Loss of Load Expectation (LOLE)
European Union Electricity Market Glossary

 

 


 

 

Loss of Load Expectation (LOLE) represents a metric which could be used to measure security of supply as well as to set a reliability standard.


LOLE represents the number of hours per annum in which, over the long-term, it is statistically expected that supply will not meet demand (DECC Reliability Standard Methodology, July 2013, p. 3).

 

This is a probabilistic approach – that is, the actual amount will vary depending on the circumstances in a particular year, for example how cold the winter is; whether or not an unusually large number of power plants fail to work on a given occasion; the power output from wind generation at peak demand; and, all the other factors which affect the balance of electricity supply and demand.

 

 

Putting LOLE in perspective

 

LOLE values are generally deduced from a much longer term average. The 3 hours on average per year LOLE standard in France for instance is derived from a calculation that predicts a 30 hour disruption every ten years. To put the LOLE standards into perspective, even the most relaxed standard currently applied in Europe, of 8 LOLE-hours per year, translates into a system security level of 99.90% - i.e. 99.9% of the time no one will be involuntarily disconnected.

 

Moreover, it is important to realise that LOLE hours should not be viewed as hours in which a major blackout takes place leaving entire market areas without power, but may be solved by TSOs without major impacts, i.e. by using instruments such as temporary voltage reductions or the selective disconnection of large industrial users. When not seen in perspective, a Loss of Load Expectation may give the wrong impression that blackouts are expected.

 

Indeed, for most Member States network failures, for example after weather events that damage network infrastructure, have historically led to far more involuntary unmet demand than generation inadequacy.

 

Commission Staff Working Document, Accompanying the document Report from the Commission, Interim Report of the Sector Inquiry on Capacity Mechanisms {C(2016) 2107 final}, 13.4.2016 SWD(2016) 119 final, p. 60

 

However, it is important to note when interpreting this metric that a certain level of loss of load is not equivalent to the same amount of blackouts; in most cases, loss of load would be managed without significant impacts on consumers.

 

Commission Staff Working Document, Accompanying the document Report from the Commission, Interim Report of the Sector Inquiry on Capacity Mechanisms {C(2016) 2107 final}, 13.4.2016 SWD(2016) 119 final refers to a calculation of a loss of load probability (LOLP) as a more sophisticated method to measure generation adequacy.

 

Pursuant to the said document (p. 56) LOLP quantifies the probability of a given level of unmet demand over a certain period of time.

 

The said Commission Staff Working Document explains, moreover, often "LOLP is expressed as a loss of load expectation (LOLE) which sets out the expected number of hours or days in a year during which some customer disconnection is expected. (for example, if 1 day in 10 years some customers would need to be disconnected, LOLE would be 0.1 days or 2.4 hours). This probabilistic approach can take into account variations in demand over the years as a result of climate fluctuations."

 

LOLP/LOLE do not measure the total shortfall in capacity that occurs at the time when there are disconnections, and neither LOLP/LOLE nor capacity margins measure the amount of unmet demand.

 

This would require a measurement of expected energy not served (EENS) which would be expressed in MWh over a specific time period (eg. a year).

 

 

Recital 11 of the Proposal for a Regulation of the European Parliament and of the Council on risk-preparedness in the electricity sector and repealing Directive 2005/89/EC, 30.11.2016 COM(2016) 862 final, 2016/0377 (COD)

 

A common approach to crisis prevention and management requires, above all, that Member States use the same methods and definitions to identify risks relating to the security of electricity supply and are in a position effectively to compare how well they and their neighbours perform in that area. The Regulation identifies two indicators to monitor the security of electricity supply in the Union: 'expected energy non served' (EENS), expressed in GWh/year, and 'loss of load expectation' (LOLE), expressed in hours/year. These indicators are part of the European resource adequacy assessment carried out by the European Network of Transmission System Operators for Electricity (ENTSO-E), pursuant to [Article 19 of the proposed Electricity Regulation]. The Electricity Coordination Group shall carry out regular monitoring of the security of supply based on the results of these indicators. The Agency for the Cooperation of Energy Regulators (Agency) should also use these indicators, when reporting on Member States' performance in the area of security of supply in its annual electricity market monitoring reports, pursuant to [Article 16 of the proposed ACER Regulation].

 

EENS thus also makes it possible to monetize the shortfall in a system where VoLL has also been calculated since the amount of EENS can then be multiplied by VoLL.

 

In the EU Member States that calculate a LOLE in the context of their adequacy assessment, the standard is often expressed as a tolerated level of LOLE-hours.

 

Targets generally range from 3 to 8 hours (Commission Staff Working Document, 13.4.2016 SWD(2016) 119 final, p. 58).

 

For example, the Belgian LOLE refers to a 95th percentile standard according to which during severe conditions of which the chance is 5% (i.e. a very cold winter that occurs once in 20 years) the LOLE must be inferior to 20 hours.

 

The so-called 'Winter Energy Package' applies LOLE as the key metric for European resource adequacy assessments.

 

The said estimations cover the overall adequacy of the electricity system to supply current and projected demands for electricity for a ten-year period from the date of that assessment (in a yearly resolution), and, according to Article 19(4)(h) and Article 19(5)(c) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)must use LOLE (and EENS) as reliability standard indicators.

 

 

 


 

 

 

Documentation

 

 

Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD), Article 19(4)(h) and Article 19(5)(c)

  

Commission Staff Working Document, Accompanying the document Report from the Commission, Interim Report of the Sector Inquiry on Capacity Mechanisms {C(2016) 2107 final}, 13.4.2016 SWD(2016) 119 final, p. 56, 60

 

 

Proposal for a Regulation of the European Parliament and of the Council on risk-preparedness in the electricity sector and repealing Directive 2005/89/EC, 30.11.2016 COM(2016) 862 final, 2016/0377 (COD), Recital 11

 

DECC Reliability Standard Methodology, July 2013, p. 3

 

 

 

 

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Last Updated on Sunday, 21 May 2017 21:37
 

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