Integrating high impact low probability events in smart distribution network security standards through CVAR optimisation

Historical deterministic practices and standards used to provide security of supply are based on the occurrence of credible N-1 or N-2-type events, and therefore ignore the occurrence of high impact low probability (HILP) events that may present catastrophic consequences on power supply. It has been also reported that deterministic security standards ignore contribution of smart non-network technologies to security of supply since this is ensured fundamentally through asset redundancy. In this context, we develop an optimisation model for distribution substation design that can determine optimum portfolios of technologies, including both existing assets (e.g. transformers and cables) and new emerging nonnetwork technologies (e.g. demand side response -DSR-), to ensure reliability levels at the minimum possible cost. The model is based on Conditional Value at Risk (CVaR) concepts to limit risk exposure to HILP events, producing highly reliable design solutions. Through this model and its application on several case studies, we first propose a consistent framework for efficiently dealing with HILP events in probabilistic substation design models, and then demonstrate several benefits of DSR in enhancing substation reliability in terms of both (i) average value of performance indicators (e.g. expected energy not supplied) and (ii) their risk profiles, while displacing asset redundancy.