Valuing security of supply: does experience matter?

In this paper, we analyse if experiencing a supply interruption affects the valuation of security of supply of electricity. To do so, we utilised a blackout in Munich, Germany, in November 2012 as a natural experiment by conducting a Contingent Valuation survey around two months after the event. The characteristics of the supply interruption allow to distinguish between households that were affected by the blackout and those who were not. This provides the opportunity to compare the willingness to pay (WTP) for avoiding and the willingness to accept (WTA) for enduring a supply interruption between affected and non-affected Munich households. Using the WTP measure, we find that experiencing the outage event increased the valuation of supply security by over 60 percent. Furthermore, our results show that power outage experience can increase the perceived relevance of the policy objective "security" at the expense of the objective "environmental sustainability". This implies that maintaining the level of supply security should be a priority energy policy objective to support the acceptance of the transition to a renewable based electricity system.