Association Webinars: The Value of Electricity Reliability: Evidence from Battery Adoption



Wildfire risk has led California utilities to implement power outages to prevent electric-infrastructure-induced fires-the Public Safety Power Shutoffs-resulting in millions of people losing power for multiple days at a time. We use variation in the timing and location of these outages to quantify their impact on household adoption of rooftop solar and battery storage. We find evidence of a large increase in solar plus storage capacity in zip codes that were most affected by the outages. The elevated adoption primarily occurred in zip codes in the top 25th percentile of the income distribution and in the lower 25th percentile of the distribution of vulnerability to environmental justice concerns. The disparity in averting expenditures suggests inequities might arise in the burden of future outage events. Taking future expected outages into consideration, we use a dynamic discrete choice model of solar plus storage adoption to estimate the willingness to pay to avoid outage events. This framework provides a unique revealed preference estimate of the consumers' value of lost load (VOLL), a key parameter in electricity market design.

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David Brown is an Associate Professor at the University of Alberta's Department of Economics. He holds a Canada Research Chair in Energy Economics and Policy and is the President of the Canadian Association for Energy Economics. David's research lies at the intersection of energy economics, industrial organization, and regulatory policy. His recent research considers questions related to electricity market design, market power execution in wholesale and retail electricity markets, designing regulations to motivate utilities to invest in cost-effective distributed energy resources, analysis of policies to better integrate electric vehicles into the grid, and analyzing the impacts of compensation policies on renewable investment.

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Event Date: May 16, 2022

Event Time: 10:00 - 11:00 PM Eastern Time

Topic: The Value of Electricity Reliability: Evidence from Battery Adoption

Speaker: David Brown

Price: FREE

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