DA von W. Ineichen, 2007

Titel

An investment management system for conductor assets in the electricity industry considering customer power interruption costs

Betreuung

Prof. Dr. Wolfgang Kröger

Jürg Birchmeier

Markus Schläpfer

Zusammenarbeit

CKW, Dr. J. Müller

EKZ, B. Lamprecht

EWZ, J. Bader

Swiss Re, F. Trepp

Abgabe

Oktober 2007

Abstract

The electricity industry in Switzerland has to comply with the large-scale changes associated with the liberalisation process. The originally vertically structured electric utilities are split up according to the four main steps of the value chain of elecricity: generation, transmission, distribution, and retail of electric power. International experience shows that open markets provide higher resource efficiency due to total competitiveness leading to a certain electricity price decrease while posing considerable challenges to electric utilities in terms of their risk management and communication systems during the reforming phase in particular and being associated with a certain tendency fo more frequent and more widespread blackouts. In the European electricity market Switzerland is one of the last countries not to have started yet complete liberalisation.

First, a financial quantification of customer electricity outage costs based on real supply interruption databases and state-of-the-art monetarisation methodologies for three Swiss electric utilities is performed. Subsequently, cause-, conductor-, company-, and incident-size-distribution-specific analyses are conducted and an extrapolation approach for macro-economic costomer interruption costs for Switzerland is developed. The results give a general overview of the economic damage in Switzerland due to electricity supply interruptions.

Second, an investment management system is presented, with the help of which the optimal replacement speed for the estimated 10'500 km of overhead lines remaining in the medium voltage level can be determined. The system considers the influence of different parameters, such as base underground cable price, market underground cable price elasticity, mortgage interest rates, overhead line price, and maintenance and customer interruption costs. Macro-economic as well as micro-economic aspects are considered.