Economic repercussions of power outages for Swedish electrical distribution companies

Abstract: The Swedish distribution grid plays a crucial role in providing citizens of Sweden with electricity to power their regular life. Without power a lot of essential societal services malfunction. Therefore, it is of utmost importance that the power grid operates optimally. This report aims to examine the economic and political incentives from the perspective of distribution grid owners to maintain the operational integrity of the distribution grid, which is a topic lacking previous research. To conduct our research, data has been collected from Energimarknadsinspektionen (EI) regarding power outages throughout the last ten years. Information regarding mean electricity prices means general electricity consumption, and rules and directives regulating the Swedish power grid have been extracted from other reliable institutions and credible sources. This is done in order to develop a model that quantifies the total costs, generally for all distribution companies, associated with both long and short power outages. The findings made portrays that the distribution grid owners primarily are financially affected (on average/per year) by longer power outages (131.5 Msek), while the shorter outages have a minimal economical impact (13 Msek). Our findings also highlight that there are a lot of bureaucratic processes that slow down the implementation of new effective tools, aimed at creating a more reliable grid.