Benefit analysis. Assessing the cost of blackouts in case of attack. Evaluation based on Italian and Polish case studies.

This report provides an economic quantification of the benefits of implementing security standards, expressed in terms of avoided costs of blackouts. The evaluation considers specifically the blackouts described in the Italian and Polish trials, employing a mixed methodology relying on the "production function" approach for the non-household sector, while an econometric method based on survey data (stated preferences) is used for household consumers. With reference to non-households, a separate evaluation is carried on for the electricity industry. The results show that the costs of blackout are substantial, either for household and non-household consumers, and largely exceed the damage suffered by the utilities due to lost sales. Finally, since for non-households only losses in production are considered, we provide, in a separate section, three case studies demonstrating that some industries can suffer relevant additional blackout costs.