Evaluation and allocation of supply reliability cost in electricity market

Reliability cost allocation strategy under partly liberalized generation markets is proposed. In a liberalized market, which includes many generation companies and customers, it is a significant issue to keep the supply reliability for the customers. In the proposed method, as an index, EUP (expected unserved energy) is applied to evaluate the system supply reliability, and reliability cost for the system is allocated to customers based on their desirable EUP value, which indicates the reliability level of customers. Additional cost arising from operations to satisfy the requirements of each customer´s supply reliability is also investigated. The effectiveness of the proposed method is verified through several simulation studies using a test system