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

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  • Marten Ovaere
  • Stef Proost

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.

Suggested Citation

  • Marten Ovaere & Stef Proost, 2018. "Optimal Electricity Transmission Reliability: Going Beyond the N-1 Criterion," The Energy Journal, , vol. 39(4), pages 211-234, July.
    • Handle: RePEc:sae:enejou:v:39:y:2018:i:4:p:211-234
    DOI: 10.5547/01956574.39.4.mova
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    References listed on IDEAS

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    1. Juan Rosellón & Hannes Weigt, 2011. "A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks: Theory, Modeling, and Application," The Energy Journal, , vol. 32(1), pages 119-148, January.
    2. Hung-po Chao, 1983. "Peak Load Pricing and Capacity Planning with Demand and Supply Uncertainty," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 179-190, Spring.
    3. Severin Borenstein & James. Bushnell & Steven Stoft, 2000. "The Competitive Effects of Transmission Capacity in A Deregulated Electricity Industry," RAND Journal of Economics, The RAND Corporation, vol. 31(2), pages 294-325, Summer.
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    Citations

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    Cited by:

    1. Astier, Nicolas & Ovaere, Marten, 2022. "Reliability standards and generation adequacy assessments for interconnected electricity systems," Energy Policy, Elsevier, vol. 168(C).
    2. Ovaere, Marten & Heylen, Evelyn & Proost, Stef & Deconinck, Geert & Van Hertem, Dirk, 2019. "How detailed value of lost load data impact power system reliability decisions," Energy Policy, Elsevier, vol. 132(C), pages 1064-1075.
    3. Ovaere, Marten & Kenis, Michiel & Van den Bergh, Kenneth & Bruninx, Kenneth & Delarue, Erik, 2023. "The effect of flow-based market coupling on cross-border exchange volumes and price convergence in Central Western European electricity markets," Energy Economics, Elsevier, vol. 118(C).
    4. Ovaere, Marten, 2023. "Cost-efficiency and quality regulation of energy network utilities," Energy Economics, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Electricity Transmission Reliability; Transmission Investment; Reliability Management; N-1 reliability criterion;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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