Variance and approximate confidence limits on LOLP for a single-area system

The paper presents a method for recognizing the uncertain nature of generator forced outage rates as used in computing the popular reliability index of LOLP (expected number of days per period on which capacity is insufficient) for a single-area system by treating forced outage rates as random variables with specified mean and variance. An efficient method is presented for computing the variance of LOLP in addition to the mean. Monte Carlo simulation studies indicate that LOLP is approximately gamma distributed regardless of the distribution of generator forced outage rates. Hence, approximate confidence limits for LOLP can be obtained using the gamma distribution with parameters corresponding to the computed mean and variance of LOLP.