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Optimal Electricity Transmission Reliability: Going Beyond the N-1 Criterion

Abstract:
In the presence of transmission outages, uncertain demand and variable renewable supply, network operators keep a reliability margin to avoid interruptions and black-outs. The reliability margin is presently determined by the N-1 reliability criterion. Our analytical model defines the optimal reliability margin by balancing congestion costs and interruption costs. This leads to more efficient use of transmission capacity and to smaller investment needs than with the N-1 criterion. A numerical illustration shows the net benefits of the new reliability criterion.

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Energy Specializations: Electricity – Transmission and Network Management; Energy Security and Geopolitics – Energy Security; Energy Modeling – Sectoral Energy Demand & Technology

JEL Codes: Q42: Alternative Energy Sources, Q41: Energy: Demand and Supply; Prices, D81: Criteria for Decision-Making under Risk and Uncertainty

Keywords: Electricity Transmission Reliability, Transmission Investment, Reliability Management, N-1 reliability criterion

DOI: 10.5547/01956574.39.4.mova

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Published in Volume 39, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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