Blackout worth three quarters of a billion

On Friday, 4 July 2025, a large-scale power outage occurred in the Czech Republic, affecting mainly Prague, the Central Bohemian Region and parts of other regions. The outage began around noon and lasted approximately 10 hours, with full restoration of supply not occurring until the evening. According to the transmission system operator ČEPS, the outage affected connections with a total capacity of up to 2,700 MW, which corresponds to approximately one-third of the normal load on the Czech transmission system at that time. The cause was a fault on the line between the Výškov and Čechy Střed substations, which caused instability in the grid. The outage affected transport (e.g. the metro and trams in Prague), businesses and households, and caused considerable economic damage.

One way to quickly estimate the economic impact of the damage caused by the power outage is to use information on the energy intensity of the economy, i.e. a comparison of electricity consumption and GDP data. Net electricity consumption last year was 58 GWh, and the estimate for this year is similar. GDP at current prices will be around CZK 8.5 trillion this year. From 1 kWh of electricity, the Czech economy can generate GDP worth approximately CZK 145. From hourly grid load data published by the transmission system operator ČEPS, a comparison of data from the same days in previous weeks estimates the drop in electricity consumption between 12:00 and 17:00 at 7.2 GWh, i.e. CZK 1.0 billion. However, it should be noted that electricity consumption is slightly lower in July due to holidays and vacations. Last year, the seasonal decline in July was about 3.7%. The adjusted estimate of the blackout's scope is 5.6 GWh, or CZK 820 million.

The second option for estimating economic losses is the Value of Lost Load (VoLL) model. The VoLL method is an economic indicator expressing the value that customers attribute to a reliable electricity supply, i.e. the financial loss they suffer as a result of an outage. It is usually expressed in euros or korunas per megawatt hour. VoLL is determined using various methods: questionnaire surveys (willingness to pay or accept compensation), analysis of production losses, or based on real decisions (e.g. investments in backup sources). It is used to assess the reliability of supply, plan infrastructure, and estimate the economic impact of power outages. For the Czech Republic, ACER (European Union Agency for the Cooperation of Energy Regulators) estimates the value of VoLL at EUR 4,000/MWh. With the above-mentioned extent of the power outage, this would mean losses of approximately CZK 600 million.

The blackout cost the Czech economy around three-quarters of a billion Czech korunas and clearly demonstrated the high economic value of a stable electricity supply and how sensitive the modern economy is to its interruption. In the future, therefore, issues of transmission system reliability, backup solutions and crisis management should be considered key not only from a technical but also from a macroeconomic perspective.