ESTIMATING VALUE OF LOST LOAD FOR BUSINESS AND INDUSTRIAL CUSTOMERS IN INDONESIA USING STATED PREFERENCES METHODS

• Main Author: Putra Bahari, Rachmad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/86923
• Institution: Institut Teknologi Bandung

The Value of Lost Load (VOLL) is a crucial metric for quantifying the economic impact of electricity supply disruptions. This study estimates VOLL for industrial and business customers in Indonesia using stated preference methods, specifically Willingness to Accept (WTA) and Willingness to Pay (WTP). The analysis reveals a significant difference between WTA and WTP, with a Mean WTA of IDR 9,697/kWh and a Mean WTP of IDR 4,068/kWh. This highlights behavioral factors such as loss aversion, where customers demand higher compensation for outages than they are willing to pay to avoid them. The research demonstrates the applicability of WTA and WTP for distinct policy objectives. WTA is ideal for designing penalty frameworks for Independent Power Producers (IPPs) and compensation mechanisms that account for the economic losses experienced by customers. Meanwhile, WTP is more suited for tariff adjustments or additional charges to fund reliability improvements, balancing affordability with customer satisfaction. This study contributes to the development of a VOLL estimation framework tailored to Indonesia, offering actionable insights for electricity policy, infrastructure planning, and system reliability enhancement. The findings aim to support policymakers and utility providers in aligning customer expectations with operational goals and advancing national energy strategies.