EVALUATION OF THE MARGINAL OUTAGE COSTS IN ELECTRIC POWER SYSTEMS

Abstract

Electricity spot pricing has been advocated in the past few years as a potential method for assigning incremental electricity costs to the time of delivery, and sending appropriate price signals to customers. Marginal outage costs constitute an important component of electricity spot prices. These costs are defined as the change in the expected customer outage costs that are incurred due to an incremental load change. The published literature indicates that the methods currently available for calculating the marginal outage costs utilize approximate economic models which do not take into consideration the stochastic nature of the power system and its effects on these costs. This thesis presents a method based on quantitative power system reliability concepts for calculating the marginal outage costs in electric power systems. This method is based on the premise that the marginal outage costs are expected quantities that depend upon two major factors: the customer economic costs that accompany various outage levels and the effects of load changes on the probabilities that these costs will actually be incurred. The proposed method calculates the marginal outage cost as the product of the incremental expected unserved energy and the average cost of unserved energy. A method for calculating the incremental expected unserved energy in generating and composite generation and transmission systems is developed in this thesis. The average cost of unserved energy is represented by the interrupted energy assessment rate. The proposed method is illustrated in this thesis by application to two reliability test systems in order to show the impact of system size on the robustness of the method and the accuracy of the approximations. In addition to the basic studies, a number of sensitivity analyses are conducted to show the impact of selected modelling assumptions and parameters on the marginal outage cost. The results from the sensitivity analyses are then used to provide recommendations for implementing the proposed method in practical systems.