Reliability Models: The Influence of Model Specification in Generation Expansion Planning

This paper is a critical evaluation of reliability methods used for generation expansion planning. It is shown that the methods for treating uncertainty are critical for determining the relative reliability value of expansion alternatives. It is also shown that the specification of the reliability model will not favor all expansion options equally. Consequently, the model is biased. In addition, reliability models should be augmented with an economic value of reliability (such as the cost of emergency procedures or energy not served). Generation expansion evaluations which ignore the economic value of excess reliability can be shown to be inconsistent. The conclusions are that, in general, a reliability model simplifies generation expansion planning evaluations. However, for a thorough analysis, the expansion options should be reviewed for candidates which may be unduly rejected because of the bias of the reliability model. And this implies that for a consistent formulation in an optimization frame- work, the reliability model should be replaced with a full economic optimization which includes the costs of emergency procedures and interruptions in the objective function.