Economic Loss Assessment of Power Outages: A case Study of Manufacturing Industries in Mazandaran Province

Document Type : applicative

Authors

1 University of Mazandaran, Department of Energy Economics,

2 University of Mazandaran

3 , Payame Noor University

10.30473/jier.2026.75957.1515

Abstract

In line with the national challenge of electricity supply–demand imbalances, the industrial sector of Mazandaran Province has also suffered substantial economic losses. This study aims to quantify and disaggregate the damages arising from electricity imbalances in the province’s industrial groups, relying on secondary data and econometric methods. Using panel data from 18 industrial ISIC groups over the period 2018–2022 and applying the System Generalized Method of Moments, two approaches—losses in industrial output and welfare costs—are examined, complemented by a third approach that estimates the Value of Lost Load (VoLL) index.
The results show that the estimated losses vary considerably depending on the nature of the adopted approach. For a 5% electricity supply restriction, the welfare loss ranges from 1150 to 2100 Rials per kWh, while the loss in industrial output lies between 9600 and 210000 Rials per kWh. From the perspective of the Value of Lost Load, the estimated loss is between 62500 and 1360000 Rials per kWh. Large industries such as food and beverage manufacturing and wood product manufacturing face the highest absolute economic losses, whereas smaller industries such as electrical equipment and other transportation equipment exhibit greater sensitivity and dependency on stable electricity supply. The findings underscore that industrial vulnerability to electricity imbalances is not uniform, and supply constraints impose substantial costs on the provincial industrial sector. The study highlights the necessity of investment in the resilience and security of the electricity grid, alongside urgent reforms in demand-side management policies.

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Journal of Industrial Economics researches
Volume 9, Issue 33
October 2025

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History

  • Receive Date: 26 September 2025
  • Revise Date: 22 October 2025
  • Accept Date: 10 March 2026

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