Utilisation of quantitative reliability concepts in evaluating the marginal outage costs of electric generating systems

Abstract

Marginal outage costs are an important component of electricity spot prices. This paper describes a methodology based on quantitative power system reliability concepts for calculating these costs in electric generating systems. The proposed method involves the calculation of the incremental expected unserved energy at a given operating reserve level and lead time and the multiplication of this value by the average cost of unserved energy of the generating system. An extension of the proposed method is applied to interconnected generating systems in order to calculate the impact of assistance from neighbouring systems on the marginal outage cost profile of the assisted system. This method is based on the equivalent assisting unit approach. The methods discussed in this paper are illustrated by calculating the marginal outage cost profile of a small educational test system and by examining the effect of selected modelling assumptions and parameters to see how simplified representations can be used to approximate the results obtained using more detailed reliability models.