I pitched an idea for an apocalypse / horror style game several years back. I think it would have been fun, but basically there are too many holes for most people to suspend disbelief.
The idea was similar. Modern world, but electricity stops working. Electrical impulses no longer flow through wires, lights go out, motors stop working.
Chemistry still works, so a diesel engine might continue running until you need to get it started again. Gas powered cars would immediately fail as their spark plugs stopped firing. Firearms would function. Planes would fall out of the sky, depending on how much they rely on thrust and not aerodynamics.
The world falls into a brief period of anarchy, followed by the establishment of something like feudal states and possibly some enclaves of steam boiler technology that could keep parts world near the early 1900's in terms of tech level.
The problems are the same as have been described here. "What about your brain, and entire nervous system?" and then the more thoughtful folks chime in "how about electromagnetism, and the Sun, and the bonds between atoms?" and there's really no good way to explain it.
It would have to be at least quasi mystical, or spiritual, or religious. There was a short story by Neil Gaiman (i think) that basically stated as its premise that "God has taken away all the animals. People don't get to have animals any more." and that was that. No explanation, just a divine act. Or, it could be like the Z'bri from Tribe 8. They show up, and the world changes. Bam. Or the world falls out of space and into the hands of mad gods, Yog Sothoth style.
Anyway, the point is that this stuff cant be explained to much without it being cheapened or becoming contrived or just dumb. It needs to follow some set of rules (what exactly works and does not work) without getting too bogged down in the "why" of any of it. The setting needs to be consistent, otherwise it is just arbitrary and not enjoyable -- but it can't be over examined or it will just fall apart.