Reliability Centered Capacity Management in Deregulated Power Market

The thrust toward deregulation and delicensing of the electric utility industry has brought significant transformation in modern power distribution systems. In vertically integrated power systems, the capacity reserve (CR) allocation is centrally managed to meet the system performance standards under any outage condition. However, due to deregulation and delicensing of power distribution, entry barriers for private players for creating competition in the power market are reduced, enabling consumers to purchase the CR directly from the preferred energy providers based on their reliability levels. In this paper, an attempt has been made to illustrate how capacity reserve management (CRM) in a deregulated environment is done based on customer’s reliability satisfaction. The well-being framework is applied to develop the reliability model of a bilateral power market. A new index, CRAI, has been introduced to measure the availability of CR and examine the risk of the system. The proposed concepts have been exemplified in Roy Billinton Test System (RBTS).