Cost/benefit approach to establish optimum adequacy level for generating system planning

Abstract

There is an increasing worldwide interest in economic optimisation approaches for power system expansion and reliability planning. The reliability-cost/worth approach for assessing an optimal level of customer service reliability is based on calculating the costs associated with different system configurations and evaluating the corresponding reliability worth at the customer level. This optimality condition simply intends that the marginal dollar spent to improve service reliability should yield the same benefits to consumers. The application of basic adequacy assessment concepts to generating capacity evaluation is relatively straightforward and the basic concepts are well known. The application of the optimality condition to evaluate simultaneously optimal generation investments and reliability levels is complicated by the difficulty of estimating the functional dependence of consumer interruption costs upon alternate generation and reliability levels. This difficulty has resulted in a number of studies directed towards estimating customer interruption costs. This paper utilises the economic criterion for system optimisation which extends the traditional approach by treating the reliability level as a variable to be optimised. The method is illustrated using the IEEE Reliability Test System (IEEERTS).