A probabilistic spinning reserve market model considering DisCo' different value of lost loads

In practice, some customers like industrial ones have higher value of involuntary lost load (VOLL) than other customers and thus, are willing to pay more for higher reliability levels than those with less VOLL, and consequently, they are more concerned with their individual load point reliability. Considering this fact, this paper proposes a new model, which makes distribution companies (DisCo)s able to select their reliability preferences by declaring their VOLLs. Based on the proposed model, firstly, a probabilistic security constraint unit commitment problem (SCUC) is used to clear energy and spinning reserve markets simultaneously in order to determine system spinning reserve requirement in this paper. Also, the expected load interruption costs of DisCos are incorporated in the SCUC objective function. Secondly, a new cost allocation method is proposed to evaluate each DisCo's reserve cost, and finally, in the case that an outage happens in the system, a relevant approach is proposed to assess each DisCo's share of that outage such that each DisCo's reliability preference is fulfilled. IEEE reliability test system (IEEE-RTS) is used to demonstrate the effectiveness of the presented model.