The value of lost load for electricity in the Netherlands

Study
The VoLL (“Value of Lost Load”) is a quantitative measure of electricity consumers’ willingness to pay for security of supply. It is therefore a useful input for determining the point at which both security of supply and the affordability of electricity provision are at a socially optimal level. VoLL is defined as an estimate in €/MWh of the maximum electricity price that consumers are willing to pay to avoid a power outage. 

The objective of this joint SEO and Ecorys study is to determine the Dutch VoLL. The key methodological choice is to assess electricity consumers’ willingness to pay using a vignette analysis. The survey measures this willingness to pay for avoiding a typical power outage. Respondents are also directly asked about their willingness to pay, and several relevant characteristics are collected (such as household size or the sector in which a company operates, annual electricity consumption, and annual electricity costs). Between November 2021 and March 2022, surveys were conducted among households, small and medium-sized enterprises (SMEs), and large firms. We received usable responses from 1,011 households and 301 companies. 

Results 
Based on the disconnection order applied by national and regional grid operators, a single VoLL for the Netherlands has been determined. For a typical power outage (as described above), this equals €68,887 per MWh. For a power outage affecting 10 percent of load, this corresponds to a total economic damage of €87 million.