Reliability transaction and pricing under power system deregulation

Under deregulation, different customers require different levels of reliability; different generator units have different reliability. How to price the reliability in electricity market is one of the most important tasks for power system reliability analysis. In this paper, relation between backup capacity and supply reliability is established based on load forecasting probability density function. The reliability charging rates for customer load with different reliability requirements are determined by using back up reserve cost. Under reliability market, load customers bid the reliability requirement and price to the power transaction center (PX) according to their own reliability demands and the published reliability costs. The reserve schedule is determined according to customer reliability requirements and back up reserve market price. The PX calculates the required added back up reserve capacity caused by generation unit outage, and further the reliability charging rates for generation unit is determined. Load point reliability can be maintained by controlling the load curtailment when system load is greater than the total capacity of scheduled generators and back up units in real time operation. The proposed method can be used to price the customer reliability and generator unit reliability. It can also be used to determine system back up capacity requirement. System analysis is presented and the simulation results are very encouraging.