Economic value assessment and determination of reliability in generation and transmission expansion

Abstract

Generation and transmission expansion in power market environment is partly a trade-off between economic efficiency and reliability. The key factor is the assessment of reliability, and then the reserved capacity of generation and transmission system is determined. The prevailing reliability assessment methods, by applying outage cost of customer, usually convert system reliability index into economic index to build up the optimal object. Concerning this shortcoming, the paper applies the indifference curve in the economy to establish the reliability assessment and decision-making model in generation and transmission planning, solving the key issue of how to assess the economic value of reliability. Moreover, the paper improves the generation and transmission planning approaches due to the introduced model, and the validity and practicability of the method is proved by the example.