Damage and Loss Assessment

The Electrical Sector

J. Roberto Jovel

2 Aug 08 RJovel 2

Contents

1. Disasters and the electrical sector: types of effects

2. Cases of lower production, sales and revenues of electricity

3. Procedures for the assessment of losses

4. Information requirements and sources of information

DISASTERS AND THE ELECTRICAL SECTOR

2 Aug 08 RJovel 4

Types of Disaster Effects

The electrical sector, as all other essential service or lifeline, is affected by disasters of all kinds

Following a disaster, it sustains damage to its physical assets– Power plants– Transmission lines and substations– Distribution grids

In addition, losses occur into the sector´s economic flows- Lower production and revenues- Higher operational costs- Unexpected expenses to meet temporary requirements

2 Aug 08 RJovel 5

Comments on Damage

The assessment should contain a breakdown of damage in each of the components or subsystems of the electrical sector, – Power generation plants– Transmission subsystems– Distribution grids

And an indication of the most realistic time period required for each component to return to pre-disaster conditions and capacity, taking into consideration the availability of required spare parts and equipment and of financing

The assessment of damage is done by civil or electrical engineers

2 Aug 08 RJovel 6

Comments on Losses

In the electrical sector losses occur until:– Full capacity and supply has been re-established in

all system components (internal constraint), or– Consumer demand (In all sectors) has been restored

to pre-disaster levels (external constraint)(Examples of each case will be discussed in following

slides)Therefore, the estimation of the period of recovery in

each case – based on the best information available at the time of the assessment – is of special relevance

The assessment of losses is a more difficult and complex task than that of estimating damage, and requires the cooperative participation of civil and electrical engineers as well as economists

2 Aug 08 RJovel 7

Cases of Lower Revenues in The Electrical Sector

Case 1: Damage to Electrical System Components Only

-1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 180

20

40

60

80

100

120

140

Demand Supply

Time After Disaster, months

De

ma

nd

an

d S

up

ply

of

Ele

ctr

icit

y, M

illio

n K

Wh

/mo

nth

Losses in sales of

electricity

Repairs

Case 2. Destruction of City without damage to Electrical Sector

-1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 180

20

40

60

80

100

120

140

Before disaster After disaster

Months after Disaster

De

ma

nd

of

Ele

ctr

icit

y, m

illio

n K

Wk

pe

r m

on

th

City Reconstruction

Losses in sales of

electricity

2 Aug 08 RJovel 10

Cases of Higher Operational Costs

Higher operational costs may be incurred into when– A damaged power plant must be substituted by

another one that has higher unit operational costs (Hydro versus thermal)

– Power and energy must be imported from another nearby system at prices that are higher than the damaged system´s own production costs

– Overtime payment of personnel and related increased costs are incurred for the immediate rehabilitation stage following the disaster, to re-establish service

2 Aug 08 RJovel 11

Procedure for the Assessment of LossesIn the Electrical Sector

2 Aug 08 RJovel 12

Step 1. Analyze sector performance prospects under normal conditions

• The electricity company normally has projections of performance of the electrical sector system components for the current year

• Should those projections not be available for some reason, or when the analysis must cover smaller geographical areas, the electrical specialist undertaking the assessment should develop such expected performance, including inter alia– Overall or consumer sector historical sales, by

volume and value– Expected rate of growth of demand

2 Aug 08 RJovel 13

Step 2. Projection of post-disaster electricity demand

Since recovery of total electricity demand depends on the speed of reconstruction of damaged assets in all consumer-sectors (industrial, agriculture, residential, etc), the electrical sector specialist must work in close cooperation and coordination with specialists of these other sectors

A demand/supply recovery curve is to be developed on the basis of such close consultation and coordination, taking special care to be as realistic as possible in regard to the timing of the staged reconstruction and recovery of activity in the consumer-sectors

2 Aug 08 RJovel 14

Step 3. Projection of future electricity supply

Case I: One or more power plants have been put out of commision due to damage, but alternative plants are available on stand-by mode

In this case, electricity supply is only suspended briefly until the alternative units can be brought into line

However, unit generation costs of the alternative power plants are normally higher than the ones of the damaged units

The resulting increase in operational costs, over the time required for the damaged power unit to be repaired, must be estimated

In addition, if the alternative power capacity belongs to an independent nearby system, the cost of interconnection must be ascertained and accounted for as a loss

2 Aug 08 RJovel 15

Step 3. Projection of future electricity supply..

Case II: When damaged components of the electrical system cannot be substituted promptly by stand-by facilities, and power supply must be discontinued

In this case, the electrical sector specialist, in close cooperation with construction/maintenance engineers of the affected electrical enterprise, must estimate the time required to bring back into line the affected system components, taking into consideration all normal constraints

Once this is done, the sector specialist must estimate the losses in revenues due to the non-sale of electricity to consumers, taking into consideration demand and rates

2 Aug 08 RJovel 16

Step 4. Estimate total losses

Total value of losses can be obtained by the addition of the individual losses described before

To do that, compare the performance of the sector before the disaster with that for the situation prevailing after the disaster1. Compare projection of revenues before and after

the disaster, for the length of time required to achieve full recovery, and ascertain revenue losses

2. Determine increased operational costs arising from the use of alternative power sources and from inter-connecting to nearby electrical systems having idle capacities

3. Add both estimates to obtain total losses for the sector

As indicated previously, production losses occurring in consumer-sectors due to lack of electricity are to be estimated in those sectors

2 Aug 08 RJovel 17

Information and Sources

Information Required

Historical electricity sales (KWh), per consumer-sector

Historical electricity rates (US$/KWh), per consumer-sector

Electricity sales projections, per consumer sector

Electricity rate projections, per consumer-sector

Length and coverage of service interruption due to disaster

Typical Sources

Electrical utility enterprises, public and private

Regulating body or institution

National energy institution

National economic planning institution or ministry

Annual reports of performance by privately-owned electrical enterprises

Application to Kenya drought

For years 2008, 2009, 2010 and 2011

1. Determine annual decline in electricity production due to drought

2. Determine average energy production costs of – Hydropower – Geothermal– Diesel– Other types of generators

3. Estimate higher, overall costs of electricity generation of system to compensate for lower hydropower generation due to drought

4. Estimate annual amounts of energy not served to consumers due to load shedding scheme

5. Estimate impact on balance of payments due to required imports of fuel

2 Aug 08 RJovel 19

rjovel@jovel.org

Thank You !!