim
• Format: Conference Proceeding
• Language: English
• Subjects: Consumer electronics; Contracts; Costs; Economic forecasting; Electricity supply industry; Energy consumption; Environmental economics; Power generation economics; Power industry; Power system reliability
• ISSN: 2160-8555; 2160-8563
• DOI: 10.1109/TDC.2006.1668595

An approach is often used to estimate the reliability value to determine consumer's economic losses resulting from service interruptions. The quantitative estimation of interruption costs are important and meaningful work. Further the restructuring of the electric industries worldwide, most of the electric utilities and consumers have to consider the two important elements such as supply reliability and quality while calculating the related costs and the contract to sell or purchase electricity because it takes costs to keep the two elements at their higher level. Especially, the interruption or the supply reliability will have the influence on the bilateral contract between the suppliers and customers as a key point to determine the price of electric power in the competitive electric market. The increasing use of electrical and electronic machines day-by-day the electrical power supply system and the environment on the process of generation to consumption of electricity also are being changed. In other words both suppliers and consumers of electricity are required to be responsible for their interruption costs since the monetary losses are resulted from the service interruptions. This paper addresses the analysis of interruption costs and the studies made through the direct interview with Korean industrial customers for the period of two years. It is conducted to evaluate the direct and short duration interruption costs resulting from local random electrical supply interruptions. The cost is evaluated by providing a designed questionnaire focused on the experience or the preparative actions which consumers predicted they would take. In the first phase, authors made a survey on all types of industry with 176 industrial customers and evaluated them as per standard industry classification (SIC). In that case, the evaluation data obtained are not so reasonable, because the number of sampled industries was small and the sampled industries were surveyed by being divided into 18 types. So, in the second phase the authors concentrated on only 4 types of 302 industries who have many and large sensitive loads to the short duration interruption