The True Cost of Outages in Canada: $12 Billion

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Downed Tree

It’s no secret power outages can be incredibly frustrating. And in today’s fast-paced, increasingly connected world, even the slightest disruption can cause major inconvenience, loss of productivity, and financial ruination.

Businesses want to avoid downtime, and no matter the industry, any length of unexpected downtime is too long and costly. Production comes to a halt, employees sit idle, data are lost, and in-process goods and materials may need to be disposed of. Undoubtedly, the gravity of a power outage, even a momentary outage, cannot be understated and rightfully generates discontentment, upset, and exasperation.

Residential energy customers want to be able to keep in contact with loved ones or stream their favourite content without hiccups or interruptions. Adding another layer of complexity is that the line between business and residential is starting to blur as the number of people working from home continues to rise.

The reality is power outages power outages generally are unavoidable, and while utilities are working hard on improving grid reliability and resiliency, more attention is being paid to the financial ramifications incurred by residential as well as small and medium/large commercial and industrial customers when the power goes out.

In a GridTalk post last summer, we shared an update from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory that stated the annual cost of short interruptions (lasting 5 minutes or less) in the U.S. rose from US$52 billion in 2002 to US$60 billion in 2014. These findings prompted exploration into whether comparable numbers would be found in its neighbouring Canada. Because no such publicly available data on the cost of Canadian outages existed, we conducted our own independent study using Berkeley’s ICE calculator.

The ICE Calculator uses several inputs for estimation, including reliability (SAIDI and SAIFI), number of customers, relative location and geography, and customer category. All output amounts are in Canadian dollars.

So, what is the true cost of power outages in Canada? A staggering CAD$12 billion. Momentary and sustained outages are costing Canadians CAD$8 billion and CAD$4 billion, respectively (Note: In Canada, momentary interruptions are defined as lasting one minute or less). This sobering number paints a very clear picture: outages cause downtime, and downtime equals economic and financial loss.

Now that we know the cost of power interruptions, what comes next? This data is just a starting point. We do know that, as the needs of energy customers continue to evolve, so, too, must the ways of protecting power systems.

While it’s impossible to prevent power outages from happening entirely, whether it be in Canada, the U.S., or anywhere else in the world, it is possible to better isolate and discriminate faults and minimize the problems caused by outages with the help of smart reliable solutions.

I’d be interested in learning your thoughts on the power outage cost to Canadians and how your utility is working to reduce those expenses.

Expert

Paul McMullen

Publication Date

December 12, 2018