A new approach for determination and cost allocation of reserve in the restructured power systems

A new approach for reserve capacity determination and cost allocation in the pool-based market model is introduced. In this market, customers have a chance to choose their desired reliability requirements. In the proposed method, after clearing the energy market, reserve market is cleared such that the expected energy not supplied of system becomes equal to or smaller than the standard expected energy not supplied which is determined by Independent System Operator (ISO). This part of reserve cost is allocated among generating units based on their contribution to the reserve requirements. In the second part of reserve market clearing, reserve market is cleared such that the different reliability requirements of different customers are met. This part of reserve cost is allocated among customers according to their reliability requirements. For fairly managing the shortage between different customers in the real time operation, Shortage factor (SF) is introduced. Using the concept of SF, different customers with different reliability requirements can be differentiated in the real time operation. Finally, the proposed method is applied to the RBTS to examine the applicability and effectiveness of the proposed method. (C) 2013 Elsevier B.V. All rights reserved.