ABSTRACT The concept of utilizing the equivalent in the reliability evaluation of large power systems, where sensitivity analysis is to be done or the impact of the further interconnected system is to be examined, is a very powerful and useful tool. In this paper, an adequacy equivalent model of a predefined area of a power system has been developed, utilizing the a.c. power flow method. Two types of equivalencing models, namely, Deterministic and Probabilistic models, are formulated and can be utilized to assess the adequacy of a small area in a composite power system. The equivalent models present the variation of transmission equipment in external areas, utilizing the concept of distribution factors. The validation of the equivalent model is accomplished by comparing results of load flow analysis of the original and equivalent systems. Mismatches may appear for some cases at boundary buses which may be reduced by introducing buffer zones between areas of interest and boundary buses. The execution time required for the adequacy analysis of composite power system is reduced significantly, as the number of slates is reduced significantly with respect to the original system.