Estimating Value of Lost Load for Business and Industrial Customers in Indonesia Using Stated Preferences Methods

The Value of Lost Load (VoLL) quantifies the economic impact of power supply disruptions in rupiah per megawatt-hour and is crucial for justifying economic feasibility and investment decisions. This study uses the Stated Preferences (survey) method to calculate VoLL for the Jawa Madura Bali (Jamali) electricity system in Indonesia, taking into account data availability, calculation complexity, and result reliability. The findings reveal that the mean VoLL for business customers ranges from IDR 782,582 for a 5-minute outage to IDR 25,842 for a 24-hour outage, while for industrial customers, it ranges from IDR 35,340,331 for a 5-minute outage to IDR 3,060,356 for a 24-hour outage. Additionally, the analysis of Willingness to Accept (WTA) and Willingness to Pay (WTP) shows that businesses have a mean WTA of IDR 12,069 and a mean WTP of IDR 3,677, whereas industries have a mean WTA of IDR 10,737 and a mean WTP of IDR 2,355. These results highlight the substantial economic impact of power outages on different customer sectors and emphasize the need for targeted investments to enhance reliability. Integrating VoLL into policy and investment frameworks allows power companies and policymakers to make informed decisions, ultimately improving system reliability and economic efficiency.