An aggregate Weibull approach for modeling short-term system generating capacity

Deregulation of electricity markets is occurring all over the world. This trend introduces new risks and uncertainties into the electricity industry, the most significant being price risk. The spot price of electricity is highly volatile, and the ability to price risk management contracts on this commodity is contingent on a robust and realistic model of the underlying price process. One key driver of electricity spot price is the forced outages of generating plants in the system. The current paper describes a system aggregate model of short-term generating capacity that can be adapted to any generating system of interest. After describing the model, we test it using the IEEE Reliability Test System (RTS).