Solomon Achalu Jan 2019 Final Thesis

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Power Systems Engineering Thesis
2020-03-16
THE ECONOMIC IMPACT OF POWER

INTERRUPTION ON INDUSTRIAL
CONSUMERS: A CASE STUDY IN YES
BRANDS FOODS & BEVERAGES PLC
AND OXFORD AMALGATED PLC
Achalu, Solomon
http://hdl.handle.net/123456789/10391
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BAHIR DAR UNIVERSITY
BAHIR DAR INSTITUTE OF TECHNOLOGY
SCHOOL OF RESEARCH AND POSTGRADUATE STUDIES
FACULTY OF ELECTRICAL AND COMPUTER ENGINEERING
THE ECONOMIC IMPACT OF POWER INTERRUPTION ON

INDUSTRIAL CONSUMERS:
A CASE STUDY IN YES BRANDS FOODS & BEVERAGES PLC
AND OXFORD AMALGATED PLC
By
Solomon Achalu Fita
Bahir Dar, Ethiopia

February 12, 2019
The Economic Impact of Power Interruption on Industrial Consumers
THE ECONOMIC IMPACT OF POWER INTERRUPTION ON INDUSTRIAL

CONSUMERS:
A CASE STUDY IN YES BRANDS FOODS & BEVERAGES PLC AND OXFORD
AMALGATED PLC
By
Solomon Achalu Fita
A Thesis Submitted to the School of Research and Graduate Studies of Bahir Dar
Institute of Technology, BDU in Partial Fulfillment of the Requirements for the
Degree of Master of Science in Power System Engineering in the Electrical and
Computer Engineering Faculty.
Advisor:
Dr. Mengesha Mamo
Bahir Dar, Ethiopia

February 12, 2019
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ACKNOWLEDGEMENTS
First of all, I praise the almighty God, who has given me strength in all dimensions. Next,
I would like to thanks my advisor Menegesha Mamo (Ph.D.) for his kindly, politely and
continuous guidance and assistance during my research work. My appreciation is also
goes to those institutions who gave me support by sharing important ideas and data as
input to finalize the research. Especially, I would like to thanks sebeta one substation
head Ato Daniel Alemu, the substation workers, and all yes & oxford plc staff members
for their continuous support. I would like to express my deepest love for my son, Beki
Solomon for his tolerance when he did not get my attention due to this paper work.
Finally, I am so grateful to all my friends those who encourage me during the preparation
of the thesis.
Master Thesis, Bahir Dar Institute of Technology, 2019 Page v

ABSTRACT
The impact of power interruption on the modern society, who uses electricity almost in
every aspect of life, is very severe. During power interruption, the daily routine activities
of the consumers especially the industrial sectors that depend mainly on electricity will
be paralyzed. The economic impact of power interruption on Yes Brands Foods &
Beverages Plc and Oxford Amalgated plc were assessed. The interruption duration and
frequency of yes plc are 20.89 hrs/month and 48.5times/month respectively. In addition,
the interruption duration and frequency of the oxford plc are 29.05hrs/month and
38.33times/month respectively. The mixed method research approach and case study
were used to analyze the case deeply in a given bounded time by collecting relevant data
through both primary data sources (interview, observation and discussion) and secondary
data sources (document reports and review). The preventive cost method (revealed
preferences method) and the production function cost estimation methodologies were
used to analyze the power interruption unit cost of yes plc and oxford plc respectively.
The results indicated that the power interruption unit cost of yes and oxford plc are
14.78birr/kwh & 22.13birr/kwh respectively. The main indentified causes of power
interruption of the industries are short circuits, earth faults, and operational request. The
causes for short circuits and earth faults at the substation can be minimized by inspecting
the power system regularly and replacing the damaged equipments, insulators, protective
devices etc. The industrial sectors can mitigate the cost incurred due to power
interruption by arranging backup system and facilities. Substation feeders' rearrangement
can reduce the cost incurred by oxford plc due to power interruption by 84%.
Key words: Power Interruption, Power Outage, Industrial Sector and Cost
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TABLE OF CONTENTS
DECLARATION ............................................................................................................... iii

ACKNOWLEDGEMENTS .................................................................................................v
ABSTRACT ....................................................................................................................... vi
LISTS OF TABLES .............................................................................................................x
LISTS OF FIGURES ........................................................................................................ xii
ABBREVIATIONS ......................................................................................................... xiii
CHAPTER ONE ..................................................................................................................1
1. INTRODUCTION ...........................................................................................................1
1.1. Background of the Study ...........................................................................................1
1.2. Statement of the Problem ..........................................................................................3
1.3. Objective of the Study ...............................................................................................5
1.3.1. General Objective .............................................................................................. 5
1.3.2. Specific Objectives ............................................................................................ 5
1.4. Research Methodology..............................................................................................5

1.4.1 Research Approach ............................................................................................. 5
1.4.2 Research Design ................................................................................................. 6
1.4.3. Apparatus or Material Used ............................................................................... 6
1.4.4. Data Collection Techniques............................................................................... 7
1.5. Scope of the Study.....................................................................................................8

1.6. Limitation of the Study .............................................................................................8
1.7. Significance of the Study ..........................................................................................9
1.8. Description of Area of the Study...............................................................................9
1.8.1. Sebeta one Substation ...................................................................................... 10
1.8.2. Profile of the Industries ................................................................................... 12
1.9. Organization of the Paper ........................................................................................16

CHAPTER TWO ...............................................................................................................18
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2. THEORETICAL BACKGROUND AND LITERATURE REVIEW ..........................18

2.1. Introducing Power Interruption and Outage............................................................18
2.2. Classification of Power Outages .............................................................................19
2.3. Forms of Power Outages .........................................................................................20
2.4. Causes and Characteristics of Power Outages ........................................................21
2.5. Cost of Power Outages ............................................................................................22
2.6. Ethiopian Power Sector ...........................................................................................23
2.7. Effect of Power Interruption on Industry ................................................................25
2.8. Power Outage Cost Estimation Methodologies ......................................................27
2.8.1. Customer Surveys Methods ............................................................................. 28
2.8.2. Market Based Methods (Revealed Preferences Methods) ............................... 29
2.8.3. Production Function Method ........................................................................... 30
2.8.4. Case Studies ..................................................................................................... 31
2.9. Reviewed Literatures...............................................................................................31

CHAPTER THREE ...........................................................................................................35
3. POWER INTERRUPTION DATA AND ITS COST ANALYSIS ...............................35
3.1. Analyzing Interruption at the Substation ................................................................37
3.1.1. Analyzing Power Interruption of all Feeders at the Substation ....................... 38
3.1.2. Analyzing Power Interruption of F2 & F11 at the Substation .......................... 41
3.2. Data Analysis Methodology for Yes Plc .................................................................46

3.3. Power Interruption Cost Analysis of Yes Plc..........................................................46
3.3.1. Indirect Cost (Self-Generating Cost) ............................................................... 53
3.3.2. Direct Cost (Cost due to Damaged Equipments)............................................. 53
3.3.3. Utility Cost ...................................................................................................... 54
3.3.4. Overall Cost ..................................................................................................... 54
3.4. Oxford Plc Data Analysis Methodology .................................................................54

3.5. Power Interruption Cost Analysis of Oxford Plc ....................................................55
3.5.1. Oxford Plc Outage Cost ................................................................................. 58
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3.5.2. Utility Cost ...................................................................................................... 60
3.5.3. Overall Cost ..................................................................................................... 61
3.6. Mitigation of the Cost Incurred by Industries .................................................... 61
3.6.1. Rearranging the Substation Feeders ................................................................ 62
3.6.2. Arranging Backup System ............................................................................... 63
3.6.3. Installing Backup System Accessories ............................................................ 64
CHAPTER FOUR ..............................................................................................................65

4. RESULT DISCUSSION AND INTERPRETATION ...................................................65
4.1. Substation Analyzed Data Discussion.....................................................................65
4.1.1. Analyzed Data Discussion of all Feeders ........................................................ 65
4.1.2. Analyzed Data Discussion of F2 & F11 ............................................................ 67
4.2. Result Discussion for Yes Plc .................................................................................69

4.3. Result Discussion for Oxford plc ............................................................................72
4.4. Effects of Outage Duration on Industry's Interruption Cost ...................................76
4.4.1. Effects of Outage Duration on the Cost Incurred by Oxford Plc .................... 76
4.4.2. Effects of Outage Duration on the Cost Incurred by Yes Plc .......................... 78
CHAPTER FIVE ...............................................................................................................80

5. CONCLUSIONS AND RECOMMENDATIONS ........................................................80
5.1. Conclusions .............................................................................................................80
5.2. Recommendations ...................................................................................................82
5.3. Recommendation for Future Works ........................................................................82
REFERENCES ..................................................................................................................84
APPENDICES - SURVEY DOCUMENTATION ............................................................87
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LISTS OF TABLES
Table‎ 1.1: The summarized sebeta one substation power interruption duration and
frequency in 2017 G.C ........................................................................................................ 2
Table‎1.2: Sebata one general substation Data ................................................................ 10
Table ‎1.3: Oxford woven pp bags product specification. ................................................. 15
Table ‎2.1: Power outage characteristics........................................................................... 21
Table ‎2.2: Existing Power plant installed Capacity (in MW) to the national grid............ 24
Table ‎3.1: Interruption duration and frequency of each 13 feeders at the substation for
one year (during 2017 G.C) .............................................................................................. 39
Table ‎3.2: power interruption duration and frequency on feeder, F2 (Yes plc feeder) for
the past 12 months (2017 G.C) ......................................................................................... 41
Table ‎3.3 : The total power interruption duration and frequency of feeder, F2 (Yes plc
feeder) for the past one year, 2017 G.C. ........................................................................... 43
Table ‎3.4 : The monthly average power interruption duration and frequency of feeder,
F2(Yes plc feeder) for the past one year, 2017 G.C. ........................................................ 43
Table ‎3.5 : Power interruption duration and frequency of feeder, F11 (Oxford plc feeder)
for the past 12 months of 2017 G.C .................................................................................. 43
Table ‎3.6 : The total power interruption duration and frequency of feeder, F11 (Oxford
plc feeder) for the past one year, 2017 G.C. ..................................................................... 45
Table ‎3.7 : The monthly average power interruption duration and frequency of feeder,
F11 (Oxford plc feeder) for the past one year, 2017 G.C. ................................................. 45
Table ‎3.8 : Approximate fuel consumption chart of diesel generator............................... 47
Table ‎3.9: Fuel consumption of yes plc standby generator at different load level ......... 48
Table ‎3.10: Cost of maintenance item & labor per year ................................................... 49
Table ‎3.11: Stand by generator charge data. ..................................................................... 50
Table ‎3.12: Cost of fuelling generator .............................................................................. 52
Table ‎3.13: Damaged equipment cost. .............................................................................. 53
Table ‎3.14: Annual raw material requirements and its cost.............................................. 56
Table ‎3.15 : Annual utilities cost ...................................................................................... 56
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Table ‎3.16: Human resource (HR) and labor cost ............................................................ 57

Table ‎3.17: Annual production cost at full operating capacity. ........................................ 58
Table ‎4.1 : Total interruption data of all feeders at the substation in 2017 G.C ............... 65
Table ‎4.2: Monthly average interruption data of all feeders at the substation in 2017 GC
........................................................................................................................................... 65
Table ‎4.3: Average interruption duration and frequency of the two industries (yes and
oxford plc). ........................................................................................................................ 68
Table ‎4.4: Actual interruption cost (excluding restarting cost) of oxford and the utility . 73
Table ‎4.5: Actual interruption cost if short circuit interruption duration is reduced by half
........................................................................................................................................... 73
Table ‎4.6: Actual interruption cost if earth fault interruption duration is reduced by half
.......................................................................................................................................... .74
Table ‎4.7: Actual interruption cost if operational interruption duration is reduced by half
........................................................................................................................................... 74
Table ‎4.8: Actual interruption cost if under frequency interruption duration is reduced by
half .................................................................................................................................... 75
Table ‎4.9: Oxford plc cost components during power outage scenarios .......................... 77
Table ‎4.10: Yes plc cost components during power outage scenarios ............................. 78
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LISTS OF FIGURES
Figure ‎1.1: Sebeta one substation single line diagram ...................................................... 11

Figure ‎1.2: Sebeta one substation google map................................................................. 12
Figure ‎1.3: Yes Brands and Foods Beverages Plc google map ....................................... 13
Figure ‎1.4: Google map of Oxford Plc ............................................................................ 16
Figure ‎2.1: Reliability and cost relationship ..................................................................... 23
Figure ‎4.1: The monthly average interruption duration and frequency of each feeders. .. 66
Figure ‎4.2 : Generalized substation interruption data of feeder two (Yes plc) and feeder
eleven (oxford plc). ........................................................................................................... 67
Figure ‎4.3: Annual component and total cost incurred by yes plc and utility cost ........... 70
Figure ‎4.4: Graph showing unit Cost of self-generation, damaged equipments cost,
industry cost, power utility cost and overall cost .............................................................. 71
Figure ‎4.5: The change on the cost incurred by oxford plc when the interruption duration
due to short circuit, earth fault, operational request and under frequency is reduced by
half. ................................................................................................................................... 76
Figure ‎4.6: The relationship between oxford plc cost, its component costs and power
outages duration scenarios ................................................................................................ 77
Figure ‎4.7: The relationship between yes plc cost, its component costs and power outages
duration scenarios ............................................................................................................. 79
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ABBREVIATIONS
ATS AUTOMATIC TRANSFER SWITCH
CDF CUSTOMER DAMAGE FUNCTION
CIC CUSTOMER INTERRUPTION COST
CPU CENTRAL PROCESSING UNIT
DW DIRECT WORTH
EEA ETHIOPIAN ELECTRIC AUTHORITY
EF EARTH FAULT
EEP ETHIOPIAN ELECTRIC POWER
EEU ETHIOPIAN ELECTRIC UTILITY
F FEEDER
GC GREGORIAN CALENDAR
GHc GHANAIAN CEDI
GOE GOVERNMENT OF ETHIOPIA
HR HOUR
ICS INTER CONNECTED SYSTEM
IDF INDUSTRIAL DAMAGE FUNCTION
IEEE INSTITUTE OF ELECTRICAL& ELECTRONICS ENGINEERS
KV KILO VOLT
KW KILO WATT
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KWH KILOWATT HOUR
KW/M2 KILO WATT PER METER SQUARE
M METER
MAN MANUFACTURER ASSOCIATION OF NIGERIA
MoWIE MINISTRY OF WATER, IRRIGATION & ENERGY
M/S METER PER SECOND
MSI MICRO & SMALL SCALE INDUSTRIES
MW MEGA WATT
NBS NATIONAL BUREAU OF STATISTICS
OL OVER LOADING
OP OPERATION
PAM PREPARATORY ACTION METHOD
PASDEP PLAN FOR ACCELERATED AND SUSTAINED
DEVELOPMENT TO END POVERTY
PLC PRIVATE LIMITED COMPANY
PLC PROGRAMMABLE LOGIC CONTROLLER
R RAND
RS RUPEES
SC SHORT CIRCUIT
SCS SELF CONTAINED SYSTEM
TV TELEVISION
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UF UNDER FREQUENCY
UPS UNINTERRUPTED POWER SYSTEM
VA VALUE ADDED
VoLL VALUE OF LOST LOAD
WTA WILLINGNESS TO ACCEPT
WTP WILLINGNESS TO PAY
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CHAPTER ONE
1. INTRODUCTION
1.1. Background of the Study
Electricity is the most and the best efficient form of energy that is very essential for the
modern societies and that is why it sits on the highest point of energy pyramid (energy
ladder). Nowadays our society starts to use electrical equipments almost in every aspects
of life. Almost, all of our activities depend on electric energy: it is the source of electric
energy (electricity) that lights our night and powers the traffic light that moderates our
traffic. Manufacturing processes are dependent upon electrical machines to perform the
precise and repetitive tasks that have increased the total productivity of present day
industry. Mining operations requires electricity to maintain favorable condition to human
life underground. Today's widely used social media are accessed when there is
electricity. The usage of this modern energy (electricity) for heating and cooking saves
women and children many hours of work, because in developing countries, it is typically
a woman or child's responsibility to gather wood or other biomass for cooking or heating.
The necessity for electricity within the healthcare sector is undeniable as all modern
health appliances are fully dependent upon it. Electrified households allow children to
obtain sufficient luminescence to study at night, utilize TV, radio or information and
communication technologies for educational purposes thus leading to a child-friendly
educational environment. The provision of electricity-dependent equipment such as
computers improves a school's overall quality as well.
Having an installed power grid connection to our house or city does not give guarantee of
using electricity for our day-to-day activities. Reliable access to power is crucial as well.
Long and frequent power outages can cause people almost as many, if not more,
difficulties as when they do not have electricity at all. Electric power interruptions occur
when system capacity, due to severe power outages, is insufficient to meet the system
Msc Thesis, Bahir Dar Institute of Technology, BDU, 2018 Page 1
load levels. During these periods of inadequacy, outage costs will be borne by the utility,
its customers and perhaps, by the entire society. [1]
The industrial sector especially the manufacturing industries are severely embarrassed by
power failures because, power outages bring production lines to an abrupt halt. Most of
the industries found in western part of Addis Ababa (which are connected to Sebeta one
substation) have encountered this problem. During power interruption, the industries'
production activities have disturbed, sensitive materials and equipments have been
damaged, workforce production time has been wasted, raw material has been damaged
and etc. The summarized Sebeta one substation operational log book data showing the
power outage encountered the industries and all the customers connected to this
substation feeders (in 2017 G.C) is indicated as follows in detail:
Table 1.1: The summarized Sebeta one substation power interruption duration and
frequency in 2017 G.C
Feeders Interruption Total annual value Monthly average value

F1 Duration 188.4 hrs 15.7 hrs
Frequency 139 times 11.6 times
Frequency 48 times 4 times
Frequency 132 times 11 times
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Frequency 265 times 22 .08times
F11 Duration 348.56 hrs 29.05hrs
Hence, it has become vital to prevent or reduce power outages due to its severe impacts
on economy. Thus, studying and correctly estimating power outage costs has become an
attractive and popular field of study in the recent years.
In general, understanding the economic impacts of the electric power interruptions to

industrial consumers is more crucial than it was in the past because of industrialization
growth. There are some literatures come up with an estimation of power outages costs.
However, there is no widely accepted methodology, which proposes credible and
acknowledged estimation to the economic impacts of the electric power interruptions yet.
This makes studying the customer interruption costs an attractive area of interest for the
members of the electric power society. This study will critically view the problems and
assesses the cost associated with the effects of electrical power outages on these
industrial consumers.
1.2. Statement of the Problem
Electricity has become a vital part of the modern societies. Almost, all of our activities
depend on electric energy. Electric energy has great role in every sector: commercial,

residential, industrial, agricultural, educational, health, and etc. Manufacturing industries

use electrical machines to perform the precise and repetitive tasks that have increased the
total productivity of present day industry. Hence, because of our dependence on
electricity it has become a critical enabling resource without which we are severely
hampered.
The impact of power interruption on modern industries, which demand high energy, is
more severe. To be specific, Ayka Addis textile and investment group, Walia steel
industry plc, Oxford Amalgated plc, Ethiopia Hansom International Glass Plc and Yes
brands food and beverages plc are some of the industries found in the western zone of
Addis Ababa. Sebeta one, which is one of the substations in western power sector zone, is
serving these industries. During power interruption, the daily routine of the industrial
consumers connected to this substation will be paralyzed or else should be covered by
some back up arrangement system. The researcher planned to analyze the impact of
power interruption of the two industries: Yes Brands Foods & Beverages Plc and Oxford
Amalgated plc, which are connected to F2 and F11 of the substation respectively. The
interruption duration of yes plc and oxford plc are 20.89 hrs/month and 29.05hrs/month
respectively. The researcher has selected these two industries for the study because; the
interruption duration of oxford plc (F11) and interruption frequency of yes plc (F2) are the
most severe relatively (refer table 1.1 or figure 4.1). However, how do we measure the
value that lost to these two industries during power interruption? The aim of this study is
to estimate the economic impacts of the electric power interruptions on these two selected
industrial premises. In other words, the relationships between cost in birr and the unit of
energy (in kwh) the industries lost because of power outages will be analyzed.

1.3. Objective of the Study
1.3.1. General Objective
The main objective of this study is to analyze or assess the impact of power outage in
terms of cost on the selected industrial premises (Yes Brands Foods & Beverages Plc and
Oxford Amalgated plc.) in Western part of Addis Ababa.
1.3.2. Specific Objectives
The specific objectives of this research are as follows:

 to quantify the financial losses due to irregular power supply and scheduled
load shedding of the two selected industrial sectors of Western Addis Ababa.
 to calculate the loss incurred by power system utility.
 to indicate the degree of influence of power interruption on the economy of
the country.
 to identify the main causes of power outage or power interruption.
 to introduce different cost assessing methodology of power interruption.
 to suggest some remedies to be taken for stockholders.
1.4. Research Methodology
1.4.1 Research Approach
[2],suggested that‎ “Qualitative‎ approaches‎ employ‎ open-ended questions, emerging

methods, text or image data, interview data, observation data, document data and
audiovisual data text and image analysis. Quantitative approaches employ closed-ended
instrument based questions, performance data, attitude data, observational data, and
census data statistical analysis and interpretation. Moreover, mixed methods approaches

use open- and closed-ended questions, both emerging and predetermined methods, and
both quantitative and qualitative data and analysis.
According to [2] mixed methods research is an approach to inquiry involving collecting

both quantitative and qualitative data, integrating the two forms of data, and using
distinct designs that may involve philosophical assumptions and theoretical frameworks.
The core assumption of this form of inquiry is that the combination of qualitative and
quantitative approaches provides a more complete understanding of a research problem
than either approach alone. Hence, according to [2], suggestion and the nature of the
problem to be studied the researcher intended to use the mixed method approach to
conduct the research.
1.4.2 Research Design
Case studies are a design of inquiry found in many fields, especially evaluation, in which
the researcher develops an in-depth analysis of a case, often a program, event, activity,
process, or one or more individuals. Cases are bounded by time and activity, and
researchers collect detailed information using a variety of data collection procedures over
a sustained period of time [2]. That means, case studies are performed when a researcher
desires to understand or explain a phenomenon. Accordingly, the case study research
method was adopted for the study to understand and explain the relation between the
power interruption and economic cost or impact on the industry sector by collecting data
using both primary and secondary data sources. This case study is bounded to be
conducted (in time range of 12 months) on the industrial sectors because of time
limitation.
1.4.3. Apparatus or Material Used
In order to accomplish the research, appropriate cost estimation methodology and

mathematical models were used. The researcher also intended to assess data collected
from primary sources (first hand data) through personal observations, interviews with

power sector officials, and discussions with the industrial sectors. The secondary data
sources such as relevant documents report of EEU & EEP accessed from the internet and
the industrial sectors were used to conduct the research work. In addition, DigSILENT
software was used to draw the single line diagram of the substation.
1.4.4. Data Collection Techniques
Quantitative data related to energy consumption (such as back up generation expenditure,

electricity bill, installed power capacity), production and profit level were collected. In
addition interview, observation, document review is the qualitative data that were used in
the thesis. By integrating both the qualitative and the qualitative data, the researcher
carried out the study of the economic impact of power interruption on the two selected
industrial premises of Western Addis Ababa.
The Ethiopian power sector of Addis Ababa was structured into four zones or districts
namely Northern, Southern, Eastern and Western zone. The researcher selected two
industries (Yes Brands Foods & Beverages Plc and Oxford Amalgated plc) found in
western power sector zone which are supplied power by Sebeta 1, substation. These
industries are intentionally selected because they are severed by power interruption
according to sebeta 1, substation report.
Data on power outages detailing costs of production downtime, material damaged,

restarting process etc. as well as costs of purchasing, running and maintaining private
power generating plants and back up facilities were collected from these electricity -
intensive industries through personal observation and interviews. A responsible officials
and workers from these industries were interviewed.

1.5. Scope of the Study
Every electric power utility is expected to supply customers, electrical energy as

economically as possible with a higher degree of reliability and quality. Here, the
questions mostly aroused are '' what is the optimum level for the reliability?'' And "what
is the economic worth of reliability?" The answer of the first question is not the scope of
this research. Only the second question which is related to the electric power
interruptions cost will be studied.
Electric service interruptions occur when system capacity, due to severe power outages,
is insufficient to meet the system load levels. During these periods of inadequacy, outage
costs will be borne by the utility, its customers and perhaps, by the entire society. The
utility outage costs include loss of revenue, loss of future sales and increased repair
expenditure and maintenance. These costs usually form only a small part of the total
outages costs. The greater part is that borne by the industrial consumers to which the
researcher mainly focused. Specifically, the researcher aims to examine the impact of
power interruption on the two selected industrial sectors in western Addis Ababa (in
terms of cost) for duration of about 12 months. In addition, the industries estimated cost
is the cost incurred due to power outages, which is directly related to production
processes.
1.6. Limitation of the Study
The researcher had faced different limitations in the process of collecting relevant data or
information. Unavailability of organized power interruption data, because the industries
have not the trend of recording the duration and frequency of power interruption. The
other limitations that the researcher encountered are the difficulty to join the power
sectors and the industries official because of the bureaucracy among some of the officials.
The political situation in the country was also a major challenge to join the industries
according to the researcher plan.

1.7. Significance of the Study
The relevancies of this research work are:
 gives awareness how power interruption influence the economy of the country.
 enables the EEU to start immediately rehabilitation work on the electric
network especially on the distribution system.
 enables the government to respond promptly with measures that will improve
the supply of energy to the consumers.
 shows the impact of power interruption (in terms of cost) on the industrial
sectors.
 helps both the government, the utility and even the end-users to understand and
consciously plan for energy and necessary infrastructural facility needs.
 can be used as a reference for further study on the impact of power reliability
and quality problems in our country.
 initiates the researchers for further work on reliability improvement of EEU.
1.8. Description of Area of the Study
Ethiopian Electric Power and utility (EEP & EEU) are the only electric power supply in
our country. They are engaged in power generation, transmission, distribution and sale of
electricity. To do these, there are many interconnected transmission and distribution
networks from the power generation to the customers or loads. Due to the poor reliability
and quality of the power system, the consumers (the industries) encountered power
interruption, which affect its routine activities. This study focuses on the economic
impact power interruption on the industrial sector (Yes Brands Foods & Beverages plc
and Oxford Amalageted plc).

1.8.1. Sebeta one Substation
Sebeta one substation is one of the existing substation in western Addis Ababa zone of
the power sector serving some of the industries found in the western part of Addis Ababa
(Ayka Addis Textile and Investment Group, Walia Steel Industry plc, Oxford Amalgated
plc, Ethiopia Hansom International Glass Plc and Yes Brands Food and Beverages plc).
The substation is transforming 230KV incoming voltage into 132KV, 45KV & 15KV
voltage values.
Table 1.2: Sebata one general substation Data
Lines & Feeders Quantity of Voltage Transformer Remark Location

transformers level (KV) (MVA)
Substation
230KV
132KV
45KV
15KV
Sebeta 5 2 3 15 3 230/132 125/125 Kera

one 1 132/45/15 25/25/10 Kore
1 132/45/15 12/12/4 inactive
2 132/15 50/50 1 more
under con.

Figure 1. 1: Sebeta one substation single line diagram
The two industries involved in the study: Yes Brands Foods & Beverages plc and Oxford
Amalgated plc get power from this substation through feeder two (F2) and feeder eleven
(F11) respectively. Figure 1.2 shows the location of Sebeta one substation.

Figure 1. 2: Sebeta one substation goggle map
1.8.2. Profile of the Industries
I. Yes Brands Foods & Beverages Plc
According to literatures, modern industrialization began at the end of the 19th century. In
early 20th century, modern manufacturing industries were introduced because of Ethio-
Djibouti railways construction and urbanization. Ambo mineral water is one of the first
mineral water established in Ethiopian around 1930. Now day there are many industries
involved in mineral water production in Addis Ababa and different regions of the
country. Yes, Aqua Addis, aqua safe, Hiwot, Gift, Arki, One, Eden, Origin, Best, Bokoji,
Promise, care, Wow, Fikir, Daily, Fham, Abisiniya, dessie etc are some of the mineral
water producers industries.

Yes Brands Foods & Beverages plc has started as Alemeyehu Mineral Water Factory
founded in 2010 G.C. with production of bottled water, within two years of operation the
company become a major player in the bottled water sector commanding sustained
market share in the category.
In May of 2013, Alemayehu Mineral Water Factory went in to a joint venture with an
equity fund company, Catalyst Principal Partners registered in Mauritius, to form new
foods, and beverages company under the name Yes Brands Foods & Beverages plc.
The company is currently producing bottled water in different pack sizes for the
consumers and customers throughout Ethiopia. It has the capacity to produce 37,000
liters per hour of 0.33, 0.4, 0.6, 1.0, 1.5, 2 and 20 liters of bottled water.
The company is in production for 24hrs with the intention to continue to build capacity in
the category to meet the ever-rising demand and to review other relevant categories
within a view of making attractive offers just as it has done in mineral water. The total
number of employee of the company is 550 from which 231 workers are engaged in
production activities. Figure 1.3 shows the location of Yes Brands Foods & Beverages
Plc.
Figure 1. 3:Yes Brands Foods & Beverages Plc goggle map

II. Oxford Amalgated plc
According to ministry of industry (MOI) report, there are 14 industries involved in the
production of woven polypropylene bags. Among 14, the largest three, Shaoxing Li
enterprise, oxford plc & Inova plc have the annual production capacity of 27,000 tons,
8100 tons and 8,000 tons of bags respectively.
Oxford Amalagated plc, which is found at the western part of Addis Ababa called
Alemegena, is managed to produce only 6,000 tons of bags (54,545,454 pieces of bags)
annually because of power shortage and interruption. The company is involved in the
production of woven polypropylene (pp) sacks for the local markets. It uses imported raw
materials (polypropylene resin, ink, and solvent) for the production of woven sacks,
which are extensively used in packing industry due to their wide variety of usage,
flexibility, and strength. The company production is distributed for local markets or
consumers, which are widely used in packing grain, feeds, fertilizer, seeds, powders,
sugar, salt and chemical in granulated form. The plant operates in three shifts twenty-four
hours per day for three hundred (300) days within a year considering 13 holidays and 52
Sunday per year and assuming that maintenance activities is performed during off hours
and Sundays. The company production is also ceased during power interruption.
Yarn making, weaving, bag making and recycling are the four main production
operations involved in the production process of polypropylene bags at oxford plc.
a. Yarn making
During this operation, polypropylene resin is charged in to hopper of extruder and heated
to pass through the die to form film and the film is cooled, cut in to a fixed width, then
delivered continuously in to stretching equipment. The hot plate of the stretching
equipment will heat the slit tape film, which is then stretched by high seed rolls and

results a stretched yarn, which will be annealed and wound on a bobbin to be delivered to
weaving process.
b. Weaving
This process is carried out by a circular loom system for weaving the stretched yarn in
tabular state. The yarn drawn out from the creel stand is set on the loom in a circular
shape and used as a warp. The pick is set on four shuttles, which are inside the loom, and
when the loom is operated the shuttle rotates in a circular shape which results the pick to
move through the warp in a circular shape to effect weaving.
c. Bag making
This is the last stage of the production process where the woven yarn is printed, cut to
length and converted to bag using cutters, printers and sewing machine in the process.
Finally, a bag with the following specification is made.
Table 1.3: Oxford woven pp bags product specification.
Size Weight Capacity

120 cm 110gm 100kg
d. Recycling process
The wasted yarn is re-used in the production process at this stage. The wasted yarn is
entered into the melting machine and heated (melted) forms a rope like structure. Then it
is cooled through water and cut into pieces. Finally, it is re- used as raw material after it
is mixed with polypropylene resin original raw material. Figure 1.4 indicates Oxford
Amalgated plc location.

Figure 1. 4: Google map of Oxford amalgated plc
1.9. Organization of the Paper
The report of the study is organized into six chapters.
Chapter one deals with background of the study, statement of the problem, the main and
the specific objectives of the study, methodology, scope, limitations, significance and
area of the study.
Chapter two is about theoretical background and different types of related literatures
reviewed during the study. This chapter is used to obtain clear understanding of power
interruption effects on the industries. The chapter is also used to analysis the gap between
this study and the previous related work. It enables the researcher to add more values
(knowledge) than transporting knowledge from one point to another.

Chapter three indicates the kind of data collected, from where the data is collected and
how the collected data is analyzed. It is also focuses on cost analysis methodology of the
industries and the results found.
Chapter four discuses and interprets the results found during the study deeply.
Finally, chapter five includes conclusion and recommendation made for the stakeholders
and the remaining works that would be done in the future.

CHAPTER TWO
2. THEORETICAL BACKGROUND AND LITERATURE REVIEW
A literature review, which focuses on the economic impact of power interruption on the
consumers, is presented in this section. It is used to identify what was previously done in
this area. Moreover, it is also used as additional input for this study. Therefore, to obtain
a clear understanding of the impact of power interruption on the industrial sectors a
literature review has been performed on the following areas:
 Definition of power interruption or outage
 Classification of power outages
 Forms of power outages
 Causes and characteristics of power outages
 Cost of power outages
 Power sectors of Ethiopia
 Effects of power interruption on the industries
 Power outage cost estimation methodologies.
 Some of the literatures conducted in the area.
2.1. Introducing Power Interruption and Outage
At this point it is better to introduce what mean by power interruption and power outage
.A power outages ( also called a power cuts, a power blackout, power failures) is a short
term or long-term loss (supply interruption) of electric power to its customers. [3]
Power interruption is the total loss of electric power on, at least, one normally energized
conductors to one or more customers connected to the distribution portion of the system.
It is the result of one or more component outages, depending on system configuration.
Moreover, power outages are the loss of ability of a component to deliver power. An
outage may or may not cause an interruption of service to customers, depending on

system configuration. This definition is derived from transmission and distribution

applications and does not apply to generation outage. However, in this paper power
outage is used as an outage, which causes power interruption and hence, power
interruption and power outage are used interchangeable. [4]
According to its forms, power interruption is categorized into the followings: Planned
interruption and unplanned interruption. Planned interruption is the loss of electric power
to one or more customers that results from a planned outage (here planned outage means
the intentional‎ disabling‎ of‎ a‎ component’s‎ capability‎ to‎ deliver‎ power,‎ done‎ at‎ a‎ pre-
selected time, usually for the purposes of construction, preventative maintenance, or
repair). Unplanned interruption is the loss of electric power to one or more customers that
does not result from a planned outage. The key test to determine if an interruption should
be classified as a planned or unplanned interruption is as follows: i.e. if it is possible to
defer the interruption, the interruption is a planned interruption; otherwise, the
interruption is an unplanned interruption. [4]
Nevertheless, depending on duration of interruption power interruption can be

categorized as momentary interruption and sustained interruption. Momentary
interruption is the brief loss of power delivery to one or more customers caused by the
opening and closing operation of an interrupting device. It lasts within five minutes or
less, because the aggregation of all momentary interruptions of one or more reclosing
types of interrupting devices, completed within 5 minutes or less that do not result in a
sustained loss of power delivery to one or more customers. Sustained interruption is any
interruption not classified as a part of a momentary event. That is, any interruption that
lasts more than 5 minutes. [4]
2.2. Classification of Power Outages
Power outages are classified under the following headings: [1]

i. Forced outages
ii. Emergency outages

iii. Planned outages

i. Forced outages: These are primarily because of faulty situations in the network, which
are normally initiated by electrical sensing devices called relays. It could also be because
of over loading in a particular branch of the network, which the relay is overseeing. [1]
ii. Emergency outages: As the name implies this type of power interruption is initiated
by qualified personnel under emergencies to avert any danger which may be because of
temporary removal of load (load shedding) or as a result of poor generation. [1]
iii. Planned outages: These are power interruptions, which are initiated by qualified
personnel to carry out maintenance work on their equipment or to connect new
extensions to the existing ones. Similarly, in transmission stations, the bulk transformers,
circuit breakers, isolators, protective and communication equipment are often time
scheduled to be over hauled to enhance their efficiency. [1]
2.3. Forms of Power Outages
A power outage can take any of the following forms: A blackout or full outage whereby
power is lost completely. This is a complete or total loss of service arising from fault on
the power line. Power is automatically restored once the fault is cleared. A brownout is
occurred when the voltage level drops below the normal and permissible limit for the
system. Systems supplied with three-phase electric power suffer brownouts if one or
more phases are absent, or at reduced voltage, or incorrectly phased. Some brownouts,
called voltage reductions, are sometimes allowed to occur in order to avert a full power
outage. A dropout describes a momentary (duration of seconds) loss of power. A load
shedding also called rolling blackout is a way of ensuring that available generation
capacity is rotated among various customers. Load shedding is the rationing of electricity
by the utility company whereby it intentionally reduces the demand for electricity on the
system, usually during periods of peak demand. Partial outage is a curtailment of
electricity‎supply‎due‎to‎a‎utility’s‎public‎appeal‎for‎voluntary‎load‎reduction‎targeted‎to‎a‎
particular end-use. [5]

2.4. Causes and Characteristics of Power Outages
There are many different factors, which may cause outages. Some of these factors are:
(i) Crime (ii) equipment failure (iii) fire (iv) human error (v) operational error (vi) natural
disaster (vii) weather (viii) capacity shortage. [6]
Table 2.1: Power outage characteristics
Characteristic Explanation and Costs

Type of user Who is affected? Outages to public or private sector have different
consequences. The costs of interruptions to hospital, production plant
or household vary.
Moment of Season of the year: Outages during winter are usually worse due to
interruption cold temperatures and darkness. Day of the week: Outages during
weekends are worse for residential customers whereas weekdays for
commercial and industrial sector. Time of the day: Evening outage is
much more disturbing (cooking, lighting) than the middle of the day
ones.
Duration How long does the event last? Few seconds long outages may not be
even noticed by the customer, whereas weeklong outages may beside
other problems cause rioting and hampering security situation in the
affected areas.
Frequency How often do the events occur? Seldom outages may cause chaos
whereas frequent outages change the consumers' consumption
behavior, thus decreases the economic costs. Interruptions that are
more frequent may however increase damage to sensitive equipment.
Advance Do we know in advance? Outages without prior notice are evaluated
notice as the most undesirable. Advance notice allows customers time to
make adjustments that may reduce the incurred costs. But, how much
in advance? (minutes, hours and day ahead?)

Source of Outage due to big storm or supply-demand gap: Failures in the

interruption network usually have only a little effect on the price, whereas if the
outage is caused by the fact that the production capacity is smaller
than the demand, prices tend to rise strongly.
Perceived Do we rely on the electricity provider? The more we rely on the
reliability electricity provider the less likely are we going to take precautionary
level measures (e.g. backup facilities such as diesel generator).
Source: [6]
2.5. Cost of Power Outages
Three categories of impact arise from power outages: (1) Direct economic costs e.g.
restart costs, loss of production, equipment damage, and raw material spoilage. (2)
Indirect economic costs e.g. cost of income postponement, backup facilities cost and
financial cost due to loss of market share. (3) Social impacts e.g. loss of consumer
welfare or discomfort at office/home arising from lack of electricity to power fans, air
conditioners, etc., loss of leisure time, risk of health and safety. Costs to industrial sector
include the direct costs such as spoilage cost, damaged equipments cost, restart cost and
net value of lost production and indirect costs. Adjustment costs due to postponed
production may include extra costs for working over time or changing the shifts schedule.
Back-up facility costs play an important role as well. [6]

Figure 2.1: Reliability and cost relationship

Note that: R* is optimal level of reliability.
2.6. Ethiopian Power Sector
Energy sector in Ethiopia is leaded by Ministry of Water Irrigation and energy (MoWIE).
It supervises three institutes Ethiopian Electric Power (EEP), Ethiopian Electric Utility
(EEU) and Ethiopian Electric Authority (EEA). EEP is responsible for generation &
transmission construction and operation, universal electric access program and export.
EEU is only responsible for distribution and sales whereas electricity and energy
efficiency regulation is carried out by EEA. [7]
The Ethiopian Electric Power sector (being a public enterprise mandated to generate,
transmit, distribute, and sell electricity) generates electricity through two different power
supply systems: the Inter Connected System (ICS) and the Self Contained System (SCS).
The ICS, which is largely generated by hydropower plants, is the major source of electric
power generation. On the other hand, the power generated from SCS system has become

increasingly less. The ICS is advantageous compared to the SCS. In the case of the latter,
there is no chance to use power from other proximity plant when power fails.
Ethiopia is endowed (be gifted) with enormous renewable energy potential of

hydroelectric power, solar energy, wind energy and geothermal energy. Among its major
rivers, nine are suitable for hydroelectric power generation with a total capacity of
15,000-30,000 MW out of 45,000MW total capacity (exploitable reserve). The
geothermal potential is said to be so huge (5,000 - 10,0000MW) that, if adequate finance
is available to develop the sector, it could even be exported to neighboring countries. The
solar energy potential is estimated to 5.5KW/M2/day (annual average daily irradiation).
Despite such facts, however, the country so far managed to utilize a mere 4228 MW (per
hour) of its power generating potential and, hence, only about 56 percent of the
population has geographical access to electricity grid and with 25 % of household
connectivity. [8]
In addition, Ethiopian is usually referred as the powerhouse of Africa because of its

higher hydro potential (45,000MW) which is 20% of total technically feasible potential
of energy in Africa. However, Ethiopia has utilized only less 10 % (i.e.4228MW) of its
potential and the total accessibility of the society is only 56% [8].
Table 2.2: Existing Power plant installed Capacity (in MW) to the national grid
No Power plant Capacity (MW) Total In -service

Hydro diesel geothermal wind data
1 Koka 43.20 - - - 43.20 1960
2 Awash I 32.00 - - - 32.00 1966
3 Awash II 32.00 - - - 32.00 1971
4 Fincha'a 134.00 - - - 134.00 1973/2003
5 Melka Wakena 153.00 - - - 153.00 1988
6 Tis Abay I 11.40 - - - 11.40 1964
7 Tis Abay II 73.00 - - - 73.00 2001

8 Gilgel Gibe 184.00 - - - 184.00 2004

9 Alutto Langano - - 7.30 - 7.30 1999
10 Kaliti - 14.00 - - 14.00 2004
11 Dire Dawa - 38.00 - - 38.00 2004
12 Awasha 7 Kilo - 35.00 - - 35.00 2004
13 Tekeze 300.00 - - - 300.00 Oct-09
14 Gilgel Gibe II 420.00 - - - 420.00 Jan-10
15 Bales 460.00 - - - 460.00 May-10
16 Fincha'a Amerti 97.00 - - - 97.00 Aug-11
Nesh
17 Ashagoda - - - 120.00 120.00 Jan-12
18 Adama I - - - 51.00 51.00 Mar-10
19 Adama II - - - 153.00 153.00 May-15
20 Gibe III 1870 - - - 1870 July-15
Total 3809.6 87 7.3 324 4228MW
Source: [8]
According to [9] report, from 100 million citizens in Ethiopia the Ethiopian power sector
has only about two million customers. The average annual electricity demand was grown
by 13% from 2002 to 2006, where as it is increased by 20% during 2016. The number of
electrified cities and towns were only 6000 during this year. The energy demand is
growing in a much higher rate than the generation capacity due to the following reasons:
population growth, economic growth, living standard growth and technological growth.
[10].
2.7. Effect of Power Interruption on Industry
Electrical interruptions or poor power reliability affect almost all types of industries,
commercial, residential, agricultural and other electrical power customers throughout the

world due to sharp increase in power demand as compare to low increase of power
generation. [11]
The long-term goal of the five-year development strategy, PASDEP (Plan for Accelerated
and Sustained Development to End Poverty), is for Ethiopia to become a middle - income
country in the coming 20 - 30 years. Since Ethiopia is not an oil producing country, it
should achieve this target by strong industrial development. Therefore, a stable supply of
enough energy is necessary for industrialization. However, the access to energy in
Ethiopia was relatively low, as little as 16% in 2005, while the average access rate of
Sub-Sahara Africa was 26%. The access to energy was gradually improved to 56% in
2017 by the efforts of the Ethiopian Power Sector and the GoE (Government of Ethiopia)
by constructing new power plants and expanding the national grid. In addition, some say
that this figure is not reflecting the number of the population who are actually using
electricity. The official number, 56%, is calculated by the population living in the
electrified area (which means the area the national grid reaches) but many of the poor do
not have money to pay the cost for distribution lines from the national grid to their houses
and they are left without electricity. The real access rate of the population that is actually
using electricity is said to be much lower, about 25 %. [8]
“Ethiopia’s‎goal‎is‎to‎transform‎the‎country‎to‎an‎industrialized economy and increase the

per capita income of its citizens to middle-income‎ levels‎ by‎ 2025,”‎ said‎ Lars‎ Christian‎
Moller,‎ lead‎ economist.‎ “Although‎ great‎ progress‎ has‎ been‎ achieved‎ the‎ country‎ must‎
make changes to its burden some tax, trade, and financing rules and improve basic
services such as electricity to support local business and attract new investment [12]. For
Ethiopia, a country graduating through the early stages of economic development,
industrial sector expansion is essential for sustained long-term growth and poverty
reduction,”‎said‎Michael‎Geiger,‎World‎Bank‎senior‎country‎economist. [12]
The impact of electrical power on the growth of industrialization is that the electric power
in particular is considered as the key to industrialization and an engine for the growth and
development [11]. According to EEU report (power system demand forecast) industrial

sector electricity demand will be 46% in 2037 while that of domestic and service will be
18% & 14% respectively. Therefore, through this paper the researcher focuses only on
the industrial sectors, because the electric demand of industrial sector is increasing from
time to time because industrialization development.. [7]
2.8. Power Outage Cost Estimation Methodologies
Various literatures present different methods for the assessment of customer costs of
electric power outages. Some of the major methods are: [13]
 Customer survey methods
 Direct worth
 Stated preferences methods
 Contingent valuation (direct measurement of willingness to pay or
willingness to accept)
 Conjoint analysis( choice method, indirect measurement,
willingness to pay or willingness to accept is estimated by the
researcher, based on the respondents' ranking, rating or choice
between scenarios)
 Preparatory action method
 Market based methods (revealed preferences methods).
 Preventive cost method
 Different electricity tariffs
 "Proxy method" based on market prices
 Production - function methods
 Others methods
 Case studies
 Expert group
 Meta- analysis

2.8.1. Customer Surveys Methods
Customer surveys methods involve of asking questions in order to ascertain the likely
costs of power outages. This method involves one-to-one interviews, e-mail
correspondences and telephone calls. Customers are often asked about the time of day
when the outage occurred (whether during working hours or outside working hours), the
duration of the outage, the time or season of the year (whether summer or winter). The
customer surveys methods are the commonest methodology for calculating outage costs
because it affords more accurate and sufficient outage cost data for planning purposes.
The methods have disadvantages, however of being very costly as it usually involves
reaching out to large number of customers in order to obtain accurate data and reliable
results. Besides, it requires much time and effort to design the survey retrieve and
analyses the respondent data. [5]
There are variations of customer surveys methods as mentioned above. These are:
A. The direct worth (DW)
It is commonly used to estimate the monetary cost of power interruption and the data
collection is based on surveys. Customers are asked to estimate the expenses, which incur
due to a hypothetical or experienced power interruption problems. That means, several
scenarios are presented to the costumers, and the customers have to specify the economic
costs according to the predefined categories.
B. Stated preference methods
i. The Contingent valuation (price proportional method): it involves both the

willingness to pay (WTP) and willingness to accept (WTA) techniques. In WTP, the
survey asks the customers how much they are willing to pay for uninterruptible electricity
supply. However, in WTA, the survey seeks to understand how much the customers are

willing to accept as compensation in case of an interruption in service supply. Studies,

however, show a pattern among the respondents to demand more compensation while
unwilling to pay the amount of money that would otherwise be needed to provide them
with the desired service for the same outage scenario. This causes much disparity
between WTP and WTA results such that it is often advised that WTP and WTA results
be never used in isolation while making outage cost evaluations. [5]
ii. Conjoint analysis: it is other classes of stated preference methods that are based on
customers expressing their preferences for different hypothetical scenarios. Instead of
asking directly for the cost, willingness to pay or willingness to accept for power
interruption problems customers are asked to selected the preferred alternatives between
pairs of hypothetical scenarios, or they may be asked to rank or rate a list of different
hypothetical scenarios. Based on the choices the costs are estimated econometric method.
iii. The preparatory action method (PAM): is a method where the customers are asked
from lists of hypothetical actions, which reduces the consequences of power interruption.
Each action is associated with a given cost. An action can be for instance the purchase of
torch (candle) in households. [13]
2.8.2. Market Based Methods (Revealed Preferences Methods)
Economists have developed a range of approaches to estimates the value of non-market

goods by market-based methods. The most relevant method in this case is the preventive
cost method.
A. preventive cost method: It is the method to estimate how the industrial sectors value
supply interruptions through information on their expenditures on backup facilities,
interruptible contracts and interruption insurances. The level of expenditure on backup
facilities indicates how much industries are willing to pay for a higher level of supply
security. That means, preventive cost method makes use of an observable behavior in
order to estimate the cost of an outage. This power outage cost assessment approach

considers an industrial customer that prefer to rely on back-up generation until a time
when the marginal cost of additional back-up power would equal the expected marginal
cost of an outage event. Such choice by the consumer becomes an evidence of revealed
preference towards avoiding an outage. The methods are widely known to reveal only a
little detail about consumer preferences and sometimes provide only an upper or lower
limit on outage cost estimates. In order to obtain an outage cost, the methods make
numerous assumptions, and usually do not consider such helpful cost assessment factors
like the duration of an outage, time or season of the outage, type of customer, etc. The
preventive cost method should not be confused with the preparatory action method even
if they are related. The main difference is that the preparatory action method asks for the
actions, which are not implemented at the customer whereas the preventive cost method
asks for the cost preventive equipments, which are already installed. [5]
B. Different electricity tariffs: in an ideal word where the electricity customers were
faced with different tariff options depending on the guaranteed quality of supply, the
willingness to pay for the quality could easily be estimated. In reality, however, such
tariff options are not available. However, this method could become more relevant in
future electricity networks and liberalized markets, if more individual electricity tariffs
will be established. [13]
C. "Proxy method" based on market prices: there are some market prices that could
be used as (highly inaccurate) approximations of the cost of power interruption. The less
frequently used proxy method because of their unrealistic assumptions are: the cost of
electricity, taken as an estimate of customers' minimum willingness to pay for reliability
and the depreciation rate of electrical equipments taken as the estimate for the
interruption cost of households. [13]
2.8.3. Production Function Method
The production function expresses the relationship between the output of a good and the
different combinations of inputs used in its production. The production function method
is based on electricity being an input to production, which means that unsupplied electric
power leads to a loss of value creation. It assumes that a firm's value added is directly
proportional to its consumption of electricity. The cost of an interruption is then
measured by the assumed lost production (increased cost of production). [13]
This method uses the ratio of an economic measure (e.g., gross value added) and a
measure of electricity consumption (e.g., kwh) to estimate interruption costs by the
industry. The objective is to find the value of one unit of electricity, also known as the
Value of lost load (VoLL). That means, it is used to determine the value of lost load
(VoLL), that is, the value created by one unit of electricity. [14]
2.8.4. Case Studies
Case studies are usually carried out after large and significant blackouts, as in the case of
the 1977 New York City blackout, and covers both direct and indirect costs of
interruption. Case studies have the advantage of dealing with more accurate data because
the study is conducted soon after a real interruption (not hypothetical scenarios). The
demerits of this method are the study findings from case studies are subject to great
limitations imposed by geographic constraints as well as the characteristics and duration
of the specific outage being studied [5].
2.9. Reviewed Literatures
H. N. Amadi [15] investigated that the consequences of power outage on the socio-
economic life of rural households in Niger Delta region of Nigeria. Primary data were
collected through a semi- structured questionnaire circulated among unemployed youth,
students, housewives, businessmen, and professionals in the area. The study focused on
the relationship between power outage and its impact on the everyday life of the people.
This study adopted a descriptive research design using 1000 randomly selected members
of 44 rural households in the areas mostly affected by incessant power outages. It was
found that stunted economic growth, reduced leisure time as well as heightened

criminality and insecurity are some of the major results of rampant power outages among
rural households in the Niger Delta. He concluded that power outages have severe
negative impact on the social and economic lives of the people. Finally, he found that the
study would help to improve the outlook of rural communities in Nigeria and other
developing countries.
Hachimenum. N. Amadi [16] investigated the causes of incessant power outages in Port
Harcourt City (Nigeria) and suggested remedial measures to reverse the trend. The
researcher relied on data collected from primary sources through personal observations,
interviews and discussions with residents of the City and from secondary sources such as
the National Bureau of Statistics (NBS), the Manufacturers Association of Nigeria
(MAN) and current scholarly literature relating to this research, over a period of twelve
months. In his study, he used a descriptive and the non-parametric simple percentages
technique in analyzing the data so collected and in drawing conclusions. It was found that
inadequate power generating capacity, shortage of gas, weak and dilapidated electrical
transmission and distribution network; inadequate power infrastructure facilities, etc. are
the chief causes of incessant power outages in the Port Harcourt metropolis. In his paper,
he recommended, among others, immediate upgrade of existing power infrastructure
facilities, review of government policy on domestic gas supply and stiff statutory
legislation on vandalism as measures to stabilize electricity supply in the Port Harcourt
city..
Habtamu Endris [17] considered and investigated the impact of power interruption on
capacity utilization at Kality Food Share Company. After conducting interview to
managers of the company and power sector officials, he analyzed that power interruption
was the prominent problem of the company. The study indicated that the company's
production cost and profit level were highly influenced by power interruption.
Martin Cerny [6] determined the economic and social costs of power outages in Gilgit,
Pakistan through survey data collected through face-to-face interviews with 149
residents. Winter heating, cooking during Ramadan and the inability to use fans in

summer represent the main obstacles while expensive back-up facilities such as gaslight
or fuel generators are mainstays of households and businesses. Via contingent valuation
technique, his study provides evidence that Gilgit residents are willing to pay Rs.340
extra, in addition to their monthly electricity bill, to ensure service reliability. Further,
interval and ordered logic regressions were applied to identify the various socio economic
and demographic characteristics, which determine the willingness to pay (WTP) to avoid
outages. He concluded that the ownership of a generator, high electricity bill and the
number of outages have a positive effect on the stated WTP while students and those
whose perceived price of electricity is high are not willing to pay extra.
Peter Aigboviosa Amaize, Abel Ehimen Airoboman and et al [18] studied how poor
power supply to industrial consumers has contributes to the increase of prices of
consumer goods and services in Nigeria thereby affecting the standard of living and thus
placing the average citizenry of the present day Nigeria in a pitiable condition. For the
purpose of this research, they collected relevant data from various operators for a period
of twelve months, the data was analyzed sequentially using spreadsheet analysis and
results were obtained. From the data, it was established that the total monthly cost of
generating power from the industry‎ in‎ question‎ is‎ ₦45,811,859.‎ Further results showed
that if the power generated by the appropriate power utility is used, there would be a 30%
reduction in the cost of generating power thus leading to a corresponding reduction in the
prices of goods by the industry. The paper had therefore shown that increase in the cost
of power generated often lead to a corresponding increase in the prices of goods and
services.
Ariel Goldberg [19] examined the impact of unstable electricity supply on South Africa
retailers. He employed a mixed - method approach a cross three studies. In the first study,
he included a qualitative view of the impact of load shedding through semi - structured
interviews with financial and operational retailers. The second and the third study
contributed toward quantifying the cost of load shedding on the retailer sector by
implementing the subjective evaluation and marginal cost of back up methodologies
respectively. He captured the result of the first study in a model, which highlights the

major paint points experienced by retail industry due to load shedding. From the second
study, he indicated that R13.72 billion rand was lost in revenue for the first six months of
2015. His third study results indicated that conservative estimate of R 716 million had
been invested by the retailers in backup generation power during the same period.
Wasim Saleem and Hafiz A.Pasha [20] analyzed in their study the impact and cost of
the high level of power load shedding to domestic consumers in 2012 by a survey based
approach. They developed a methodology for quantification of the cost of outages by
deriving the utility loss, cost of self-generation and other costs incurred. Overall, the total
outage cost to residential consumers in the urban areas of Pakistan was estimated at close
to Rs 200 billion. They determined the willingness to pay more for uninterrupted electric
supply and finally they made policy recommendations that enable to mitigate the impact
of load shedding on domestic consumers.
Owusu Amponsah and Imoro Braimah [21] examined the causes and effects of the
frequent and unannounced electricity blackouts on the operations of micro and small-
scale industries (MSI) in Kumasi, Ghana. Data from a sample of 320 MSI selected from
three industrial clusters in the Kumasi metropolis, revealed that the frequent and
unannounced blackouts have caused a deficit of about 5.3% in the quantity of electricity
they required for continuous operations. The blackout hours were estimated to last for an
average of 10.3 hours per month. Because of the blackouts, about 44% of the MSI spent
this duration in redundancy because of lack of alternative sources of electricity but
maintained the same labor cost. The remaining 56% of the MSI obtained power from
alternative sources which required an average of GH¢15.5 per month to run. At the end,
they concluded that uninterrupted electricity supply is vital for the effectiveness of the
MSI.

CHAPTER THREE
3. POWER INTERRUPTION DATA AND ITS COST ANALYSIS
The data and information gathered from the industries and power sectors were analyzed
in order to assess the power interruption impact on the industries. Both the direct and
indirect costs of the industries were estimated using the mathematical model developed.
That means, mathematical model were used to analyze the relationships between cost in
birr and the unit of energy (in kwh) that the industries lost because of power outages.
The mathematical model for the direct cost due to power outages incurred by each of the
industry is given by [22]:
... (3. 1)
The total direct cost is given by the sum of direct cost of each industry. That means,
+ + + ... (3. 2)
Where:
= Total direct cost incurred by each industrial consumer
= Cost of damaged material
= Cost production output lost
= Cost of labor lost
= Cost of damaged equipments
= Cost of equipments repair
= Cost of restart
= Total number of industries selected for the study
The cost per unit of electric energy (Cel) or unit cost in kwh lost is expressed as:
... (3. 3)
Where:

= Total unit of electric energy in kwh lost due to power outages.

For industrial consumers with back up facilities, new mathematical model is designed for
the total captive (indirect) cost, which is derived from cost of back up facilities (self-
power generation cost). The total captive cost or cost of back up facilities of each
industry is expressed mathematically as:
... (3. 4)
... (3. 5)
The cost per unit of electric energy (unit cost) generated by back up plant (Cebp) is
expressed as:
... (3. 6)
Where:
= back up facilities cost
= purchase or capital cost of back plant
= depreciation factor of back plant (assumed per annum)
= annual maintenance cost of back up plant
=annual cost of fuelling back up plant
= Total units of electrical energy, in Kilowatt-hour, generated by backup plant per
annum.
= Total number of industries selected for the study
Therefore, for those industrial consumers without backup facilities the direct cost
mathematical model is applied. However, for those industries having backup facilities the
indirect cost mathematical model is used. There are also some industries, which are
affected by both direct and indirect cost and industries, which use partial back up
facilities. For such industries, the two models are used simultaneously to estimate the
cost. For these types of industries, the cost per unit of electric energy (Cun) in kilowatt-
hour lost (birr/kwh) is expressed as:
... (3. 7)

The total cost incurred in birr due to power outages (Tcpo),

... (3. 8)
3.1. Analyzing Interruption at the Substation
According to sebeta one substation document report (recorded data from signal on panel
board), the main causes of interruptions at the substation are short circuits, earth faults,
operational request, under frequency and overloading.
A. Short circuits
These are due to some kinds of abnormal conditions in power systems or substation .It
may be caused due to internal or external effects. The internal effects are caused by
breakdown of equipments or transmission lines from deterioration of insulation in the
systems or equipments such as transformers, breakers etc. Such troubles may be due to
ageing of insulation, inadequate design or improper installation. The external effects
causing short circuits includes insulation failure due to lighting surges, overloading of
equipment causing excessive heating and mechanical damage, animals line contact
,weather condition (storm) and etc. Hence, due to this short circuit effects, the current in
the system increases to an abnormally high value while the system voltage decreases to a
low value. So due to this detrimental effects of short circuits ,it is desirable and necessary
to disconnect the faulty section (which is associated with power interruption) and restore
normal voltage and current conditions as quickly as possible.
B. Earth faults
Earth fault is a fault on power system network where a single-phase line or multiple
phase lines make contact to the earth directly or through impedance. This is due to
insulation failure, trees or bushes contact with the network.

C. Operational request
Interruption due to operational request (at substation, or on line) is for the sake of safety
during maintenance and rehabilitation work on the system, lines and equipments.
D. Under frequency
In stable power system, the generator control system maintains system frequency very
close to 50 Hz. However, sudden or large changes in generating capacity due to the loss
of large generator or tie line cause a severe generation (under voltage) or load imbalance,
resulting in frequency decline. This cause automatically loads shedding or power
interruption on the system.
E. Overloading
Overload is when the power system is subjected to voltages and/or current that exceeds
its design specification due to increase in load (loading effect). During this condition,
excess heat will causes the insulation system to break down, resulting in damaged power
system equipments such as transformers, fuses and etc. Therefore, over loading of the
power system ultimately causes power interruption on the customers.
3.1.1. Analyzing Power Interruption of all Feeders at the Substation
The substation fault data (interruption data) of all feeders is recorded each day in time
interval. So, the summarized or manipulated data is shown in the following tables. The
collected data includes interruption duration and frequency of each 13 feeders (active
feeders) at the substation for one year (during 2017 G.C).

Table 3.1: Interruption duration and frequency of each 13 feeders at the substation for
one year (during 2017 G.C)
Feeders Reason Frequency % Duration of % Total interruption

of of interruption Frequency Duration
interruption interruption (in hr) (in hr)
OP 55 39.56 59.117 31.70
SCS 21 15.10 33.3 17.86
F1 EF 54 38.84 80.28 43.06 139 186.43
UF 2 1.44 4.38 2.351
OL 7 5.03 9.35 5.01
OP 82 14.08 73.99 29.50
SCS 252 43.29 104.44 41.64
F2 EF 226 38.83 68.84 27.44 582 250.8
UF 0 0 0 0
OL 22 3.78 3.54 1.41
OP 74 27.00 70.93 45.78
SCS 45 16.42 38.19 24.65
F3 EF 155 56.57 45.78 29.55 274 154.9
UF 0 0 0 0
OL 0 0 0 0
OP 75 29.41 70.69 48.34
SCS 32 12.55 22.68 15.50
F4 EF 120 47.05 37.15 25.40 255 146.25
UF 17 6.66 11.61 7.94
OL 11 4.31 4.09 2.80
OP 28 58.33 39.51 64.94
SCS 17 35.41 20.95 34.42
F5 EF 3 6.25 0.38 0.63 48 60.85
UF 0 0 0 0
OL 0 0 0 0
OP 57 43.18 61.48 41.11
SCS 18 13.63 28.18 18.84
F6 EF 57 43.18 59.86 40.03 132 149.53
UF 0 0 0 0
OL 0 0 0 0
OP 105 34.20 91.83 38.30
SCS 102 33.22 91.11 38.00
F7 307 239.75
EF 100 32.57 56.79 23.69
UF 0 0 0 0

OL 0 0 0 0
OP 43 39.45 32.49 51.02
SCS 7 6.42 19.91 31.26
F8 EF 59 54.13 11.28 17.71 109 63.69
UF 0 0 0 0
OL 0 0 0 0
OP 45 33.08 53.19 47.60
SCS 49 36.03 19.61 17.55
F9 EF 42 30.88 38.95 34.85 136 111.76
UF 0 0 0 0
OL 0 0 0 0
OP 108 40.75 80.86 31.05
SCS 41 15.47 103.73 39.83
F10 EF 111 41.88 75.49 28.98 265 260.44
UF 0 0 0 0
OL 5 1.88 0.35 0.13
OP 121 26.30 102.74 29.48
SCS 110 23.91 103.21 29.62
F11 EF 204 44.34 130.79 37.53 460 348.45
UF 25 5.43 11.71 3.36
OL 0 0 0 0
OP 134 43.50 107.38 35.48
SCS 72 23.37 144.36 47.69
F12 EF 100 32.46 49.11 16.22 308 302.66
UF 0 0 0 0
OL 2 0.649 1.8 0.59
OP 143 37.33 121.95 38.60
SCS 74 19.32 67.76 21.45
F13 EF 165 43.08 125.90 39.85 383 315.86
UF 0 0 0 0
OL 1 0.261 0.25 0.08

3.1.2. Analyzing Power Interruption of F2 & F11 at the Substation
According to the substation fault record report, the power interruption duration and
frequency on feeder, F2 (Yes plc feeder) and feeder, F11 (oxford plc feeder) for the past
one year, (2017 G.C) is summarized after many manipulation and indicated in the
following tables.
Table 3.2: power interruption duration and frequency on feeder, F2 (Yes plc feeder) for
the past 12 months (2017 G.C)
Months of Reason Frequency % Duration of % Total interruption

interruption of of interruption Frequency Duration
OP 9 27.3 4.55 29.6
SCS 13 39.4 10.03 65.3
January
EF 11 33.3 0.78 5.08 33 15.35
UF 0 0 0 0
OL 0 0 0 0
OP 4 10 2.77 17.37
SCS 25 62.5 10.1 63.32
February EF 11 27.5 3.08 19.31 40 15.95
UF 0 0 0 0
OL 0 0 0 0
OP 5 11.9 3.83 14.07
SCS 8 19.0 8.83 32.45
March EF 29 69.0 14.55 53.4 42 27.21
UF 0 0 0 0
OL 0 0 0 0
OP 9 22.5 2.11 22.04
SCS 22 55.0 1.37 14.31
April EF 9 22.5 6.08 63.53 40 9.57
UF 0 0 0 0
OL 0 0 0 0
OP 9 23.0 10.95 57.54
May SCS 22 56.4 7.58 39.83 39 19.03
EF 8 20.5 0.5 2.6

UF 0 0 0 0
OL 0 0 0 0
OP 6 16.6 7.51 55.58
SCS 9 25 0.83 6.14
June EF 21 58.3 5.16 38.19 36 13.51
UF 0 0 0 0
OL 0 0 0 0
OP 6 10.9 7.3 19.26
SCS 22 40.0 17.1 45.11
July EF 27 49.1 13.5 35.62 55 37.9
UF 0 0 0 0
OL 0 0 0 0
OP 12 17.9 13.17 37
SCS 29 43.3 12.2 34.27
August EF 21 31.3 10 28.1 67 35.6
UF 0 0 0 0
OL 5 7.46 0.3 0.84
OP 7 10.3 2.92 12.7
SCS 34 50 14.68 63.8
September EF 25 36.7 5.38 23.38 68 23.01
UF 0 0 0 0
OL 2 2.9 0.11 0.5
OP 2 3.77 3.25 20.7
SCS 27 50.9 8.27 52.74
October EF 23 43.4 4.04 25.7 53 15.68
UF 0 0 0 0
OL 1 1.88 0.116 0.74
OP 10 18.5 11.5 44.1
SCS 24 44.4 10.45 40.1
November EF 20 37.0 4.1 15.7 54 26.05
UF 0 0 0 0
OL 0 0 0 0
OP 3 5.45 4.13 34.9
SCS 17 30.9 3 25.38
December EF 21 38.2 1.67 14.13 55 11.82
UF 0 0 0 0
OL 14 25.4 3.01 25.46

Table 3.3: The total power interruption duration and frequency of feeder, F2 (Yes plc
feeder) for the past one year, 2017 G.C.
Year of Reason Frequency % Duration of % Total interruption

OP 82 14.1 74 29.5
SCS 252 43.3 104.34 41.6
2017 EF 226 38.8 68.8 27.44 582 250.68
UF 0 0 0 0
OL 22 3.78 3.54 1.41
Table 3.4: The monthly average power interruption duration and frequency of feeder, F2
(Yes plc feeder) for the past one year, 2017 G.C.

OP 6.83 14.1 6.16 29.5
Monthly SCS 21 43.3 8.7 41.6
average EF 18.83 38.8 5.73 27.44
48.5 20.89
interruption UF 0 0 0 0
in 2017 G.C OL 1.83 3.78 0.3 1.41
Table 3.5: Power interruption duration and frequency of feeder, F11 (Oxford plc feeder)
for the past 12 months of 2017 G.C
Months of Reason Frequency % Duration of % Total interruption

OP 9 26.4 7.1 70.9
SCS 5 14.7 1.42 14.18
January EF 19 55.9 0.91 9.1 34 10.01
UF 1 2.9 0.58 5.8
OL 0 0 0 0
February OP 6 23 1.97 7.9 26 24.91

SCS 8 30.7 0.98 3.9

EF 10 38.5 21.55 86.5
UF 2 7.7 0.416 1.65
OL 0 0 0 0
OP 18 28.6 12.15 46.64
SCS 4 6.35 3.62 13.9
March EF 39 61.9 9.62 36.9 63 26.05
UF 2 3.17 0.67 2.57
OL 0 0 0 0
OP 15 30.6 13.17 33.4
SCS 10 20.4 16.78 42.55
April EF 21 42.9 9.03 22.9 49 39.43
UF 3 6.12 0.45 1.14
OL 0 0 0 0
OP 7 25 9.53 41.04
SCS 11 39.2 12.85 55.34
May EF 8 28.5 0.533 2.3 28 23.22
UF 2 7.1 0.3 1.3
OL 0 0 0 0
OP 9 22.5 9.8 42.24
SCS 13 32.5 6.57 28.3
June EF 18 45 6.83 29.44 40 23.2
UF 0 0 0 0
OL 0 0 0 0
OP 7 21.8 4.48 9.56
SCS 11 34.4 17.92 38.23
July EF 14 43.8 24.47 52.21 32 46.87
UF 0 0 0 0
OL 0 0 0 0
OP 14 35 14.67 51.86
SCS 6 15 3.68 12.7
August EF 18 45 9.47 36.2 40 28.28
UF 2 5 0.46 1.6
OL 0 0 0 0
OP 9 21.9 9.62 18.55
SCS 15 36.6 18.9 36.45
September 41 51.85
EF 17 41.5 23.3 44.93
UF 0 0 0 0
October OP 4 9.7 3.33 16.68 41 19.96

SCS 13 31.7 1.01 5.06

EF 20 48.7 14.07 70.5
UF 4 9.7 1.55 7.76
OL 0 0 0 0
OP 12 38.7 6 17.77
SCS 9 29 17.58 52.05
November EF 6 19.3 7.15 21.17 31 33.77
UF 4 12.9 3.05 9.03
OL 0 0 0 0
OP 11 31.4 10.92 52.25
SCS 5 14.3 1.9 9.1
December EF 14 40 3.85 18.42 35 20.9
UF 5 14.3 4.23 20.24
OL 0 0 0 0
Table 3.6: The total power interruption duration and frequency of feeder, F11 (Oxford plc
feeder) for the past one year, 2017 G.C.

OP 121 26.3 102.74 29.48
SCS 110 23.9 103.21 29.61
2017 EF 204 44.3 130.8 37.53 460 348.56
UF 25 5.43 11.71 3.36
OL 0 0 0 0
Table 3.7: The monthly average power interruption duration and frequency of feeder, F11
(Oxford plc feeder) for the past one year, 2017 G.C.

interruption interruption (in hr) (In hr)
Average OP 10.1 26.3 8.56rs 29.48
monthly SCS 9.17 23.9 8.6 29.61
interruption EF 17 44.3 10.9 37.53 38.33 29.05
in 2017 GC UF 2.1 5.43 0.97 3.36
OL 0 0 0 0

3.2. Data Analysis Methodology for Yes Plc
As stated above, in literature review there are different methods for the assessment of
customer costs of electric power outages. Preventive cost method makes use of an
observable behavior in order to estimate the cost of an outage. This power outage cost
assessment approach considers an industrial customer that prefer to rely on back-up
generation until a time when the marginal cost of additional back-up power would equal
the expected marginal cost of an outage event. Such choice by the consumer becomes an
evidence of revealed preference towards avoiding an outage. The researcher used
preventive cost method (revealed preferences method) as cost estimation methodology
for yes plc because the industry relies on back up arrangement during power interruption.
3.3. Power Interruption Cost Analysis of Yes Plc
The data used for analysis was collected through direct interview of the operators,
technicians, technologist and document review including browsing internet. Then after
the maintenance cost, fuelling cost, damaged equipment cost, fuel consumption rate and
depreciation cost were organized as follows.
The Yes Brands Foods & Beverages Plc incurred both direct cost (costs result from the
interruption of supply e.g. damaged equipments) and indirect cost (costs result from
responses to that interruption e.g. back up arrangement cost). The Yes Brands Foods &
Beverages plc has one 2250kVA C2250D5 standby diesel fired generator with a power
factor of 0.8, which gives a real power supply of 1800KW. During power interruption,
the generator is running at 35% loading capacity. In order to get reliable power supply
from the generator during utility power interruption an adequate maintenance is required.
Generally, maintenance (service) is carried out at 250hrs operating hour interval. That
means at 250hrs operating hour, 500hrs operating hours and etc. The former (at 250hrs)
requires the complete changing of the water separator, the fuel filter and cleaning the air
filter and other parts of the generator while the later (at 500hrs) included all activities of

the former in addition to changing the oil filter as well as draining the used oil and filling
the generator with new oil.
During power interruption, the generator is running at 35% load capacity. Thus, it is
expected from the generators to supply a real power of 630kw to the load. In 2017 G.C,
the generator has delivered 160,667kwhrs of energy to the load (data from generator
controller). According to the website called diesel service and supply the approximate
fuel consumption of a diesel generator based on the size of the generator and the load
(at which the generator is operating) is given as follows. [23]
Table 3.8: Approximate fuel consumption chart of diesel generator
Generator Size 1/4 Load 1/2 Load 3/4 Load Full Load
(kW) (gal/hr) (gal/hr) (gal/hr) (gal/hr)
20 0.6 0.9 1.3 1.6
30 1.3 1.8 2.4 2.9
40 1.6 2.3 3.2 4
60 1.8 2.9 3.8 4.8
75 2.4 3.4 4.6 6.1
100 2.6 4.1 5.8 7.4
125 3.1 5 7.1 9.1
135 3.3 5.4 7.6 9.8
150 3.6 5.9 8.4 10.9
175 4.1 6.8 9.7 12.7
200 4.7 7.7 11 14.4
230 5.3 8.8 12.5 16.6
250 5.7 9.5 13.6 18
300 6.8 11.3 16.1 21.5
350 7.9 13.1 18.7 25.1
400 8.9 14.9 21.3 28.6
500 11 18.5 26.4 35.7

600 13.2 22 31.5 42.8

750 16.3 27.4 39.3 53.4
1000 21.6 36.4 52.1 71.1
1250 26.9 45.3 65 88.8
1500 32.2 54.3 77.8 106.5
1750 37.5 63.2 90.7 124.2
2000 42.8 72.2 103.5 141.9
2250 48.1 81.1 116.4 159.6
However, according to data from 2250kVA C2250D5 standby diesel fired generator
manual the fuel consumption at different load level is as follows:
Table 3.9: Fuel consumption of yes plc standby generator at different load level
C2250 D5 generator 1/4 Load 1/2 Load 3/4 Load Full Load
Size (L/hr) (L/hr) (L/hr) (L/hr)
Standby (2250KVA) 138 229 328 437
Prime (2000KVA) 114 200 291 394
a. Maintenance and labor cost.
The lubrication oil capacity of the generator is 280 liters for standby and 397 liters for the
prime one. C2250 D5 diesel generator uses three primary fuel filters, two secondary fuel
filters and four oil/lubrication filters. The generator was serviced two times in a year at
230 operating hrs for first time and at 458 operating hour for the second time. The
company gave the generator overall service or maintenance to external organization with
an agreement of 10,000 birr/year.

Table 3.10: Cost of maintenance item & labor per year
S/N Item Description Quantity Amount Total

(birr) (birr)
1 WF2075 Element 4 (2 per services) 584.77 2,339.08
(fuel filter)
2 FS1006 Element 6 (3 per services) 1,834.04 11,004.21
(fuel filter)
3 LF9050 Element 4 (during 2nd service ) 1,340.39 5,361.56
(oil filter)
4 SAE 15- Five liters 56 jug (280ltrs during 359.20/jug 2,0114.94
40 jug oil 2nd service )
5 Servicing - - - 10,000
labor
Total 48,819.79
b. Depreciation cost
If the backup plant were to last forever, there would not be the depreciation cost.
However, in actual practice, backup power plant has its own useful life. From the time
the generator has installed, it has deteriorated due to wear and tear so that there is a
gradual reduction in the value of the plant.
Due to depreciation, the equipment has to be replaced by the new one after its useful life.
Therefore, suitable amount must be set aside every year so that by the time the generator
retires, the collected amount by way of depreciation equals the cost of replacement. So,
while determining the cost of generation, annual depreciation (the cost incurred due to the
reduction in the value of the standby generator) must be included.

Table 3.11: Stand by generator charge data.
No Description Charge (in birr)

1 ALC amount 7,708,568.65
2 Air filiting charge 100,030.66
3 Custom duty 5,275
4 Warehouse charge 27,426
5 Land transportation 89,309.28
6 Insurance 9,401.70
7 Transit cost 3,000
8 Photocopy stump 453.21
9 Bank charge 154,965.39
10 Vat 411,390
11 Total with vat 8,509,819.89
There are three types of depreciation cost evaluation methods.
i. Straight line method
In this method, a constant depreciation charge is made every year based on total
depreciation and the useful life of the property. It is given by:
... (3. 9)
Where:
p = Initial cost
s = Salvage cost
n = Useful life

ii. Diminishing value method
Based on this method, depreciation charge is made every year at a fixed rate on the
diminished value of the equipment. In other words, depreciation charge is first applied to
the initial cost of equipment and then to its diminished value.
iii. Sinking fund method
According to this method, a fixed depreciation charge is made every year and interest
compounded on it annually. The constant depreciation charge is such that total of annual
installments plus the interest accumulations equal to the cost of replacement of equipment
after its useful life.
Depending on the standby generator data from the industry, the diminishing value
method is used for the depreciation cost evaluation. Since the generator has been installed
one & half years ago it is better to calculate and use first year depreciation cost, which is
given by:
... (3. 10)
Initial cost (p) = 8,509,819.89 (from the table)

Salvage cost (s) = 323,373.156 (Assuming 3.8%)
Useful life (n) = 35 years (Assuming the generator life time will be ended after 35 years)
The annual unit depreciation (x) is given by:
... (3. 11)
From equation (3.10),

Alternatively, first year depreciation cost is the initial cost minus value of equipment after
one year. Value of equipment after one year is given by:
... (3. 12)
Therefore, the annual depreciation cost of the standby generator is given by:
... (3. 13)
c. Fuel consumption cost
The generator fuel consumption depends on load on the generator (refer table 3.8). Since
the generator load capacity of the industry (yes Plc) is approximately at 35%, by taking
the average consumption at 25% and 50% load capacity the generator fuel consumption
will be 183.5 l/hr approximately (nearly at 37.5% load capacity).
Table 3.12: Cost of fuelling generator
Consumption Rate Volume consumed Cost per liters Total cost

(liters) (birr) (birr)
Hourly consumption 183.5 16.35 3,000.225
Yearly consumption 84,978.85 16.35 1,389,404.19
(for 463.1 hrs)
d. Damaged equipments cost
The power interruption is associated with instability, which is dangerous to stability

sensitive equipments. That is why the automatic protective devices/switches cut power
before dangerous damage. Table 3.13 shows the list and cost of damaged equipment
during power interruption in one year.

Table 3.13: Damaged equipment cost.
S/N Item Description Quantity Amount Total (birr)

(birr)
1 1P 6ES7 321-1BP00-0AA0 PLC input Two 11,120.06 22,240.12
SC-B1UN6130 module
2 1P 6ES7 322-1BP00-0AA0 PLC output Two 25,264.24 50,528.49
SC-B2T23534 module
3 VIPA 315-2AG12 PLC CPU Two 53,254.24 106,508.52
VIPA CPU 315SB
Total 179,277.13
Therefore, the total cost incurred by Yes plc due to unreliable power supply (power
interruption) were generator maintenance cost, depreciation cost, fuelling cost and
damaged equipment cost. These give a total cost of 2,374,874.8175 birr per year.
3.3.1. Indirect Cost (Self-Generating Cost)
The cost of generating 1kwh of electricity by the industry is given as:
... (3. 14)
... (3. 15)
3.3.2. Direct Cost (Cost due to Damaged Equipments)
... (3. 16)

Therefore, the total cost per kwh of the industry is the sum the indirect and the direct cost
(i.e 13.6655 birr/kwh plus 1.1158 birr/kwh = 14.78 birr/kwh).
3.3.3. Utility Cost
The power supply utility also incurred a cost (lost revenue) due to unsupplied energy for
the industry. The power utility supply 1kwh of electric energy for yes plc at a cost of
0.5778 birr/kwh (electric rate). Hence, the power utility lost 0.5778 birr/kwh during
power interruption due to unsupplied energy.
... (3. 17)
... (3. 18)
3.3.4. Overall Cost
The overall cost that the industry (yes plc) and the power utility incurred is the sum
2,374,874.8175 birr and 92,833.4 birr (2,467,708.21 birr) per year. The total unit cost in
birr per kwh of the two sectors (yes plc and power utility) is 14.78 plus 0.5778
(15.3578 birr/kwh).
3.4. Oxford Plc Data Analysis Methodology
Among different cost estimation methodologies stated in the literature review section the
production function method was used as the cost analysis methodology for this industry.
The production function method is based on electricity being an input to production,
which means that unsupplied electric power leads to a loss of value creation. It assumes
that a firm's value added is directly proportional to its consumption of electricity. The

cost of an interruption is then measured by the assumed lost production (increased cost of
production). Industry damage function (IDF) is defined as the ratio of the value added for
a certain customer for a given time of period to the annual energy consumption
corresponding to that time of period. The industry damage function (IDF) shows the
economic loss incurred by the industries due to power outages (in birr/kwh). Analytical
data such as annual energy consumption, load duration and value added data are used to
estimate the CIC.
3.5. Power Interruption Cost Analysis of Oxford Plc
The industry detail information or data used for analyzing its power interruption cost is
collected as follows:
a. Industry operation duration
The industry operation duration is 7200hrs (300 days) per year considering 13 holidays
and 52 Sundays when the company is not operating. In addition, the industry is not
operating for 348.56hrs interruption duration per year. The power interruption frequency
encountering the industry is 460 times a year as indicated in table 3.6. Even, after power
restoration there is a production delay of 10 - 15 minutes that leads to restarting cost of
the industry. The delay is due to the operation machine re-heating and preparation.
Therefore, in average the machine restarting duration is 12.5 minutes because there is a
time when power is restored immediately or delayed for a time. Hence, the additional
annual restarting duration will be the product of annual interruption frequency and
average restarting duration (460 x 12.5 minutes, which gives 95.83hrs per year). As a
result, the industry is not operating for duration of 444.39 hrs per year. Note that the
power interruption length of occurrence (total annual power interruption duration per
total annual interruption frequency, 348.58hrs/460) is 0.757 hr/frequency or
45.46minutes/frequency.

b. Raw material cost
The main raw material required for production of poly propylene woven bag or sack are
polypropylene resin, also ink and solvent are auxiliary materials for printing purpose.
Annual requirement and related cost of the raw materials at full capacity operation is
shown in table below.
Table 3.14: Annual raw material requirements and its cost
No Item Consumption Unit cost (birr/ton) Total cost

per year (br)
1 Poly propylene resin 11,454 ton 25,600 293,222,400
2 Solvent 109 ton 30,400 3,313,600
3 Ink 54.5 ton 44,000 2,398,000
4 Sewing yarn 4.5ton 20,000 90,000
Total raw material cost per year 299,024,000
c. Utility cost
The main utilities of the company are electricity and water. The annual consumption of
these utilities and its related costs at full production capacity of the plant is shown below.
Table 3.15: Annual utilities cost
No Item Consumption/year Unit cost (birr) Total cost (birr)

1 Electricity 954,608kwh 0.5778 551,572.5
2 Water 90,909.9 m3 10 909,090.9
Total annual utility cost 1,460,663

d. Labor cost
Table 3.16: Human resource (HR) and labor cost
No Position & Title No of HR Salary/month Salary/year

1 Plant manager 1 8,000 96,000
2 Production manager 3 5,600 201,600
3 Administration and finance 1 4,500 54,000
4 Secretary 3 2,500 90,000
5 Accountant & sales 13 3,000 468,000
6 Cashier 2 1,800 43,200
7 Clerk 3 800 28,800
8 Electricians 6 2,200 158,400
9 Mechanics 9 2,200 237,600
10 Guards 6 600 43,200
11 Drivers 13 1,400 218,400
12 Yarn making team leader 3 3,800 136,800
13 Operators-yarn making 36 1,400 604,800
14 Weaving team leader 3 3,800 136,800
15 Operators-weaving 152 1,400 2,553,600
16 Sewing, cutting & printing team 3 3,800 136,800
leader
17 Operators-cutting & printing 54 1,200 777,600
18 Operators-bags/ sacks sewing 58 800 556,800
19 Packing and inspection team leader 3 3,800 136,800
20 Packing and inspection 48 700 403,200
21 Recycling processes 22 800 211,200
22 Total 442 54,100 7,293,600
23 Benefits and allowance of employment 20% 10,820 1,458,720
Total annual labor cost 8,752,320

e. Production cost
At full operation capacity, the annual production cost of the plc is indicated as follow.
The major components of the production cost are raw material, depreciation, financial
cost, labor, and utility.
Table 3.17: Annual production cost at full operating capacity.
Item Costs (in birr) Percentage

Input Raw Material 299,024,000 87.33
Labor cost 8,752,320 2.55
Utilities 1,460,663 0.42
Maintenance and repair 1,972,727 0.576
Administration cost 1,136,363 0.33
Cost of marketing & distribution 2,272,727 0.66
Total operating costs 314,618,800 91.89
Depreciation 14,510,219 4.24
Cost of finance 13,262,090 3.87
Total Production Cost 342,391,109 100
3.5.1. Oxford Plc Outage Cost
a. Actual power interruption cost
The cost that the industry incurred due to actual power interruption without including the
restarting cost is estimated as follows:
As the value added per year (in birr), the annual energy consumption (in kWh) and the
load duration (7200hrs) are known the value added per hour can be calculated easily.
... (3. 19)

Where, t is the annual interruption duration of oxford plc.

In an industrial facility, when there is continuity of supply, consequently, there is
continuous production. That means, industrial production leads sales and that creates
value added. Moreover, this production is linearly related to the value added that the
facility produces. To illustrate: Continuous electric power ~ Production ~ Value added
After calculating, the Value added per t hour, the function is divided by annual energy
consumption of the corresponding customers to get new function, IDF or CDF, which is
give by:
in birr/kwh ... (3. 20)
Substituting the value added for t hours from equation 3.19:
in birr/kwh
Hence, in birr/kwh
Here, the value added per year should be determined first.

The total production cost of the industry is 342,391,109, which is equivalent to the value
added per year and the annual energy consumption of the industry is 956,604kwh. Hence,
Cost due to value added = in birr/kwh
Hence, cost due to value added = in birr/kwh
= 17.36 birr/kwh
(Note that 348.56hrs is the interruption duration in one year or 365 days. In
addition, is the value added during the annual interruption duration
(348.56hrs) because the annual value added (during 300days or 7200hrs) is 342,391,109
birr. Alternatively, the industry unit cost can be calculated from the value added lost and
unsupplied energy during interruption duration as follows:
in birr/kwh ... (3. 21)

b. Restarting cost
An industry is defined as an enterprise who manufactures products using different inputs

combination. As electricity is one of the inputs of production, its operations are highly
sensitive to power interruption. A momentary power outage can shutdown-manufacturing
operation for several minutes. Even, during power restoration of the industry there is a
production delay of about 10 - 15 minutes that leads to restarting cost of the industry. The
delay is due to operation machine re-heating and preparation. Because of production set -
up time the industry incurred additional cost called restarting cost.
in birr/kwh (...from eqn.3.20)
in birr/kwh
Where, t is the annual restarting duration of oxford plc, which is given by 95.83hrs.
in birr/kwh
Hence, in birr/kwh
Therefore, the total unit cost that the industry incurred due to actual power interruption
and restarting duration is the summation of the unit cost due to actual power interruption
and restarting process. Hence, the industry unit cost will be 22.13 birr/kwh (17.36
birr/kwh + 4.77 birr/kwh).
3.5.2. Utility Cost
The power supply utility also incurred a cost (lost revenue) due to unsupplied energy to
the industry. The power utility supply 1kwh of electric energy for oxford plc at a cost rate
of 0.5778 birr/kwh (electric rate). Hence, the power utility lost 0.5778birr/kwh during
power interruption due to unsupplied energy. From equation (3.17):

(Since the energy consumption of the industry (for 7200 hrs duration) is 954,608kwh, the
unsupplied energy for the duration of 348.56hr will be 46,213.63kwh.
3.5.3. Overall Cost
The cost that the industry incurred due to unsupplied energy and restarting process
(which is associated with power interruption) will be:
a. Actual power interruption cost due to unsupplied Energy: it is the product of unit
outage cost and unsupplied energy. That means,
b. Restarting cost: it is the product of unit restarting cost and unsupplied energy because
the cause of restarting cost is power interruption or energy not supplied. That means,
Hence, the total cost that the oxford plc
incurred is the sum of actual power interruption cost and restarting cost
(
Therefore, the overall cost that the industry (oxford plc) and the power utility incurred is
the sum of 1,022,707.61birr and 26,748 birr (1,049,455.61 birr) per year. The total unit
cost in birr per kwh of the two sectors (oxford plc and power utility) is 22.13 plus 0.5778
(26.9birr/kwh).
3.6. Mitigation of the Cost Incurred by Industries
The cost incurred by the industries due to power interruption can be mitigated by taking
different measures: These are:
1. Rearranging the substation feeders serving the industries
2. Arranging backup system or standby generators

3. Installing ATS, UPS and AVR in addition to standby generators
3.6.1. Rearranging the Substation Feeders
As it is indicated in figure 4.1 or table 1.1 the interruption frequency of yes plc feeder
(F2) and the interruption duration of oxford plc feeder (F11) are the highest. Due to the
consequence, higher cost is incurred by the industries. However, the interruption duration
and frequency of feeder five are the least because the feeder is the dedicated line (not
interconnected with other nearby loads) that is given only to welia steel industry plc. The
monthly average power interruption duration and frequency of feeder F5 are 5.07hrs and 4
times respectively. Therefore, since the welia and oxford plc are located at the same area
if the substation feeders' rearrangement is done the cost incurred by the industry will be
decreased. Similarly, on its way welia plc feeder is passing nearby yes plc. Hence, if the
feeder configuration is also done for yes plc the cost incurred by the plc will be reduced.
A. Oxford plc actual interruption cost after feeders rearrangement.
in birr/kwh ... (From eqn.3. 22)
From equation 3.19 the value added for t hours is given by:
in birr/kwh
Where: t is the annual interruption duration of feeder five (
Hence, in birr/kwh
The total production cost of the industry is 342,391,109, which is equivalent to the value
added per year and the annual energy consumption of the industry is 956,604kwh. Hence,
Cost due to value added = in birr/kwh
Hence, cost due to value added = in birr/kwh

= 3.03 birr/kwh
B. Oxford plc restarting cost after feeders rearrangement
in birr/kwh (...from eqn.3.20)
in birr/kwh
Where, t is the annual restarting duration of oxford plc, which is given by (48 * 12.5min
= 600min or 10hrs).
in birr/kwh
Hence, in birr/kwh
Therefore, the total unit cost that the industry incurred due to actual power interruption
and restarting duration after feeder rearrangement is the summation of the unit cost due to
actual power interruption and restarting process. Hence, the industry unit cost will be
3.53 birr/kwh (3.03 birr/kwh + 0.5 birr/kwh). Therefore, rearranging the feeders for the
oxford plc will mitigate the cost incurred by the industry by 84%.
3.6.2. Arranging Backup System
Yes Brands Foods & Beverages Plc has arranged backup system to mitigate the effects of
power interruption on its production process. However, Oxford Amalgated plc has not
arranged backup system for its critical load. Therefore, in addition to feeder
reconfiguration, arranging the backup facilities will mitigate the cost incurred by the
oxford plc by more than 84%.

3.6.3. Installing Backup System Accessories
Yes Brands Foods & Beverages Plc has arranged backup system for its critical
production to mitigate the effects of power interruption. However, the plc has not
arranged all back up facilities such as ATS, AVR and UPS. Hence, power interruption
associated with power fluctuation and quality damaged some of the fluctuation and power
quality sensitive equipments such as PLC modules and CPU. Therefore, the unit cost
incurred by yes plc due to damaged equipments (1.1158birr/kwh) can be mitigated by
installing these backup system accessories (such as ATS, AVR and UPS).

CHAPTER FOUR
4. RESULT DISCUSSION AND INTERPRETATION
4.1. Substation Analyzed Data Discussion
The substation data, which has been analyzed in the above chapter, is discussed below.
4.1.1. Analyzed Data Discussion of all Feeders
Table 4.1: Total interruption data of all feeders at the substation in 2017 G.C
OP 1070 31.49 966.2 37.28
SCS 840 24.72 797.48 30.77
2017 EF 1396 41.08 780.64 30.12 3398 2591.4
UF 44 1.29 27.713 1.07
OL 48 1.41 19.39 0.75
Table 4.2: Monthly average interruption data of all feeders at the substation in 2017 G.C
Monthly OP 89.167 31.49 80.51 37.28
average SCS 70 24.72 66.45 30.77
interruption EF 116.33 41.08 65.05 30.12 283.167 215.95
in 2017 GC UF 3.67 1.29 2.31 1.07
OL 4 1.41 1.61 0.75
The total or average interruption duration and frequency at the substation are exaggerated
because the frequency and duration of all feeders are totalized together and there is a time

when two or more feeders of the substations are interrupted simultaneously. However, the
percentage value shows that a real percentage value of causes of interruption on the
feeders. Hence, about 41 % of interruption frequency on the substation is due to earth fault
where as about 31% and 24% of interruption frequency is due to operational request and
short circuit respectively. However, the frequency of interruption due to both under
frequency and over loading is less than 3% during this year.
The highest duration of interruption at the substation is due to operational request, which
is about 37%. However, interruption duration due to short circuit and earth fault are about
31% and 30 % respectively. The least is interruption duration because of under frequency
and over loading which is less than 2% together. Therefore, about 97 % of the frequency
of interruption at the substation is because of earth fault, operational request and short
circuits. Also about 98 % of the interruption duration at the substation is due to
operational request, short circuits and earth faults where as interruption duration due to
both under frequency and overloading is less than 2%.
The monthly average interruption duration and frequency of each feeder at the substation
is indicated in the following graph:
50
45
40
35
30
Frequency
25
20 Duration (in hr)
15
10
5
0
F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12 F13
Figure 4.1: The monthly average interruption duration and frequency of each feeder.

As it is indicated in the graph the interruption frequency of feeder two (yes plc feeder)
and the interruption duration of feeder eleven (oxford plc feeder) are the highest.
However, the interruption duration and frequency of feeder five are the least because the
feeder is the dedicated line (not interconnected with other nearby loads) that is given only
to welia steel industry plc.
4.1.2. Analyzed Data Discussion of F2 & F11
The generalized total and monthly average power interruption duration and frequency on
feeder, F2 (Yes plc feeder) and feeder, F11 (oxford plc feeder) for the past one year (2017
G.C) is shown in the following graphs.
582
600
500 460
Tota interruption duration (in hr)
400 348.56
Monthly avearage interruption
duration (in hr)
300 250.68
Total interruption frequency
200
Monthly average interruption
frequency
100 48.5
29.05 38.33
20.89
0
Yes plc Feeder (F2) Oxford plc Feeder (F11)
Figure 4.2: Generalized substation interruption data of feeder two (Yes plc) and feeder
eleven (oxford plc).
The total interruption duration F11 is higher than F2 interruption duration by

39.04%. However, its total interruption frequency is less by 26.52 % than that of
F2 interruption frequency. This shows that the F11 power interruption length of

occurrence (0.75hr/fr.) is higher than F2 power interruption length of occurrence

(0.43hrs/fr).
The frequency of interruption on F2 and F11 are 1.61 and 1.27 per day
respectively. In addition, the duration of interruption on F2 is 0.7hr and on F11 is
0.97hr per day.
The summarized average interruption duration and frequency of the two industries (Yes
and oxford plc) is indicted below.
Table 4.3: Average interruption duration and frequency of the two industries (yes and
oxford plc).

Average OP 8.46 20.20 7.36 29.49
monthly SCS 15.08 33.60 8.65 35.61
interruption EF 17.91 41.55 8.31 32.49 43.42 25
in 2017G.C UF 1.05 2.72 0.48 1.68
OL 0.91 1.89 0.15 0.70
The frequency of interruption on these two industries is mainly due short circuits
and earth faults than operational request, over loading and under frequency
relatively.
The manipulated data (as shown in table 4.3) indicates that about 68% of the
interruption duration on the industries is due to earth faults and short circuits on
the power system (the substation).
The other main cause of power interruption duration on the industries is
operational request, which covers about 30% of the total interruption on the
substation.

4.2. Result Discussion for Yes Plc
Table 3:10, table 3:11, table 3:12 and table 3:13 have indicated the high maintenance
cost, generator charge, the high cost of fuelling the generator as well as cost of damaged
equipments during power interruption. From table 3:10 the maintenance cost of the
generator will be 4,068.31 birr per month. From table 3:12 it can be found out that the
amount used in fuelling the generator per month is 115,783.68 birr. The total cost of self-
power generation in the industry is 182,966.47 birr per month. It can also be seen that the
cost of generating 1kwh of electricity by the industry is approximately 13.66 birr
(i.e.13.66 birr/kwh). However, EEP report has shown that the cost of generating 1kwh of
energy is 0.8870 birr/kwh. This energy is charged to the industrial consumer (Yes plc) at
0.5778 birr per kwh. (Note that about 0.3092 birr per kwh has been subsidized by the
Ethiopian government). Hence, the industry at the time of writing this research has been
incurring an additional cost of 14.78 birr/kwh (i.e 15.3578 - 0.5778) due to self-power
generation and damaged equipments.
The annual component & total cost of the yes plc and the utility cost is indicated in the
following graph.

Cost (in birr )
3,000,000
2,374,874.81 2,467,708.21
2,500,000
2,195,597.68
2,000,000
1,389,404.19
1,500,000
Cost (in birr )

1,000,000
757,373.70
500,000
179,277.13
48,819 92,833.40
0
Figure 4.3: Annual component and total cost incurred by yes plc and utility cost

Cost (in birr per Kwh)

18
16 15.357
14.78
13.66
14
12
10
8
Cost (in birr per Kwh)
6
4
2 1.1158
0.5778
0
Self generating Damaged Yes plc cost power utility Overall cost
cost (indirect equipments cost incurred
cost) cost (direct
cost)
Figure 4.4: Graph showing unit Cost of self-generation, damaged equipments cost,
industry cost, power utility cost and overall cost
The cost incurred by power supply utility due to unsupplied energy is relatively
small when compared with total cost incurred by the industry (i.e only 3.91 % of
the total cost incurred by the industry).
The cost incurred by the industry is directly related to the consumed energy and
power interruption duration.
Even though the cost incurred by power utility due to this unsupplied energy of
one industry (yes plc) is relatively, low (92,833.4 birr) the cost increases with a
number of industries encountering such power interruption problem. That means,
in this industrialization era the power interruption impact is very high for both
the industries and the power utility sector.

If the short circuit, earth fault and operational request associated with power interruption
is reduced by half the cost incurred by the industry and the utility is discussed in the
following.
4.3. Result Discussion for Oxford plc
a. Unit cost of the industry
in birr/kwh ... (4. 1)
Where, t is the annual interruption duration of oxford plc due to short circuit, earth fault,
operational request and under frequency.
b. Total cost of the industry
(4. 4)
... (4. 5)
c. Utility cost
(4. 6)
... (4. 7)
Hence, by substituting the appropriate data in the above equations, the results are
indicated in the following tabular form.

Table 4.4: Actual interruption cost (excluding restarting cost) of oxford and the utility
Causes of Interruption Industry cost Utility cost

interruption Duration Birr/kwh Total (birr) Birr/kwh Total (birr)
Short circuit 103.21hrs 5.14 237,605.65 0.5778 7,906.6
Earth fault 130.8hrs 6.516 301,122.17 0.5778 10,020.2
Operation 102.74hrs 5.118 236,523.64 0.5778 7,870.63
Under frequency 11.71hrs 0.58334 26,958.26 0.5778 897.07
Total 348.46hrs 17.357 802,209.72 0.5778 26,694.50
The new cost of the industry (oxford plc) and the utility when the short circuit
interruption duration is reduced by half while the others interruption duration remains
constant is indicated in the table below.
Table 4.5: Actual interruption cost if short circuit interruption duration is reduced by half

Short circuit 51.605hrs 2.57 101,151 0.5778 3,953.32
Earth fault 130.8hrs 6.516 256,454 0.5778 10,020.2
Operation 102.74hrs 5.118 201,438 0.5778 7,870.63
Total 296.855hrs 14.788 582,002 0.5778 22,741.22
As it is indicated in the above table when the short circuit interruption duration is
reduced by half the industry and the utility cost is reduced by 27.45 % & 14.81
% respectively.
The new cost of the industry (oxford plc) and the utility when earth fault interruption
duration is reduced by half while the others interruption duration remains constant is
indicated in the following table.

Table 4.6: Actual interruption cost if earth fault interruption duration is reduced by half

Earth fault 65.4hrs 3.258 122,270.63 0.5778 5,010.1
Operation 102.74hrs 5.118 192,075.22 0.5778 7,870.63
Total 283.06 14.099 529,139.09 0.5778 21,684.40
As it is stated in the above table when the earth fault interruption duration is
reduced by half the industry and the utility cost is reduced by 34.04 % & 18.77
% respectively.
The new cost of the industry (oxford plc) and the utility when operational interruption
duration is reduced by half while the others interruption duration remains constant is
indicated in table below.
Table 4.7: Actual interruption cost if operational interruption duration is reduced by half

Earth fault 130.8hrs 6.516 256,662.06 0.5778 10,020.2
Operation 51.37hrs 2.559 100,797.76 0.5778 3,935.31
Total 297.09 14.8 582,899.39 0.5778 22,759.18
As it is mentioned in the above table when the operational interruption duration

is reduced by half the industry and the utility cost is reduced by 27.34 % & 14.74
% respectively.

The new cost of the industry (oxford) and the utility when under frequency duration is
reduced by half while the others interruption duration remains constant is indicated in the
following table.
Table 4.8: Actual interruption cost if under frequency interruption duration is reduced by
half

Earth fault 130.8hrs 6.516 295,983.39 0.5778 10,020.2
Operation 102.74hrs 5.118 232,480.5 0.5778 7,870.63
Total 342.605hrs 17.06567 775,192.58 0.5778 26,245.96
As it is seen in the above table when the under frequency interruption duration is
reduced by half the industry and the utility cost is reduced by 3.368 % & 1.68 %
respectively.
Finally, the results discussed above in tabular form are summarized by the following
graphs.

34.04%
35.00%
30.00% 27.45% 27.34%
25.00%
18.77%
20.00%
14.81% 14.74%
15.00%
Reduced industry
10.00% (oxford) cost in %
3.37% Reduced utility cost
5.00% 1.68%
in %
0.00%
Reduced Short Reduced earth Reduced Reduced under
circuit fault operational frequency
interruption interruption interruption interruption
duration by duration by duration by duration by
50% 50% 50% 50%
Figure 4.5: The change on the cost incurred by oxford plc when the interruption duration
due to short circuit, earth fault, operational request and under frequency is reduced by
half.
4.4. Effects of Outage Duration on Industry's Interruption Cost
Power outage duration has direct effects on the interruption cost of the industries.
4.4.1. Effects of Outage Duration on the Cost Incurred by Oxford Plc
The power interruption cost incurred by the industries or consumers of electricity is

represented by a function of outage duration. The interruption cost represented as a
function of outage duration is customer damage function. It is defined as monetary
amount of damage against per outage, per kwh of unsupplied energy or per kwh annual
consumption of energy. The function provides a straightforward calculation technique for
the interruption costs of the industrial customers. It simply makes use of analytical data
(value added and annual energy consumption).Therefore, the customer damage function
(CDF) is defined:

in birr/kwh ...(4. 8)
Where t is given by outage duration.
The cost incurred by oxford plc due to its cost components during different power outage
duration scenarios is indicated in the table below:
Table 4.9: Oxford plc cost components during power outage scenarios
Cost Power Interruption Cost/outages (in birr/kwh.)

Component < 5min. 1hr 4hrs 8hrs 12hrs 24hrs > 24hr
Production <0.00415 0.05 0.199 0.398 0.59 1.195 >1.195
cost
Labor cost x<0.0001 0.00127 0.005 0.01 0.015 0.03 >0.03
Restarting cost 0<x<0.01 0.0103 0.0103 0.0103 0.0103 0.0103 0.0103
Other costs constant constant constant constant constant constant constant
3.5
3
Production Cost
2.5 ( birr/kwh)
Labor Cost
2 (birr/kwh)
1.5 Restarting Cost

(birr/kwh)
1 Oxford PLC Cost
(birr/kwh)
0.5
0
< 5 min. 1hr 4hrs 8hrs 12hrs 24hrs >24hrs
Figure 4.6: The relationship between oxford plc cost, its component costs and power
outages duration scenarios .

As it is indicated by the graph the production and the labor unit cost (hence the industry
unit cost) are drastically increasing with power interruption duration. However, the
restarting unit cost is increasing for the interruption duration, which lasts below 20
minutes. Then it becomes constant even though the interruption duration is increasing.
The other costs (damaged equipments cost, maintenance and repairing cost, depreciation
cost and raw material cost) remain constant regardless of the power interruption duration.
4.4.2. Effects of Outage Duration on the Cost Incurred by Yes Plc
Since Yes plc has arranged backup facilities to mitigate the effects of power interruption
its cost damage function (CDF) is not determined. The industry indirect cost (self-
generating cost) is analyzed indirectly from its cost components by using preventive cost
method. Even though, the cost damage function (CDF) of the industry is not determined
its power interruption cost is time dependant. The cost incurred by yes plc due to its cost
components during different power outage duration scenarios is indicated in the table
below:
Table 4.10: Yes plc cost components during power outage scenarios
Cost Power Interruption Cost (in birr/kwh)

Component < 5min. 1hr 4hrs 8hrs 12hrs 24hrs > 24hr
Maintenance <0.00005 0.00065 0.0026 0.00525 0.00787 0.0157 >0.0157
cost
Depreciation <0.00083 0.01 0.04 0.0814 0.122 0.244 >0.244
cost
Fuel cost <0.00156 0.0186 0.075 0.15 0.224 0.448 >0.448
Other costs constant constant constant constant constant constant constant

1.6
1.4
1.2
Maintenance Cost
1 (birr/kwh)
0.8 Depreciation Cost

(birr/kwh)
0.6 Fuel Cost (birr/kwh)
0.4
Yes PLC Cost
(birr/kwh)
0.2
0
< 5 min. 1hr 4hrs 8hrs 12hrs 24hrs >24rs
Figure 4.7: The relationship between yes plc cost, its component costs and power outages
duration scenarios
As it is shown by the graph the fuel and the depreciation unit cost (hence the industry unit
cost) are extremely increasing with power interruption duration where as the maintenance
unit cost is increasing slowly. However, the other costs (damaged equipments cost, labor
cost and raw material cost) remains constant irrespective of power interruption duration.
(Note that there is no wasted workforce because of backup facilities arrangement of the
industry).

CHAPTER FIVE
5. CONCLUSIONS AND RECOMMENDATIONS
5.1. Conclusions
Based on the results (findings), results discussion and interpretation presented in the
previous section, the following conclusions are made.
The impact of power outage (in terms of cost) on the selected industrial sectors (yes and
oxford plc) in western part of Addis Ababa is analyzed. The two industries are
investigated deeply or case study is done to understand their production process through
observation (field survey), interview and document report review. Among various cost
estimating methodologies preventive cost method (revealed preferences method) is used
to estimate power interruption cost for yes plc because the industry has arranged backup
system (standby generators) to mitigate the power interruption impact. However, the
oxford plc has not active backup arrangement and other cost estimation methodology, the
production function method is used. Under this cost estimation methodology, customer
damage function (CDF) or industry damage function (IDF) is used to calculate the oxford
plc cost using analytical data (annual value added and annual energy consumption) of the
industry.
From the substations fault record data, it is identified that power outages in the
distribution system are due to short circuits, earth fault, operational request, under
frequency and system over load. However, this study shows the main causes of power
interruption (in duration) at substation that brings economic cost to industries are due
short circuits (31%), earth faults (30%), and operational request (37%). This is occurred
mainly due to lack of preventive maintenance and mainly concerning on corrective
maintenance, which ask more cost and additional operation time.

The analyzed interruption duration, frequency and cost of the yes plc are 20.89
hrs/month, 48.5times/month and 14.78birr/kwh respectively. In addition, the analyzed
interruption duration, frequency and cost of the oxford plc are 29.05hrs/month,
38.33times/month, and 22.13birr/kwh respectively. Therefore, it can be concluded that
the degree of influence of power interruption on the industrial sectors, consequently on
the economy of the country is very high, because power outages affect industries
productivity, capacity utilization, labor employment and products cost. In general, power
interruption incurs total socio-economic cost (the sum of all cost incurred due to power
outages) to the country. Finally, any failure to maintain reliable electricity supply by
utility would adversely affect the investment environment in the country.
The cost incurred by power supply utility due to unsupplied energy is relatively small
when compared with total cost incurred by the industries. (For instance, the cost incurred
by the utility due to unsupplied energy for yes and oxford plc is only 3.91 % & 2.61% of
the total cost incurred by the industries respectively). In addition, the cost incurred by the
industries depends on the type of the industries, size of the industries, duration of
interruption, frequency of interruption, character of interruption (planned or unexpected)
,time of interruption and amount of consumed energy.
The industrial sectors and Ethiopian Electric Utility should mitigate the effect of power
interruption by preparing appropriate solutions. The industrial sectors can mitigate the
cost incurred due to power interruption by arranging backup system and facilities.
Substation feeders' reconfiguration (connecting the oxford plc to nearby walia steel
factory feeder, F5 instead of feeder, F11) can reduce the cost incurred by oxford plc by
84%. The causes for short circuit and earth faults at the substation should be minimized
as much as possible by regularly inspecting the power system and replacing the damaged
equipments, insulators, protective devices etc.

5.2. Recommendations
Based on the results and the conclusions drawn in the previous sections, the following
recommendations are forwarded.
 The power system or network should be attended regularly by preparing
inspection schedule to minimize the causes of short circuits and earth faults
encountering the system, i.e. clearing trees & bushes, changing deteriorated
insulation, replacing damaged protective and system equipments and etc.
 The EEP and EEU should invest more on transmission and distribution network
improvement to have reliable power supply system.
 The industrial sector should arrange backup system for their critical load during
power outages because the industry with back up arrangement is less affected than
the industry without back up arrangement.
 It is better for those industries whose economic impact of power interruption is
high to have special dedicated line (which is not interconnected within nearby
distribution network) from the nearby substation. e.g. Feeder five.
 Those industries having standby by generator may arrange or install UPS and
AVR for their critical loads so that the cost due to damaged equipments will be
minimized.
 Strict regulation should be followed according to the standard during maintenance
work.
5.3. Recommendation for Future Works
The researcher suggested the following areas for further study in the future:
 The researcher recommended that the economic impact of power interruption on
the industrial, residential, and commercial sectors should be analyzed at
countrywide.

 It is also pointed out that further study should be carried out in future how the
economic impact of this power interruption on the industries will be mitigated by
implementing better distribution networks.

REFERENCES
[1] N. Ikechukwu Yagazie, "Assessement of the Impact of Power Outages on

Commercial Consumers: A case study of cooldrooms consumers at Trans - Amadi
area,port-Harcort.," April 2014.
[2] J. W. Creswell, Research Design: Quantitative ,Qualitative and Mixed method

Approches, 4th ed., United States of America: Sage Publications, Inc., 2014.
[3] "Wikipedia," [Online].
[4] IEEE Guide for Electric Power Distribution Reliabilty Indice.
[5] E. N. Hachimenum N.Amadi, "Analysis of Methodologies for the Evaluation of

Power Outages Costs," IJERT, vol. 4, no. 05, May 2015.
[6] M. Cerny, "Economic and Social Costs of Power Outages:The case of Pakistan," 16
May 2013.
[7] A. Asnake, "The Ethiopian Energy Sector - Investement Opportunities: UK -

Ethiopia Trade & Investement Forum," London, 2015.
[8] "The Ethiopian Power Sector:A renewable Future (Berlin Energy Transition
Dialogue)," Ministry of Energy Irrigation and Electricity, Berlin, 2017.
[9] S. Tsegaye, "Highlights of Ethiopian Energy Sector," 2016.
[10] M. Kidan, "Powering Ethiopia Out of Poverty: A case of Diversified Electrical

Energy Generation.," 2010.
[11] H. S. M. Harpuneet Singh, "Impact of Unreliable Power on a Paper Mill: A case

study of industry of Punjab.," IMECS, 2012.
Msc Thesis, Bahir Dar Institute of Technology, BDU, 2018 Page 84

[12] "Ethiopian Economic Update: A flourishing Manufacturing Industry will Help more
Ethiopian.," World Bank, Addis Ababa, 2015.
[13] H. S. G. H. V. G. H. Matthias Hofmann, "Study on Estimation of Costs due to

Electricity Interruptions and Voltages Disturbances," SINTEF Energy Research,
2010.
[14] L. R. Pedro Linares, "The Costs of Electricity Interruptions in Spain," Economics for
Energy, 2012.
[15] H. N. Amadi, "Impact of Power Outages on Developing Countries: Evidence from

Rural Households in Niger Delta, Negeria.," IISTE, March 2015.
[16] H. N. Amadi, "Power Outages in Port Harcourt City: Problems and Solutions,"
IOSR-JEEE, vol. 10, pp. 59-66, April 2015.
[17] H. Endris, "Impact of Power Interruption on Capacity Utilization :The Case of

Kality Food Share Company," June 2010.
[18] P. A. A. A. E. I. a. O. O. A. Abel Ehimen Airoboman, "Economic Implication of

Power Outages in Negeria: An Idustrial Review," IJAER, vol. 11, pp. 4930-4933,
2016.
[19] A. Goldberg, "The Economic Impact of Load Shedding: The Case of South African
Retailers," November 2015.
[20] W. S. Hafiz A.Pasha, "The Impact and Cost of Power Load Shedding to Domestic
Consumers".
[21] O. A. Imoro Braimah, "Cause and Effects of Frequent and Unannounced Electricity
Blackouts on the Operations of Micro and Small Industries in Kumasi," Journal of
Sustainable Development, vol. 5, February 2012.
[22] E. N. O. F. I. I. Hachimenum N . Amadi, "Assessment of impact of outages in

selected electricity intensive industries in Nigeria," Impact: IJRET, vol. 4, no. 10,
pp. 9-24, Oct 2016.
[23] "dieselserviceandsupply.com," [Online].

APPENDICES - SURVEY DOCUMENTATION
Fig.1: Sebeta one substation at kera kore.
Fig.2: Sebeta one single line diagram of 15kv feeder lines.

Fig. 3: Yes plc workers in production room

Fig.4: Yes plc 20 liters /jar water/ in stock
Fig. 5: Yes plc standby generator

Fig.6: Oxford plc Yarn making process

Fig.7: Oxford plc production recycling process

Fig. 8: Oxford plc bag or sack making process (during sewing and Printing)
Fig. 9: Oxford plc Packed product

Fig. 10: Oxford plc three-phase voltage value and frequency indictor (panel or meter)

Fig.11: Oxford plc damaged motors mainly due to power interruption and quality
gh
Fig.12: Oxford plc weaving machine disordered due to power quality

Table 1: Sebeta one substation power interruption duration (in hr) and frequency (in
number) during 2017 G.C.
Feed Months of the year Tot. Av.

ers Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
F1 Dur 7.617 30.75 22.2 3.35 13.77 3.15 21.25 31.65 12.45 5.03 22.61 14.6 188.4 15.7
Fre. 13 11 9 3 10 3 7 11 23 16 19 14 139 11.6
F2 Dur 15.3 15.95 27.21 9.57 19.03 13.5 37.9 35.6 23.01 15.7 26.05 11.82 250.6 20.8
Fre. 33 40 42 40 39 36 55 67 68 53 54 55 582 48.5
F3 Dur 9.53 20.16 3.816 2.98 16.88 4.56 8.267 2.43 28.2 24.8 0.416 33.26 155.3 12.9
Fre. 38 28 13 13 15 8 15 19 52 46 1 26 274 22.8
F4 Dur 9.13 32.23 23.03 17.6 22.65 3.58 0 0 8.016 9.88 17.58 2.533 146.2 12.2
Fre. 34 37 40 65 30 7 0 0 3 17 10 12 255 21.2
F5 Dur 21.08 0.3 2.3 0.166 7.867 13.9 1.28 1.383 0.65 6.83 2.5 2.583 60.84 5.07
Fre 8 3 2 1 3 6 4 5 3 7 2 4 48 4
F6 Dur 0.216 1.65 1.633 0.65 16.51 8.41 24.36 62.73 20.46 3.55 5.58 3.75 149.5 12.4
Fre. 3 4 7 7 11 11 20 32 14 11 6 6 132 11
F7 Dur 12.5 32.15 3.283 6.417 40.51 52 22.56 12.63 25.18 17.1 7.5 7.9 239.7 19.9
Fre. 37 34 14 25 21 42 32 20 28 25 16 13 307 25.5
F8 Dur 5.183 0.15 1.983 12.78 10.3 3.6 3.617 7.93 2.283 2.25 12.71 0.9 63.69 5.30
Fre. 8 3 6 12 11 3 11 13 11 10 13 8 109 9.08
F9 Dur 1.783 5.3 24.81 2.683 8.33 8.76 10.61 34.58 2.767 7.76 3.067 1.283 111.7 9.31
Fre. 6 4 9 8 7 23 12 21 12 16 7 9 134 11.1
F10 Dur 18.51 6.4 25.63 33.75 40.88 42.1 4.65 16.73 30.75 14.1 16.78 10.13 260.4 21.7
Fre. 35 17 38 26 32 42 5 6 14 11 23 15 264 22
F11 Dur 10.01 24.9 26.05 39.43 23.22 23.2 46.87 28.28 51.85 19.9 33.77 20.9 348.4 29.0
Fre. 34 26 63 49 28 40 32 40 41 41 31 35 460 38.3
F12 Dur 15.25 12.8 30.7 35.96 30.03 19.5 37.78 46.93 34.88 6.66 24.76 7.33 302.6 25.2
Fre. 39 21 23 19 19 28 28 40 49 9 30 4 309 25.7
F13 Dur 10.1 7.083 40.5 41.15 22.05 21.2 50.23 31.91 40.21 10.1 23.88 16.7 315.1 26.2
Fre. 31 30 35 28 18 27 62 40 42 28 19 23 383 31.9

Solomon Achalu Jan 2019 Final Thesis

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THE ECONOMIC IMPACT OF POWER

THE ECONOMIC IMPACT OF POWER INTERRUPTION ON

Bahir Dar, Ethiopia

THE ECONOMIC IMPACT OF POWER INTERRUPTION ON INDUSTRIAL

Bahir Dar, Ethiopia

Master Thesis, Bahir Dar Institute of Technology, 2019 Page ii

Master Thesis, Bahir Dar Institute of Technology, 2019 Page iii

Master Thesis, Bahir Dar Institute of Technology, 2019 Page iv

Master Thesis, Bahir Dar Institute of Technology, 2019 Page v

Master Thesis, Bahir Dar Institute of Technology, 2019 Page vi

DECLARATION ............................................................................................................... iii

1.3.2. Specific Objectives ............................................................................................ 5

1.4. Research Methodology..............................................................................................5

1.4.2 Research Design ................................................................................................. 6

1.4.3. Apparatus or Material Used ............................................................................... 6

1.4.4. Data Collection Techniques............................................................................... 7

1.5. Scope of the Study.....................................................................................................8

1.8.2. Profile of the Industries ................................................................................... 12

1.9. Organization of the Paper ........................................................................................16

2. THEORETICAL BACKGROUND AND LITERATURE REVIEW ..........................18

2.8.2. Market Based Methods (Revealed Preferences Methods) ............................... 29

2.8.3. Production Function Method ........................................................................... 30

2.8.4. Case Studies ..................................................................................................... 31

2.9. Reviewed Literatures...............................................................................................31

3.1.2. Analyzing Power Interruption of F2 & F11 at the Substation .......................... 41

3.2. Data Analysis Methodology for Yes Plc .................................................................46

3.3.2. Direct Cost (Cost due to Damaged Equipments)............................................. 53

3.3.3. Utility Cost ...................................................................................................... 54

3.3.4. Overall Cost ..................................................................................................... 54

3.4. Oxford Plc Data Analysis Methodology .................................................................54

Master Thesis, Bahir Dar Institute of Technology, 2019 Page viii

3.5.2. Utility Cost ...................................................................................................... 60

3.5.3. Overall Cost ..................................................................................................... 61

3.6. Mitigation of the Cost Incurred by Industries .................................................... 61

3.6.1. Rearranging the Substation Feeders ................................................................ 62

3.6.2. Arranging Backup System ............................................................................... 63

3.6.3. Installing Backup System Accessories ............................................................ 64

CHAPTER FOUR ..............................................................................................................65

4.1.2. Analyzed Data Discussion of F2 & F11 ............................................................ 67

4.2. Result Discussion for Yes Plc .................................................................................69

CHAPTER FIVE ...............................................................................................................80

Master Thesis, Bahir Dar Institute of Technology, 2019 Page ix

Master Thesis, Bahir Dar Institute of Technology, 2019 Page x

Table ‎3.16: Human resource (HR) and labor cost ............................................................ 57

Master Thesis, Bahir Dar Institute of Technology, 2019 Page xi

Figure ‎1.1: Sebeta one substation single line diagram ...................................................... 11

Master Thesis, Bahir Dar Institute of Technology, 2019 Page xii

ATS AUTOMATIC TRANSFER SWITCH

CDF CUSTOMER DAMAGE FUNCTION

CIC CUSTOMER INTERRUPTION COST

CPU CENTRAL PROCESSING UNIT

EEA ETHIOPIAN ELECTRIC AUTHORITY

EEP ETHIOPIAN ELECTRIC POWER

EEU ETHIOPIAN ELECTRIC UTILITY

GHc GHANAIAN CEDI

GOE GOVERNMENT OF ETHIOPIA

ICS INTER CONNECTED SYSTEM

IDF INDUSTRIAL DAMAGE FUNCTION

IEEE INSTITUTE OF ELECTRICAL& ELECTRONICS ENGINEERS

Master Thesis, Bahir Dar Institute of Technology, 2019 Page xiii