Evaluation of the marginal outage costs in generating systems using quantitative power system reliability techniques

Abstract

Marginal outage costs are an important component of electricity spot prices. This paper describes a methodology based on quantitative power system reliability techniques for calculating these costs in generating systems. The proposed method involves the calculation of the incremental expected unserved energy at a given operating reserve and lead time and the multiplication of this value by the average cost of unserved energy of the generating system. The method is illustrated in this paper by calculating the marginal outage cost profile of a small reliability test system. The effects of selected modelling assumptions and the accuracy of a number of approximate methods for calculating the marginal outage cost are also examined.