The generation capacity reserve forecasting in power system

The forecasting of generation capacity reserve through the use of well-being indices provides useful information for power system operator about power system security and for power traders about generation reserve pricing. Using this information, the system operator can take actions to provide sufficient generation capacity reserve to meet the required levels of the security parameters. In the paper we propose an efficient algorithm by which the probabilities of near-term well-being indices of generation capacity reserve can be identified. The proposed algorithm is based on the second order Markov chain and Monte Carlo simulation outcomes. Through the calculated distribution of probabilities of well-being indices of various generation capacity reserve levels the additional needs in reserve and their price can be analyzed and traded. The proposed approach is tested on the Bosnian power system.