Supply reliability cost allocation under deregulated generation market

A reliability cost allocation strategy under a deregulated generation market is proposed. In a deregulated market, which includes many generation companies and customers, it is a significant issue to keep the supply reliability of the customers. In the proposed method, as an index, EUP (expected unserved energy) is applied to evaluate the system supply reliability and reliability cost for the system is allocated to customers based on their desirable EUP value, which indicates the reliability level of customers, and additional cost arising from operations to satisfy the requests of each customer´s supply reliability is also investigated. Since additional cost is likely to become higher to satisfy the request of the customer seeking the highest reliability, reduction of the cost is achieved by the concept of the reliability cost allocation. The effectiveness of the proposed method is verified through several simulation studies using a test system