Effect of frequency and duration of generating unit outages on distribution of system production costs

An investigation is conducted of the effects of the frequency and duration of generating unit outages on the variance of a power generation system´s production costs. Conventional production costing models used by the electric utility industry evaluate the expected generation cost only, but a number of publications have advocated the additional computation of its variance. Analytical formulas are developed for computing this variance when the expected frequency and duration of generating unit outages are given in addition to the generating unit forced outage rates and system load profiles. It is seen that the expected energy produced does not depend on the expected frequency and duration of outages as long as the forced outage rates are kept fixed, but that the variances of the energy produced does. The larger the expected duration of the unit outages, the larger is the variance. A numerical example is given to illustrate this fact, and an explanation for this phenomenon is provided. A numerical example indicates that for a given load duration curve, the variance of the amount of energy produced are relatively insensitive to different chronological distributions of the load profiles