Risk based financial assessment of voltage sag mitigation options

This paper proposes a procedure to financially assess voltage sag mitigation options, by combining risk based loss assessment of industrial plant, effectiveness of mitigation, and financial analysis using stochastic net present value method. From the perspective of an industrial plant owner, the analysis aims to provide an idea about what mitigation options to consider, how they can be modelled, what their effectiveness in mitigation is, and what their financial value is. The method separates the technical and the financial part of the analysis, i.e., it initially excludes the uncertain mitigation costs and financial loss values of the plant from the technical analysis, and then reintroduces them into the financial part of the analysis using suitable formulations. With this approach, the engineers will be able to perform risk and technical assessments without information on sensitive, confidential and uncertain financial loss values.