IEEE Power & Energy Magazine - July/August 2020 - 63

Regulatory Incentives
Concerning Blackouts
In Finland, utilities must compensate their customers
for outages that last longer than 12 h. The compensation
depends on the duration of the outage and can be up to
200% of the yearly electricity bill.
In Germany, there is no direct compensation of residential customers. Instead, there is regulation that incentivizes utilities to minimize the System Average Interruption Duration Index. However, the calculation excludes
acts of nature beyond control/force majeure.
Likewise, utilities in the United States extensively exclude causes beyond control, maintenance, and even
their own operative actions from their service guarantee
programs that regulate customer reimbursement in case
of outages. Beyond the direct financial incentives, there
are also regulatory obligations for utilities since power
systems are considered critical infrastructure.

economic cost and danger to human life, among others).
Therefore, the definition of the accompanying cost functions
goes beyond the domains of engineering and economics and
must also entail political decision making (see "Regulatory
Incentives Concerning Blackouts").
Currently, the way of dealing with these tradeoffs varies
greatly among different power system operators, regulators,
and political decision makers. The choices are often made
based on a mixture of history and intuition. More sophisticated approaches are needed to achieve an optimal or at least
near-optimal solution.

Summary
Increasing the resilience of the power system is one of the
major objectives for grid operators. This article provides perspectives regarding different tradeoffs used for evaluating
and improving power system resilience.
The evolution toward an ICT-dependent power system
provides increased operational flexibility and cost-efficiency, but a more complex cyberphysical power system also
poses risks to resilience. As another perspective, the decentralization of power supplies combined with digitalization
allows the implementation of microgrids in distribution systems. Potential benefits of intended islanded operation during blackout situations increases power system resilience but
presents implementation challenges.
The opportunities and challenges discussed in this article are still reflected poorly in the regulatory framework.
Significant effort is required to fully understand, quantify,
incentivise, and implement adequate measures that can be

july/august 2020

used to make the future power system even more reliable and
resilient at acceptable cost.

Acknowledgments
This work was supported by the German Research Foundation DFG as part of the project "Multi-Resilience" (project
360352892) of the priority program "DFG SPP 1984-Hybrid
and Multimodal Energy Systems: System Theory Methods for
the Transformation and Operation of Complex Networks."

For Further Reading
Power System Restoration Dynamics (Issues, Techniques, Planning, Training & Special Considerations), IEEE PES, Piscataway, NJ, Tech. Paper Compendium IEEE PES-TPC2, 2014.
Y. Liu, R. Fan, and V. Terzija, "Power system restoration:
A literature review from 2006 to 2016," J. Mod. Power Syst.
Clean Energy, vol. 4, no. 3, pp. 332-341, 2016. doi: 10.1007/
s40565-016-0219-2.
CIGRÉ WG. "System restoration procedure and practices," CIGRÉ, Paris, France, CIGRÉ WG C2.23, CIGRÉ
Technical Brochure no. 712, Dec. 2017. [Online]. Available: https://e-cigre.org/publication/712-system-restoration
-procedure-and-practices
M. Braun et al., "The future of power system restoration: Using distributed energy resources as a force to get
back online," IEEE Power Energy Mag., vol. 16, no. 6,
pp. 30-41, Nov.-Dec. 2018. doi: 10.1109/MPE.2018.2864227.
Y. Wang, C. Chen, J. Wang, and R. Baldick, "Research
on resilience of power systems under natural disasters:
A review," IEEE Trans. Power Syst., vol. 31, no. 2, pp. 1604-
1613, 2016. doi: 10.1109/TPWRS.2015.2429656.
D. Raoofsheibani, P Hinkel, and W. H. Wellssow, "A
quasi-dynamic tool for validation of power system restoration strategies at distribution level," in Proc. 2019 IEEE
Milan PowerTech, Milan, Italy, pp. 1-6. doi: 10.1109/PTC.
2019.8810814.
"IEEE PSOPE Working Group on Power System Restoration." Accessed on: May 7, 2020. [Online]. Available:
https://site.ieee.org/pes-psope/subcommittees/bulk-power
-system-operation-subcommittee/
"IEEE PSDP Task Force on Power System Restoration
with Renewable Energy Sources." Accessed on: May 7, 2020.
[Online]. Available: https://site.ieee.org/pes-psdp/power
-system-stability-controls-subcommittee/

Biographies
Martin Braun is with Fraunhofer IEE, Kassel, Germany
and the University of Kassel, Germany.
Christian Hachmann is with the University of Kassel,
Germany.
Jonas Haack is with the University of Kassel, Germany.
p&e

ieee power & energy magazine

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https://www.e-cigre.org/publication/712-system-restoration-procedure-and-practicesc https://www.e-cigre.org/publication/712-system-restoration-procedure-and-practicesc https://site.ieee.org/pes-psope/subcommittees/bulk-power-system-operation-subcommittee/ https://site.ieee.org/pes-psope/subcommittees/bulk-power-system-operation-subcommittee/ https://site.ieee.org/pes-psdp/power-system-stability-controls-subcommittee https://site.ieee.org/pes-psdp/power-system-stability-controls-subcommittee

IEEE Power & Energy Magazine - July/August 2020

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