Valuing flexible resources in the Korean electricity market based on stated preference methods

This study quantifies the value of lost load (VoLL) for the manufacturing sector in South Korea using stated preference methods. VoLL represents the cost of a stable electricity supply, which serves as a public good without a market price to compensate for flexible resources in the electricity market. The contingent valuation and choice experiment showed VoLL ranges from 0.35 to 0.80 USD per kWh unserved, below the industrial VoLL estimates in the existing literature. This finding suggests that outages may have lower costs for electricity consumers than investing in flexible resources. Using the correct estimate of outage costs is required to ensure capacity adequacy.