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Saturday, 28 March 2015

Power failures: white or black swan events ?

Friday 27 March we had a major power blackout in The Netherlands, which lasted slightly over 3 hours for me but much longer for other people. I call it major, as a large scale Dutch power blackout is very rare. Even my mother (80) had never ever experienced such a big one. Nearly the entire province of North Holland and parts of Flevoland were hit. North Holland features our national capital Amsterdam and our main airport Schiphol. Our political capital is in The Hague, South Holland, and was not hit. Allegedly, 1 million out of a total of some 7.5 million households suffered. A percentage of 13.3 for a rare event is major to me.

While I’m writing this, Internet has still not been restored. I’m using the offline version of Word to draft this new blog. At least my house is warm again as the thermostat works on electricity. My house got really cold as it has lots of windows and the inner temperature quickly adapted to the outside one despite the thermo glass. 

I have been wondering what to do during the power failure. For most of the things that came to my mind, I either needed Internet or electricity. And the Internet modem needs electricity too. I kept myself informed by using mobile Internet. However, after some 2 hours even my mobile 3G/4G Internet connection stopped working. fully agree with the person who later said: "I don't mind not having electricity but not having Internet is really cumbersome". Subsequently, even my telecom operator abandoned me. Hence even mobile phone calls had become impossible. My landline phone works on VOIP and had thus quit immediately at the start of the power outage.

I wonder what the authorities would have done in case there had actually been an emergency as all means of communication (radio, TV, phone and Internet) had gone due to lack of energy supply. Perhaps I should consider buying a classic transistor radio on batteries for such instances. I suppose that would have kept me informed.

Our daily trust in electricity is based upon the reliability of its supply which is 99.9948%. Only Germany has a higher % in Europe. On average, everyone is 27 minutes per year without power. This 5 year average even decreased to 20 minutes per year in 2014, which translates to 99.9962% (= (525,600-20)/525,600). Source: 

My friends in Kenya, and even in South Africa, complain about power failures all the time. They happen at least weekly and can last for almost an entire day. Allegedly, there is a distinct correlation between rainfall and power outages in Kenya. One of my Kenyan friends said that Kenyan men don’t mind too much as it allows them for having an excuse not spending the night at home.

Most decisions are risk/cost-reward based while using confidence thresholds of 99.95%. This % represents a failure of 4,38 hours per year, one full day every 5.5 years, one full week every 38.5 years or one full year in every 2,000 years. Latter description is quite misleading to be honest.

Given the existing 5 year average confidence rate of 99.9948%, a power failure of one full week would occur every 373 years (=7x24x60/27). A power failure of one full week may however be catastrophic to our economy, a so called “black swan” event.

When the impact of extremely low probabilities is beyond imagination, other considerations than risk/cost-reward should be leading in the discussion.