Evaluating cost of inadequate quality of supply

Electricity has the increasing role in energy supply chain. Electricity supply has to satisfy user requirements also in quality terms and good compatibility is necessary, including supply voltage level, voltage stability, waveform distortion due to harmonics and interharmonics, voltage unbalance but also long and short-term availability of the supply. One social concern is to keep electricity prices low enough not to slow down economic growth. At the same time electricity has to be increasingly green and functional. There is a risk that the quality of supply may deteriorate. Cost of insufficient quality may result in stoppage of the production, equipment malfunction, incorrect or reduced rate operation or equipment lifetime reduction. These costs have to be properly assessed to help in selection of preventing measures. Information on these costs is also necessary to set up regulatory measures. The regulation incentive or penalty has to balance the cost of problems mitigation versus cost of consequences in as much as possible social dimension. PQ contracts should work in similar way but are limited to particular consumers for whom such balance is easier to quantify and integrate with risk assessment. The power quality cost evaluation methodology, historical examples and application of results is presented in this paper.