The Energy Networks Association (ENA) has published a NERA study on the Value of Lost Load (VoLL) in Great Britain. The VoLL parameter plays an important role in informing electricity transmission and distribution companies, regulators, and policymakers on the economic consequences of interruptions to power supply and the value of avoiding them.

The value of VoLL most commonly used in Great Britain dates back to a 2011 study from London Economics, which found a value of £23,575/MWh (2025 prices). Our update of this headline VoLL figure, from an econometric analysis of data gathered through our stated preference survey, shows it has remained similar to the previous estimate (£23,271/MWh). However, focusing on this headline would mask some important and interesting findings from our work.

• Changing customer preferences over reliability. While our VoLL estimate is similar to the 2011 study, we find a lower estimate of customers’ willingness to accept (WTA) short power supply interruptions (the numerator in the VoLL calculation). Credible hypotheses include the prevalence of battery-powered devices, the improved availability of internet connectivity, cost of living pressures, and improved levels of reliability reducing the value customers associate with increasingly rare power cuts. This is offset by lower demand (the denominator in the VoLL calculation).

• Different VoLLs for different contexts. Customers’ preferences vary depending on the customer type, how long interruptions last, when interruptions occur, and whether the customers get notice in advance. We see these patterns in our estimates of how much value customers place on avoiding a power cut, which demonstrates the challenge of incorporating these differences into generation and network planning decisions. 

• Time to abandon the practice of reporting VoLL on a per MWh basis? Our report shows the implications of using VoLL figures quoted on a per MWh basis and how they might mislead the user unless interpreted carefully. We find the value customers place on avoiding power cuts is lower in summer than in winter, reflecting the greater importance of continuous power supply in the winter, but because the volume of power supply in MWh is higher in winter, the winter VoLL in £/MWh terms is actually lower than in the summer.

The study involved a literature review, analysis of macroeconomic data, and a survey of how VoLL is determined and used by regulators outside of the UK (work package 1); a stated preference study (work package 2); and a final “triangulation” study that brings together our recommendations (work package 3).

The NERA team was led by Senior Managing Director Richard Druce alongside Senior Consultant/Principal Zoë Fannon, Consultant Riccardo Paccioretti, Analyst Eskil Välilä, and Research Officer George Hale. We delivered the study in partnership with Qa Research.