Probablistic Planning

PARSONS BRINCKERHOFF ASSOCIATES
PROBABILISTIC TRANSMISSION PLANNING

Comparative Options & Demonstration
CONFIDENTIAL
Prepared for
August 2004
PB Associates Quality System

Document Reference
p:\pba\150251 Probabilistic Transmission Planning
Report Revision
2.0
Prepared by
Michael Emmerton, Don Somatilake
Reviewed by
Bruce Stedall, Ryno Verster
Approved by
Steve Wightman
Date Created
8 June 2004
Date Issued
9 August 2004
PB Associates

TABLE OF CONTENTS
SECTIONS
EXECUTIVE SUMMARY.....1
1.
2.
3.
4.
INTRODUCTION......................................................................................................... 10
1.1
Background and Scope...................................................................................... 10
1.2
Objectives .......................................................................................................... 10
1.3
Structure of the Report....................................................................................... 10
HISTORICAL DEVELOPMENT .................................................................................. 11

2.1
Limitations of Deterministic and Probabilistic Techniques .................................. 11
2.2
Methodologies.................................................................................................... 12
2.2.1
Enumeration Markov (Billinton (1984))............................................... 12
2.2.2
Enumeration - Frequency/Duration (Halperin/Adler (1958)/ Billinton
(1984)................................................................................................... 13
2.2.3
Monte Carlo.......................................................................................... 13
2.3
Modelling ........................................................................................................... 14
2.3.1
Sources of Uncertainty ......................................................................... 14
2.3.2
Software Tools ..................................................................................... 15
2.3.3
Transmission versus Generation Detail ................................................ 15
2.3.4
Commercial Planning Software ............................................................ 17
INTERNATIONAL PRACTICE.................................................................................... 18
3.1
United States ..................................................................................................... 18

3.1.1
ERCOT ................................................................................................ 19
3.1.2
California ISO....................................................................................... 19
3.2
Canada .............................................................................................................. 21
3.2.1
Ontario Hydro....................................................................................... 21
3.2.2
BC Hydro.............................................................................................. 23
3.3
Australia............................................................................................................. 23
3.3.1
Victoria - VENcorp................................................................................ 24
3.3.2
New South Wales - TransGrid .............................................................. 24
3.4
Europe ............................................................................................................... 24
3.4.1
United Kingdom (National Grid PLC) and France (EDF)....................... 24
3.5
Asia.................................................................................................................... 25
3.5.1
Hong Kong - Kowloon........................................................................... 25
3.5.2
Singapore Energy Market Authority (EMA) ........................................ 25
3.6
New Zealand...................................................................................................... 25
NEW ZEALAND MODEL SPECIFICATION................................................................ 27

4.1
Value of Customer Reliability (VCR) .................................................................. 27
PB Associates
5.

4.2
Demand-Side Management ............................................................................... 27
4.3
Technological Advancement & Thermal limits .................................................... 28
4.4
Specification 1 VENCorp Model (Markov States Model) ............................... 29
4.5
Specification 2 Frequency & Duration Model ................................................ 34
4.6
Specification 3 Monte Carlo Model ............................................................... 35
4.7
Specification 4 Load Management All Methods.......................................... 36
RESULTS OF ECONOMIC PLANNING EVALUATIONS ........................................... 37

5.1
VENCorp Model (Markov States Model) .......................................................... 37
5.2
Frequency- Duration Model ............................................................................. 48
5.3
Monte Carlo Model .......................................................................................... 57
5.4
Load management Model ................................................................................ 58

C1
C2.
CREAM Monte Carlo Composite Reliability Model ........................ 5-2

Hydro-Thermal Optimal Dispatch Models ......................................... 5-3
APPENDICES:
Appendix A: NERC N-1 Standards
Appendix B: Samples Of Model Assumptions
Appendix C: Discussion of CREAM and SDDP software packages
Appendix D: Bibliography
PB Associates

EXECUTIVE SUMMARY
Background
Prior to the 1980s, the development of transmission networks was largely undertaken
in accordance with deterministic planning and design standards.
A commonly held standard was the N-1 criterion. The N-1 criterion states that a
transmission grid network should be designed to maintain supply to customers in the
event of the loss of any single load-carrying segment in the grid. Under the N-1
criterion the number of load segments and their design capacities are determined by
the peak demand expected to be served at the bulk-supply grid exit points.
In practice the criterion is easy to understand and apply by stakeholders, but the
downside is that it results in the development of a network that can be under-utilised
except for short periods of high electricity demand. This problem is most pronounced
when demand is characterised by needle peaks characterised by 50-100% increases
in peak demand for a few hours of the year.
When electricity markets began to liberalise, planning authorities devised mechanisms
to encourage business efficiency whilst maintaining security of supply within acceptable
limits. A guiding principle was that the community should have choice in relation to the
level of grid security maintained throughout the year.
For this a grid benefits test was proposed whereby the cost of a transmission
investment proposal was tested against the benefit that customers placed on the
provision of an adequate and secure supply. A grid benefits test provides a marketsignal for the new investment needed to meet a growing demand for bulk transmission
capacity. In essence, such a test establishes the economic worth of reliability of the
transmission grid.
At the same time it was recognised that the determination of grid benefits required new
techniques to assess the time varying nature of the risk of a loss of supply. Typically
the consequence of a supply loss is lower on weekends and early in the morning when
demand is well below peak. At times of peak demand, if the weather conditions are
calm, the likelihood of a supply loss can still remain low. At times of low demand the
consequences of a supply loss may be acceptable as the customer impact can be
relatively low.
Probabilistic transmission planning techniques are used to determine the total
Expected Un-Served Energy (EUE) for a given time period (usually annual) taking into
account the probability of the availability of transmission and generation plant.
The final determination of the benefits of a transmission investment proposal hinges on
the determination of the value that customers place on the un-served energy. Each
class of customer places a different value on the loss of a kilowatt-hour of electricity.
This means that the total value of the EUE is the sum of the value for each customer
class multiplied by the amount of energy supplied to each customer class1. As
customers are usually supplied from a shared transmission grid, the total loss of benefit
is the driver for investment purposes.
Usually expressed as the Value of Customer Reliability (VCR)

August 2004
PB Associates

This paper addresses a requirement to demonstrate the above principles using up-todate techniques and concepts increasingly being adopted in liberalised markets
throughout the world. To this end, the objectives of this Report are as follows:
1. Grid Benefits Test: To present a hypothetical investment plan based on an
economic evaluation of investment alternatives for a simple transmission
system and thereby:
quantify the likelihood and consequence of a supply loss, and
apply the grid-benefits test to the plan.
2. Probabilistic Planning: To illustrate the technical application of three

probabilistic transmission planning methods, highlighting the strengths and
weaknesses of each method and making recommendations for use with the
New Zealand transmission grid;
This Report does not attempt to define a Value of Customer Reliability (VCR)2, but it is
noted that the grid benefits test depends on having a VCR figure for New Zealand and
further work is required to establish a robust figure.
Test System
To provide a basis for analysis associated with achieving the above objectives a
common 220kV transmission system model was used as shown in Figure 1. This
corresponds to the system between Islington and Kikiwa on South Island in New
Zealand.
The model included load and duration curves for the 220kV busses, the failure
probabilities of transmission grid segments and the availability and output capacity of
generation sources. For the analysis involving probabilistic techniques additional
information was also required including the frequency and duration of grid segment
outages.
Over a hypothetically chosen 20 year planning horizon, if nothing was done (do
nothing) to the transmission system the EUE would increase from about 60MWh/year
to 1,100MWh/yr as shown in Figure 2.
For the purpose of our analysis, we use a VCR customer benefit of A$29,400 per megawatthour as the value of un-served energy during high demand periods. We have taken this figure,
without adjustment, directly from published guidelines of the Victorian grid planning authority
VENcorp in Australia. A comparable figure is not available for New Zealand.
August 2004
PB Associates

210 270 MW Regional Load

Generation
Argyle
0 10MW
at
Generation at Cobb 0 - 30MW

KIKIWA BUS 220kV
Circuit A
Circuit B
ISLINGTON BUS 220kV
Generation
from South
Figure 1: Northern South Island System Model

1200
ENERGY NOT SERVED (MWh)
1000
Monte Carlo
Markov States
F&D
800
600
400
200
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 2: Comparison of EUE for different probabilistic methods
Application of the Grid Benefits Test

The grid benefits test of New Zealand requires that a net positive benefit is shown in
order for an investment to proceed. The grid benefit should also be maximised by
The Monte Carlo results were based on a simulation of 50,000 trials. By comparison, a three
million trial version delivers exactly the same result as the Markov and Frequency and Duration
methods.
August 2004
PB Associates

choosing the optimum mix of investment alternatives and timing the investments
appropriately.
For the Test System, a deterministic solution would require a 3rd circuit immediately.
For our demonstration, consideration was given to a range of individual investment
options and the expected un-served energy was calculated and valued against an N-1
criteria. A composite 20 year investment plan was also considered, comprising a mix
of options including:
1.
A third 220kV circuit (capital cost $15M, lead time 4 years);
2.
A 20MVar capacitor bank (capital cost $600k, lead time 1 year); and
3.
A 50MW diesel station supply at 110kV (capital cost $70M)4.
A demand side management (DSM) option was also considered. For this study the
model assumed that a hot water load reduction opportunity is available between 11pm
and 6am, offering a 10% - 15% peak reduction in two tranches (cost $2M for first 10%,
$2M for next 5%, lead time 2 years in both cases).
The composite plan calls for a 20MVAr capacitor bank installed in Year 0; 10% DSM
undertaken in Year 2; 15% DSM undertaken in Year 4; and a third 220kV circuit
installed in Year 8.
The variation in EUE with time, for the hypothetical investment plan is show graphically
in Figure 3 (a Composite Investment Plan):
EXPECTED UN-SERVED NERGY (MEGAWATT-HOURS)
120
20MW CAPACITOR
100
80
3RD CIRCUIT
10% DSM
15% DSM
60
40
20
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 3: EUE For Composite Investment Plan

Table 1 shows the Net Present Value (NPV) calculation for the Composite Investment
Plan. For comparison purposes, Table 2 shows the NPV calculation for an investment
4
The diesel power station alternative offers benefits other than the improvement of transmission grid
security. Accordingly, for purposes of economic evaluation the investment should only be a part cost. The
diesel power station could be treated as an ancillary service (supporting grid reliability) annual service
payment.
August 2004
PB Associates

plan in which a 3rd transmission circuit only is installed (Third Circuit Investment),
assuming commissioning at latest possible timing in 2009 (to maintain a criteria of N).
Table 1: Composite Investment Plan
August 2004
PB Associates

Table 2: Comparison with Third Circuit Investment
The difference in NPV of $212k shows that the composite investment plan delivers
greater benefit when compared to solely investing in the 3rd circuit option5 detailed in
Table 2. It is therefore shown that deferral of the third circuit through alternative
augmentation methods can yield benefits. Importantly this also demonstrates that
whilst both grid benefits tests have yielded a net positive benefit the optimum
mix of investment alternatives and timing of the investments needs to be
considered to maximise the benefit.
Application of Probabilistic Planning Methods
Three probabilistic transmission planning methods have been demonstrated, namely:
1. Markov State method (TMS). In this method, sometimes known as the Billinton
method, the probability of a range of possible system states is used to determine
the amount of EUE. The amount of EUE is a function of the failure of generation
and transmission equipment under a wide range of operating conditions. It is
relatively simple to apply, but does not take into consideration the frequency and
duration of abnormal events experienced by the customer.
2. Frequency-Duration method (TFD). This method uses the anticipated frequency
and duration of transmission system outages, based on historical data. Generation
is constrained according to discrete scenarios. Frequency and duration of energy
losses are derived recursively from the frequency and duration information of grid
segment outages. This method is more difficult to apply, but has the advantage
that the computation of customer risk indices is straightforward. There is some
5
The analysis is simplified and while the principle of investment deferral delivers guaranteed savings, the
quantum of savings may differ from those shown.
August 2004
PB Associates

difficulty involved in modelling the capacity availability of hydro generating units due
to uncertainties in inflows.
3. Monte Carlo method (TMC). This method introduces a random simulation method
to model a wide range of generation, load and transmission system states. This
modelling approach can account for the unreliability/flexibility of a mixed hydrothermal system but is more difficult to apply and requires long computation times,
particularly when the failure rates of elements are very low.
A comparison of the EUE computed by each of the methods using the Test System is
shown in Table 3.
Table 3: Forecast EUE Using Three Methods
Note that the model includes an N-2 option, necessary to incorporate a 3rd transmission
circuit. These results show that the methods deliver a similar forecast for EUE.
From a technical perspective, the three methods offer comparable results, with the
Frequency and Duration method of greatest general applicability for
consideration of small area investment planning:
Planning
Method
Strength
1. Markov Method
2. Frequency and
Duration Method
3. Monte Carlo
Method
Defines adequacy of
supply. Security is
defined from a grid
viewpoint.
Defines adequacy.
Security is defined
from a grid and
customer viewpoint.
Historical frequency
and duration data can
be exploited to
improve EUE forecast
accuracy.
Defines adequacy and

security. Useful for
consideration of
flexible hydro
generation and remote
control of customer
demand.
August 2004
PB Associates
Weakness
Suitability for
New Zealand?

Relies on subjective
assessment of
probability of grid
segment failure.
Customer risk indices
not readily available.
Relies on availability of
frequency and duration
data pertaining to
outages.
Iterative solution
process requires many
hours for convergence
when system is highly
reliable e.g. 20 hours
for a simple system,
single scenario & 20
year forecast
Most suitable
Least suitable, but

some useful for cases
where hydro
reliability/flexibility is
likely to be an issue
Suitable as quick
method of assessment
The Frequency-Duration method is computationally more difficult to apply, but delivers

superior results to the Markov States method. The divergence between the Frequency
and Duration method and Markov States method is very sensitive to the choice of
frequency or duration. This is because the F&D method correlates the probability of
elements failures against the demand cycle based on historical data.
Note that the F&D forecast in Table 3 has been forced to yield the same results, by
choosing frequencies and durations that ensure this outcome. In practice this may not
be so, and hence historical information pertaining to system performance and load
cycles can be exploited to make more forecasts more accurate.
The Monte Carlo method is very time consuming to apply as it requires many hours of
computing time to yield accurate results particularly when transmission reliability is
high. It produces identical results to the Markov States model if the number of trials is
sufficiently high.
Conclusions
Suitability of Probabilistic Planning Techniques
1. The three methods have been shown to produce similar forecasts for EUE
(Markov and Monte Carlo are identical if the number of trials is high).
2. The most accurate method, suitable for New Zealand, is the F&D method. It is
potentially more accurate if historical data is available.
Benefits of Probabilistic Planning Techniques
1. The economic evaluations applied to the Test System clearly demonstrate that
the probabilistic techniques support the deferral of a third circuit for 8 years.
Under an N-1 deterministic planning approach the circuit would be required
immediately. While the Test System is a limited application the principle can be
seen to apply in other liberalised markets and will have broad application for
New Zealand.
2. The results are sensitive to the choice of VCR, and care must be taken to
choose an appropriate VCR value.
August 2004
PB Associates

3. In the interests of efficiency, a robust planning process would comprise an initial

high level screening of supply adequacy, followed by the application of
probabilistic planning techniques at a local area level.
Recommendations
Given the complexity of probabilistic planning techniques for widespread application to
the NZ grid, combined with the need for planning methods that are easy to understand
and apply by the wide range of emerging stakeholders, deterministic criteria provide a
good indicator as to the requirements for maintaining an appropriate security of supply
on the grid and should continue to be used. However, we recommend that the
Commission implement the use of probabilistic transmission planning methods in
conjunction with deterministic criteria, in the first instance, as a means of ensuring
future investments in the New Zealand grid provide an appropriate cost/benefit, in
accordance with a transparent transmission planning standards policy guideline similar
to those in force in other regulatory jurisdictions operating liberalised market
economies. This would require several actions:
1. The introduction of best practice system planning guidelines that specify the
processes to be followed by a transmission planning authority, thereby
ensuring that least cost planning is pursued through economic consideration of
alternatives in other liberalised market jurisdictions, the guidelines include an
audit/compliance mechanism.
2. Ensure that transmission planning is performed using suitable algorithms for
security and adequacy assessments of the New Zealand mixed hydro-thermal
system. Given the unique characteristics of the system, it may be more
suitable to develop specific probabilistic transmission planning models at an
area planning level (or for transmission corridors), to permit optimisation to
meet objectives. Ensure that the software employed does not simplify the task
to the extent that the value of the probabilistic planning approach is lost.
3. Consideration of a study that explores the benefits available through strategic
use of energy management tools that deliver supply side energy reduction.
Chief among these tools are load management schemes such as ripple control
systems that control energy-intense hot water heating and refrigeration
systems. It is understood that the South Island of New Zealand could gain a
short-term benefit from such an approach. A feature of price-cap regulation is
that there is no incentive for such schemes, but New Zealands regulatory
framework does not mitigate against such an approach.
August 2004
PB Associates
1.

INTRODUCTION
This study was commissioned by the Electricity Commission.

1.1
BACKGROUND AND SCOPE

The study was prompted by a need to examine alternative options available in
support of optimised investment planning, based on a prudent and wellconsidered approach to the quantification of risk from a transmission system and
customer perspective.
1.2
OBJECTIVES
The objectives of the study are to prepare a paper to the satisfaction of the
Electricity Commission which will address concepts and issues with respect to
comparative options available for probabilistic planning for the interconnected
generation/transmission system in New Zealand, including:
1.3
1.
A best practice explanation of the probabilistic planning techniques in use

in other countries with national transmission grids, covering both
enumerative (Markov, F&D) and Monte Carlo methods; and
2.
Demonstration of the techniques including technical and economic

evaluations of feasible alternatives that would result in deferral of
augmentation investment and least cost outcomes.
STRUCTURE OF THE REPORT

The report begins with a general description of probabilistic transmission planning
methods and how such methods differ from traditional deterministic methods.
The advantages and disadvantages of the approaches are discussed in general
terms.
The discussion then provides a more detailed description of each of the
probabilistic transmission planning methods demonstrated in this paper before
moving on to discuss the wide variety of computer-based tools available that
support probabilistic transmission and generation planning.
A comparison is made of international practices in use by international
transmission planning authorities. This information is meant to provide a
backdrop against within which to consider the approaches that are of relevance
to the New Zealand environment.
At this point, models are described for each of the demonstration techniques.
Then the results of the modelling are presented in summary form. Various
appendixes containing relevant support material are included at the end of this
report.
The Executive Summary summarises the work and highlights a number of
recommendations to take the work forward.
August 2004
10
PB Associates
2.

HISTORICAL DEVELOPMENT
This section of the report briefly discusses the historical development of

probabilistic planning techniques. The limitations of both probabilistic and
deterministic planning approaches are explored. The basic analytical methods
are described and linked to the development of probabilistic planning tools, and
the limitations of current planning tools are described. This discussion is
background to the following section where the contemporary practices of leading
utilities are examined.
2.1
LIMITATIONS OF DETERMINISTIC AND PROBABILISTIC TECHNIQUES

A transmission grid investment decision-making process, based on a probabilistic
analysis of energy at risk, includes consideration of the probability-weighted
impacts on supply reliability of unlikely, high cost events.
Typical such events are single and multiple outages of transmission elements,
generation or rotating reactive compensation plant, and unexpectedly high levels
of demand.
Deterministic approaches usually consider the worst-case scenario.
The
selection of the worst-case most often involves a degree of subjective judgement
and is therefore difficult to justify as part of an economic decision-making
process. Deterministic methods also impose a hard limit on system operations.
As a result, systems are often designed, planned or operated to withstand severe
problems that have a low probability of occurrence. The economic result may be
lower than necessary utilisation and higher investment than is warranted;
however their application is simple and therefore easily understood and
interpreted.
Probabilistic techniques consider factors that may affect the performance of the
system and provide a quantified risk assessment using performance indices such
as probability and frequency of occurrence of an unacceptable event, duration
and the severity of unacceptable events etc. These performance indices are
sensitive to factors that affect the reliability of the system. Quantified descriptions
of the system performance, together with other relevant factors such as
environment impact, social and economic benefits etc., can then be entered into
the decision-making process. The end result of the analysis is a sound actuarial
estimate of the expected value of energy at risk. When investment decisions are
based on energy at risk considerations, it is on the understanding that there may
be circumstances when the planned capability of the network will be insufficient
to meet actual demand.
Deterministic methods alone cannot adequately address the various transmission
challenges such as the optimising the available transfer capability (ATC), long
transmission and related voltage/reactive and security (stability) problems,
transmission project ranking, transmission congestion alleviation, uncertainty of
weather, uncertainty of customer load demand, or uncertainty of equipment
failure and operation.
The following table compares the limitations of deterministic and probabilistic
approaches in planning.
August 2004
11
PB Associates

Deterministic
2.2
Probabilistic
Contingency
Selection
Typically a few probable and

extreme contingencies
More exhaustive of
contingencies
Contingency
Probabilities
Implicit, based on judgement
Explicit, but generally

based
Load Levels
Typically seasonal peaks and

selected off-peak loads
Multiple levels
Analysis
Steady state/dynamics
Steady state as at present
Reliability
None
Various indices calculated
Criteria for
Decisions
Well established
Need a cautious approach

to select criteria due to
limitations in data
contingency probabilities
and the models
METHODOLOGIES
Transmission grid planning methodologies fall into deterministic and probabilistic
approaches and are often of a hybrid nature.
The N-1 criterion is a common deterministic approach. The N-1 criterion states
that a transmission grid network should be designed to maintain supply to
customers in the event of the loss of any single load-carrying segment in the grid.
Under the N-1 criterion the number of load segments and their design capacities
are determined by the peak demand expected to be served at the bulk-supply
grid exit points.
There are three main categories of probabilistic methods :
1. Enumeration methods use Markov models and Markov chains to
evaluate reliability of generation and transmission elements and
systems respectively.
2. A frequency and duration method develops reliability indices for
load points and for overall system adequacy for generation only or
for a composite system evaluation.
3. Monte Carlo methods are used to run probabilistic simulations for
generation only (production costing) and for composite system
evaluation.
2.2.1
Enumeration Markov (Billinton (1984))

Enumeration methods (sometimes referred to as Billinton method or analytical
method) calculate the probabilities of discrete states. These methods explicitly
enumerate selected configurations of randomly outaged lines and generators.
The states are known are Markov states, and the states are chained together to
August 2004
12
PB Associates

simulate particular states of interest. A key requirement of this method is the

ability to identify failure states and to assign probabilities to state transitions.
2.2.2
Enumeration - Frequency/Duration (Halperin/Adler (1958)/ Billinton (1984)

The frequency/duration method computes probabilistic indices that cover a wide
range of operating conditions and contingencies. They are based on the number,
degree and duration of violations. The indices are highly suitable for handling
uncertainty (e.g. market-driven dispatches and future generation scenarios), and
define risk.
A key requirement of this method is to determine the rate of departure from a
given system state, and the frequency of occurrence of that state. The probability
can then be determined by the product of these quantities.
Risk-based indices can define absolute risk, relative risk and the sharpness of
violations.
The absolute risk indices reflect the magnitude of transmission problems via
expected duration, number of affected facilities, and mean degree of violations measured in minutes of overloads/voltage problems per year.
Relative risk is computed by normalizing the absolute risk with respect to the
number of circuits/buses in the study zone. Relative risk indices identify parts of
the system where violations are most intense when compared to the system size
- measured in minutes of overloads/voltage problems per circuit or per bus per
year.
The sharpness of violation quantifies the degree of locality of transmission
problems - measured in %. The score is zero if ALL facilities in the area are
affected by violations. It is equal to 100% if just ONE bus/circuit is affected. This
index focuses attention to the areas with high risk and areas with high risk and
high sharpness.
There is some interest in North America, to link such probabilistic indices with
NERC Planning Standards and to build probabilistic planning criteria based on
the combined approach.
2.2.3
Monte Carlo
In contrast to enumerative methods, Monte Carlo methods are usually associated
with production costing models. A production costing model uses optimum unit
commitment and optimum incremental hourly dispatch, and Monte Carlo methods
are used to model the generator failure states.
The Monte Carlo methods used to assess the reliability of generation lead to very
long computation times when the transmission network has built in redundancy or
is highly reliable (usually the case). Conversely the enumeration methods used
to assess the reliability of the transmission network lead to a very large number of
possible states (generator models have many production states) with a
correspondingly long computation time. Nevertheless, academia and some
vertically-integrated national electricity companies have continued to pursue the
development of Monte Carlo methods during the last decade.
August 2004
13
PB Associates

There are three methods that are popularly employed in Monte Carlo analysis to
analyse composite generation-transmission networks. The methods are known
as the state-sampling method, the state-transition sampling method and the
sequential method. Each method relies on enumeration to varying degrees. The
sequential method combines the first two methods.
It is beyond the scope of this discussion to concern ourselves with the details of
how these methods work. It is sufficient to be aware that a composite
generation-transmission analysis problem requires the generation outage
configurations to be examined more completely than enumeration methods are
capable of providing in their own right. In general a Monte Carlo method
increases in computer run time and decreases in accuracy in proportion to
generation reliability, which occurs when an entire network is examined. In a
very large network with thousands of transmission nodes and hundreds of
generators, Monte Carlo methods often fail to converge and more sophisticated
mathematical techniques are employed.
As the New Zealand transmission system is relatively small, it is likely that Monte
Carlo methods would converge within reasonable time limits.
2.3
MODELLING
2.3.1
Sources of Uncertainty
The sources of uncertainty that must be accounted for in a probabilistic-based
software model are somewhat daunting:
Sources of Uncertainty
Contributing or Causal Factors
Generation Availability
Unplanned outages, equipment failures,

protective
relaying,
economic
factors
including fuel prices and market prices,
reserve
availability,
reactive
power
requirements, climactic variables such as
precipitation and hydro-power availability,
environmental
regulations
including
emissions restrictions, generating station
openings and closings
Transmission Capacity
Line
ratings,
weather-related
factors
including ambient temperature, wind and ice
storms,
geophysical
events
including
lightning and earthquakes, geomagnetic
storms, unplanned outages and equipment
failures, trans-regional power exchanges
August 2004
14
PB Associates
2.3.2

Load
Weather-related
factors
including
temperature and precipitation, economic
factors including economic growth, new types
of
electronically-controlled loads,
and
variations in load power factors.
Distribution System
Equipment failures, unplanned outages,

economic factors including distribution
classes, load shedding policies, weather
related factors such as ambient temperature.
Software Tools
Various network analysis software packages are available. These were generally
developed to meet a particular requirement or to overcome a limitation of an
earlier version of software. When the algorithms are iterative in nature and the
transmission network and generators achieve very high levels of reliability, it can
require extremely long processing times for the iteration to converge, or
convergence fails.
In general, different software techniques are used for generation and for
transmission modelling. The software used for reliability evaluation of generation,
often developed as production models using Monte Carlo techniques.
Transmission software developed mainly using Markov chain models, and
reliability index methods.
Production costing methods (Monte Carlo) tend to fail when generators and
transmission networks are highly reliable and have redundant elements.
Transmission reliability methods fail to model generators effectively when the
number of states to be modelled becomes very large. Usually generators are
combined or treated as a single entity occupying multiple states and such
simplifications result in low accuracy simulations.
2.3.3
Transmission versus Generation Detail

In figure 7 below, various software packages are compared. The figure shows
the trade-off between software program complexity in generation and
transmission representation of detail, both electrically and probabilistically.
Programs with very detailed probabilistic transmission analysis are usually
incomplete in the treatment of random generator outages (such as TRELSS).
The opposite is also true. Programs that have a complete treatment of the
random outage of generators have a highly reduced transmission network
capability (such as MAREL).
August 2004
15
PB Associates

simplified
TRELSS
PSSE/TPLAN
DIgSILENT RECS
SDDP
CREAM
SYREL
COMREL
equivalent
TRANSMISSION DETAIL
detailed
TRANSMISSION VERSUS GENERATION DETAIL
complex
simple
NARP
ENPRO
MECORE
trivial
PLF
MAREL
GRIP
PROMOD
none
GENH
none
a few selected
Monte Carlo
all configurations
GENERATION DETAIL
Figure 7: Transmission Versus Generation Detail
Existing power system models that use probabilistic methods to perform system
studies include EPRIs Transmission Reliability Evaluation of Large Scale System
(TRELSS) and Composite Reliability Assessment by Monte-Carlo (CREAM);
GEs Multi-Area Reliability Simulation (MARS) and Market Assessment and
Portfolio Strategies (MAPS); Power Technologies Local Area Reliability
Assessment (LARA) and Multi-Area Reliability AnaLysis (MAREL). Other
probabilistic-based tools from vendors outside the U.S. include Powertech Labs
COMposite RELiability (COMREL) and STAtion RELiability (STAREL) developed
by the University of Saskatchewan, Canada, and BC Hydros Montecarlo
Evaluation of COmposite system REliability (MECORE), also developed at the
University of Saskatchewan.
Stochastic Dynamic Programming (SDDP)
developed and managed by Power Systems Research Inc of Brazil (hydrothermal power station planning optimisation).
There are various generation reliability programs and composite reliability
programs being used outside of the North America. Researchers in UK, France,
Italy, and Brazil etc., are actively developing and implementing probabilistic
techniques in power system planning and operating. At the present time some of
the major contributors are R. Billinton (Canada), V. Vittal & J. McCalley (U.S.),
A.M. Leite da Silva & J.C. Mello (Brazil) and Electricite de France (EdF, France)
with National Grid (UK).
August 2004
16
PB Associates

As part of our investigation for this report, we looked at two specific software
packages in more details, to assess there suitability the CREAM (Monte Carlo
Composite Reliability Model) program and the SDDP program. A discussion of
these products is provided in Appendix C.
2.3.4
Commercial Planning Software

The preferred software packages for New Zealand must have the capability to
model mixed hydro-thermal systems. Preferably the package should use a
method similar to the Frequency-Duration method to develop both customer and
system risk indices. Commercial loadflow packages such as DigSILENT and
TPLAN (PTI Shaw) come with reliability module add-ons that generate a full
range of indices, and facilitate investment optimisation across an entire
transmission system. Care must be taken to understand what assumptions have
been made to simplify the computational algorithms, because probabilistic
transmission planning techniques are sensitive to loss of information in the
modelling stage and accuracy may be affected. For example, TPLAN uses a
simplified 10 point load duration curve instead of a more accurate 100 point curve
used for this demonstration.
August 2004
17
PB Associates
3.

INTERNATIONAL PRACTICE
So far we have described the difference between deterministic and probabilistic

planning techniques, and outlined the range of techniques and software tools
available. In this section we explore the practices employed by those bodies
responsible for setting the planning standards for National transmission grids.
Each description includes some historical context in terms of the challenges that
brought about a preference for a particular set of planning standards. This
discussion is necessary in order to appreciate that it is common industry practice
to employ a mix of deterministic and probabilistic techniques. Finally some
commentary is provided regarding the suitability of the planning standards in use
in New Zealand.
3.1
UNITED STATES
The North American power grid comprises more than 320,000 km of transmission
lines (230kV and above) and a generation capacity sufficient to deliver a
combined peak electrical demand of 950,000MW.
The power grid in North America is formed by three separate power grids; the
Eastern Interconnection, the Western Interconnection and the Ercot
Interconnection. The power grid in each Interconnection zone is comprised of a
number of connected power grids owned by individual asset owners (utility
companies).
This fragmented arrangement is inherently unreliable and a management
structure was established circa 1965 to ensure that the interconnected power
grids would operate reliably as a system.
The National Electric Reliability Council (NERC) was formed almost 40 years
ago, following a major transmission grid loss that affected 30 million people. The
NERC was charged with the responsibility to promulgate planning standards that
aim to ensure the system adequacy and security of transmission systems.
NERC Operating Policy 2A Transmission Operations (September 2001) states
the following:
All control areas shall operate so that instability, uncontrolled
separation, or cascading outages will not occur as a result of the
single most severe contingency
This statement is a definition of the N-1 criteria. It is a deterministic planning
standard that is put into practice by considering a range of normal and
contingency outages (refer to Appendix A).
Under the NERC there are ten regional reliability coordinating councils in North
America. Each council has responsibility for a number of control areas that are
primary operational entities subject to the NERC planning standards for reliability.
The control areas are either referred to as Independent System Operators (ISOs)
or Regional Transmission Operators (RTOs).
ISOs and RTOs do not necessarily own assets and that is why the NERC
planning standards tend to be deterministic. They are technical standards that
August 2004
18
PB Associates

ensure coordinated reliability outcomes, not economic standards for least cost
planning.
However, the control area operations adapt the NERC standards for use in their
areas. As a result local reliability standards are based on probabilistic as well as
deterministic planning principles because a purely deterministic approach results
in the need for additional transmission capacity. Environmental concerns
(easements, EMF) have forced transmission planners to seek alternatives to
traditional grid augmentation, and probabilistic planning supports an economic
alternative i.e. deferral of augmentation.
The power blackout in the United States and Canada on August 14, 2003
affected 50 million people and once again brought system reliability to the
attention of federal politicians and the public at large. Around 10% of the total
load of the Eastern Interconnection was lost. It is no surprise that the U.S.Canada Power System Outage Task Force did not recommend a relaxation of N1 standards (network to be reinstated within 30 minutes of an operational
contingency resulting in N<1).
The following thumbnail sketches highlight some of the prevalent practices in
probabilistic planning in North America.
3.1.1
ERCOT
The City of Austin Electric Power Department makes use of a custom-built
probabilistic load flow (PLF) approach to solving the composite generationtransmission reliability problem.
The ERCOT system is a very large
interconnected electric power system comprising 300 generators and 5000
buses. The total set of all combinations of all generators outaged is calculated
along with the probabilistic line flows (due to the outages) using a recursive
convolution technique.
A line outaging technique allows the statistically
significant transmission line outage configurations to be modelled.
The software program was developed in 1997 because at that time none of the
available programs available could forecast system reliability with statistically
valid accuracy.
The prime focus is on reliability evaluation.
3.1.2
California ISO
The California ISO coordinates the operation of five transmission grids. The
TRELSS program (developed by EPRI) is used to model the reliability of the
transmission grid. In early 2003 the California ISO was considering a proposal to
modify TRELSS to accommodate risk-based planning principles. The proposal
was based on an approach used for three years by Southern Company.
Southern Company adopted a frequency-duration approach to define risk from a
customer viewpoint. Some typical indices, derived using the frequency-duration
method, are as follows:
August 2004
19

180.0
50.0
160.0
45.0
140.0
40.0
35.0
120.0
30.0
100.0
25.0
80.0
20.0
60.0
15.0
40.0
10.0
20.0
5.0
0.0
2001
2002
Risk of
Overloads
Sharpness, %
Risk, sec/bus or sec/circ
PB Associates
Sharpness of
Overloads
0.0
2004
2003
Figure 8: Relative risk index - the risk of overloads in one zone
700
500
400
300
200
100
Figure 9: Absolute risk index - the risk of overload by circuit
August 2004
20
Circuit 20
Circuit 19
Circuit 18
Circuit 17
Circuit 16
Circuit 15
Circuit 14
Circuit 13
Circuit 12
Circuit 11
Circuit 10
Circuit 9
Circuit 8
Circuit 7
Circuit 6
Circuit 5
Circuit 4
Circuit 3
Circuit 2
Circuit 1
Risk, min/Yr
600
PB Associates

Project
Type of Problem
Risk w/o project, sec
Risk with project, sec
Risk Decrease ,sec
% of Risk Improvement
Improvement in ASIDI,
min/MVA
Improvement in ASIFI,
Outages/kVA
Improvement in EUE,
MWh/yr
Annualized Capital Cost

per sec of Risk
Improvement $
Annualised capital cost

per kWh interrupted, $
Extending the concept of risk indices to project evaluation, alternatives can be

ranked taking into account both adequacy and security concerns. This approach
is supplementary in providing additional insight compared to a statement of
economic benefits that accrue based only on expected un-served energy.
Overloads
44.4
3.7
40.7
91.7
0.15
0.27
18
0.05
1.89
Voltage
12.7
7.8
4.9
38.6
Overloads
11.1
3.7
7.4
66.7
Voltage
20
7.8
12.2
61
Overloads
3.5
3.7
-0.2
-5.7
Voltage
7.8
7.8
0.0
0.0
0.39
0.61
0.51
76
0.02
0.12
0.01
0.62
-0.11
77
-0.70
0.14
0.00
3.2
CANADA
3.2.1
Ontario Hydro
Bulk transmission security criteria are addressed using deterministic methods.
The definition in force follows:
Deterministic Security Criteria, measured in terms of system
performance, (e.g. loss of load, system instability), in response to
more
probable/first
contingencies,
less
probable/second
contingencies and extreme contingencies.
In addition, probabilistic assessment of bulk transmission grid security is
conducted, and development of the grid is shaped by the Customer Delivery
Interruption Indices for load points.
CDII Customer Delivery Interruption Index
The definition of the Customer Delivery Interruption Index that has been used to
compute the theoretical CDII of the load points in the Ontario Hydro transmission
system is as follows:
The average annual demand is defined as the total energy supplied (or expected
to be supplied) within the specified area during a period of one year (MWh)
August 2004
21
PB Associates

divided by 8760 hours, plus the additional amount of Unsupplied Energy. This
latter term is calculated as follows Unsupplied Energy =
((6 minutes x Total No. of Momentary & Sustained

Interruptions)/60 minutes)/Average MW Supplied MWh
The inclusion of a 6-minute supply interruption is intended to represent the

average time taken for the full, pre-contingency load to be restored. This
approach is a form of frequency-duration assessment.
VERA (Value-Based Evaluation and System Reliability Assessment)
Ontario Hydro uses a computer program called VERA, based on the Billinton
frequency-duration method.
The VERA Package is an integrated set of computer programs developed to
calculate customer interruption costs and delivery point reliability indices. VERA
can handle a large area supply network or a single customer delivery system. It
is a tool used by a system planner for determining system expansion need based
on customer impact and for comparing alternative demand/supply plans on a
common basis.
Program Output
VERA computes customer interruption costs and system disruption indices for a
specified area. The package has a very comprehensive and efficient contingency
identification module which can also be used as a stand alone program. This
module identifies all the unique post-fault connectivity states of the network
following all possible design criteria faults. A unique feature of this package is its
ability to model switchyard diagrams in the network context.
Component Modelling
(a)
Transmission System
Network flows are computed using a linear model. The user identifies lines and
interfaces to be monitored.
(b)
Loads
Load growth is simulated by making power transfers from specified generating

units to the load busses.
Load busses are assumed to maintain the same share of the area load as in the
base case power flow.
(c)
Switchyard
VERA can model switchyard elements and their impact on the network in the
post-contingency state.
VERA can systematically and automatically identify all relevant contingencies for
a given network topology, and forecast the change in CDII.
August 2004
22
PB Associates

When the system is too complex, Ontario Hydro reverts to in-house software
called PROCOSE (PRObabilistic COmposite System Evaluation).
The PROCOSE Program is designed to examine the impact of other generating
resources that are available on a system, in mitigating any load cuts required
when transmission elements are out-of-service, but it does not consider the
impact of transmission grid (busbar) configuration, nor does it examine every
possible contingency condition.
3.2.2
BC Hydro
BC Hydro uses MECORE software developed in conjunction with the University
of Saskatchewan. The MECORE program is a Monte Carlo based composite
generation and transmission system reliability evaluation tool designed to perform
reliability and reliability worth assessment of bulk electricity systems. It can
provide reliability indices at individual load points and for the overall composite
generation and transmission system. The MECORE software is based on a
combination of Monte Carlo (state sampling) and enumeration techniques. The
state sampling technique is used to simulate system component states and to
calculate annualized indices at the system peak load level. A hybrid method
utilizing an enumeration approach for aggregated load studies is used to
calculate annual indices using an annual load curve.
For HVDC modelling, BC Hydro uses three computing tools SPARE, NETREL
and MCGSR.
SPARE calculates, among other indices, unavailability due to aging failures for
each component, which is used as part of input data. Input data is the mean life
and the deviation of each component. The aging failures can be modeled using
a posteriori Weibull or normal distribution.
NETREL is a generic tool to calculate availability/unavailability of a network
consisting of components in parallel and/or series. The program also provides
the average capacity for a given HVDC configuration. The results from NETREL
take into account both aging related and repairable failure modes producing a
comprehensive reliability picture of HVDC Poles that are in the end-of-life stage.
MCGSR (Monte Carlo Generation System Reliability) is a generating system
reliability evaluation tool.
3.3
AUSTRALIA
The general trend in Australia, due to both economic and environmental
pressures, is to operate transmission systems closer to their limits. Liberalisation
of markets also increases uncertainty regarding the location and level of
generation, thus making the need for and cost of transmission system
reinforcement more uncertain. In the context of a market structure, system
security limits are seen as constraints preventing the system from being operated
purely according to economic rules. Despite the changes brought about by
August 2004
23
PB Associates

market liberalisation reforms, deterministic criteria remain the centrepiece of

planning methods.
3.3.1
Victoria - VENcorp
All regulated transmission investment decisions must satisfy the regulatory test
as promulgated by the ACCC. The key economic test involves deciding whether
an investment maximises the net present value of the market benefit, which is the
total net benefit to all those that produce, distribute and consume electricity in the
National Electricity Market.
This has led to a hybrid planning approach that relies on deterministic rules and
takes into account the probability of outage occurrences.
To satisfy these requirements, VENCorp accepts the possibility of load shedding
after an event but includes the EUE in the cost-benefit analysis, which is used to
determine the optimum solution and implementation timing for an augmentation.
This involves investment decisions based on a probabilistic analysis of energy at
risk, which includes consideration of the probability-weighted impacts on supply
reliability of unlikely, high cost events such as single and multiple outages of
transmission elements, generation or rotating reactive compensation plant, and
unexpectedly high levels of demand. This approach provides a sound actuarial
estimate of the expected value of energy at risk. However, implicit in its use is
acceptance of the risk that there may be circumstances when the planned
capability of the network will be insufficient to meet actual demand.
The prime focus is on reliability, balanced by the need to achieve economic
outcomes.
3.3.2
New South Wales - TransGrid

TransGrid is also subject to the ACCC regulatory test. A deterministic Code of
practice specifies requirements relating to planning standards. A set of
deterministic criteria are applied as a point of first review, from which point a
detailed assessment of each individual alternative is made. Both Monte Carlo
and enumeration methods are applied to assess system adequacy.
The prime focus is on reliability, balanced by the need to achieve economic
outcomes.
3.4
EUROPE
The general trend in Europe is similar to that in Australia. This situation has led
to renewed efforts to develop modelling tools that can be used to improve the
comprehensiveness and transparency of investment decisions.
3.4.1
United Kingdom (National Grid PLC) and France (EDF)

In response to the above issues, EDF and National Grid have developed an
analytical tool called Assess.
August 2004
24
PB Associates

Generation and load uncertainty are probabilistically modelled by Assess,

however the tool does not probabilistically model the risk of transmission
equipment failure i.e. outages are still simulated deterministically on an N-1 and
N-2 basis as appropriate.
The prime focus is on modelling uncertainty with regard to generation and load.
3.5
ASIA
3.5.1
Hong Kong - Kowloon

CLP Power uses deterministic criteria for bulk transmission security planning, and
probabilistic approaches for assessing customer delivery interruption indices.
The CDII (Customer Delivery Interruption Index) is used as a target for medium
and long term planning scenarios.
3.5.2
Singapore Energy Market Authority (EMA)

The Energy Market Authority uses a similar approach to that used by CLP Power.
3.6
NEW ZEALAND
Transpower uses DIgSILENT for network modelling. It is understood that
recently Transpower began to use the reliability modules of this application to
develop probabilistic risk indices. The power flow module uses deterministic
algorithms, while the reliability modules use several techniques including Monte
Carlo simulation. The package handles hydro-thermal system modelling.
The following indices are calculated by the "Network Reliability" analysis
assessment:
For loads:
Average Interruption Duration (AID, hr)
Load Point Interruption Time (LPIT, customers*hr/yr)
Load Point Interruption Frequency (LPIF, customers/yr)
Load Point Energy Not Supplied (LPENS, MWh/yr)
Load Point Expected Interruption Costs (LPEIC, M$/yr)
Average Customer Interruption Frequency (ACIF, 1/yr)
Average Customer Interruption Time (ACIT, hr/yr)
The ACIF and ACIT are per customer indices, while the LPIT, LPIF, LPENS and
LPEIC are summations for the number of customers at the aggregated load
model.
For busses:
Average Interruption Duration (AID, hr)
August 2004
25
PB Associates

Yearly Interruption Frequency (LPIF, 1/yr)
Yearly Interruption Time (LPIT, hr/yr)
August 2004
26
PB Associates
4.

NEW ZEALAND MODEL SPECIFICATION
This section describes the specification for the models used for the
demonstration of comparative options for probabilistic grid planning and
economic evaluation. Included here is a description of the process steps
employed to carry out the analysis, along with the rationale for choosing the
model specification i.e. what is the analysis aiming to demonstrate. The results
of the analysis are presented; Appendix B contains detailed outputs from the
simulation studies.
4.1
VALUE OF CUSTOMER RELIABILITY (VCR)

For the purpose of this study the following value of energy at risk is used to
calculate the total value of EUE.
Sector
VCR ($ per MWh)
Residential
$11,867
Commercial
$56,625
Agricultural
$54,782
Industrial
$18,531
VCR (average)
$29,600
Note that these figures are taken from VENcorps Planning Guidelines. They are
taken and used in this study as New Zealand figures without exchange rate
conversion.
4.2
DEMAND SIDE MANAGEMENT

DSM means the planning, implementation and evaluation by electric utilities of
their activities designed to influence customer use of electricity that produce the
desired changes in the timing and/or level of electricity demand. DSM includes
only activities that involved deliberate intervention by electric utilities to alter
demand and/or energy consumption.
DSM Programs are programs designed to influence utility customer uses of
energy to produce the desired changes in demand. Such programs include load
management, efficiency resource programs and conservation.
The goals of DSM are to
increase efficiency in the generation, transmission and distribution of

electricity and defer construction of power generation plants which would
otherwise contribute further to environmental degradation that will hamper
the attainment of sustainable development.
August 2004
27
PB Associates

to offer the utility a set of alternatives for optimizing resources and providing
flexible options for future business that will reduce the utilities operating
costs and increase its cost-competitiveness; and
to induce customers/consumers of electricity to adopt measures to effect

changes in energy consumption and utility load shape in the most efficient
and cost-effective manner.
In the New Zealand context, the most common example of a DSM program is
control of electric hot water heating, enabled by sending control signals over the
power lines. In the United States, it is common to use local radio stations to cycle
air-conditioning loads during the peak demand periods.
4.3
TECHNOLOGICAL ADVANCEMENT & THERMAL LIMITS

This sub-section describes the possibility that exists to increase the utilisation of
the transmission network in the short term if advanced control and monitoring
capability is available to system operators.
The transmission network must be planned to operate within the thermal
capability of transmission lines and transformers. The current carrying capacity
of transmission plant is defined in terms of a maximum temperature that the
equipment is able to sustain without plant damage, or in the case of transmission
lines, the necessary critical clearances to the ground being maintained.
It is possible to temporarily operate a transmission line or transformer beyond the
current level that would, if applied continuously, result in temperatures higher
than equipment rating. Providing the equipment is operating below the
temperature rating prior to an outage occurring, a sudden increase in current flow
can be sustained for a short period of time before the temperature of the
equipment rises to the rated temperature. Time constants for transmission lines
are generally less than 15 minutes due to the low mass of metal involved. On the
other hand transformers have a large iron mass and a large oil volume and take
quite a long time to heat up. Time constants of the order of 30 to 45 minutes are
typical.
A high number of utilities, including Transpower and VENCorp, takes the shortterm overload ratings into account when calculating off-load times. The off-load
time is a function of pre-contingency load.
For transmission planning allowance is made for the short-term operation of
transmission plant beyond continuous current ratings, allowing flows greater than
the normal firm capability limit. The maximum acceptable normal flow (with all
plant in service) is limited to a level such that plant items will not exceed their
rated temperature within 10 minutes (VENCorp level) after an item of plant fails.
A 10 minute rating is normally used to provide time for manual operating action to
be taken to reduce the flow so that the temperature of the element is not driven
beyond its rating.
The actions could involve transformer tap changing,
reconfiguration of the network through switching or, in some cases, generator
rescheduling and/or selective load curtailment. Where special automatic controls
are implemented, the time allowed for post event load reduction may be shorter
than 10 minutes. An automatic control scheme can permit the secure utilization
of short term ratings of transmission plant.
August 2004
28
PB Associates
4.4

SPECIFICATION 1 VENCORP MODEL (MARKOV STATES MODEL)

This sub-section describes the specification for a model that uses a mixture of
deterministic and probabilistic (enumerative) methods for reliability analysis of the
transmission network. The process is aligned with the VENcorp Planning
Guidelines and is reproduced here for easy reference:
Read hourly demand, generation and interconnection transfer data,

transmission network data and ambient temperature data
Calculate transmission plant power flows, ratings and over loads
Overload > 0
No
Yes
Re-dispatch Generation/Re-distribution of ancillary services (if feasible)
Re-calculate transmission plant power flows, ratings and over loads
Calculate additional cost for generation re-dispatch, re-distribution of

ancillary services for this hour
Overload > 0
No
Yes
Calculate value of un-served energy per year
for this hour
Is This
Last Hour
Reading?
No
Yes
Calculate total value of additional cost for generation re-dispatch, redistribution of ancillary services and value of un-served energy per year
Multiply by the probability of outage and calculate the total expected cost
per year
August 2004
29
PB Associates

Two cases are presented here. The first case shows a simple calculation of the
EUE and VCR for the composite system being modelled. The second case
builds on the case 1 approach to introduce a full economic evaluation of
investment alternatives.
The following schematic diagram illustrates the section of the New Zealand grid
that has been chosen for demonstration of the VENcorp model approach to
probabilistic planning.
For this model we have chosen a double circuit 220kV network that is routed
between Islington and Kikiwa.
210 270 MW Regional Load
Generation
Argyle
0 10MW
at
Generation at Cobb 0 - 30MW
KIKIWA BUS 220kV
Circuit A
Circuit B
ISLINGTON BUS 220kV
Generation
from South
Figure 10: South Island System
The entire Nelson-Marlborough region and part of the West Coast region is
mainly supplied by these two 220kV lines.
The following table summarises the transmission capacity limits of these 220kV
lines, under a 10 percent voltage regulation constraint for the above circuits when
regional demand power factor is 0.95.
Available Transfer Capacity (ATC)

From Islington to Kikiwa
Power Factor - 0.95
Double Circuit in Service
195MW
Single Circuit Outage
100MW
August 2004
30
PB Associates

The region has two generating plants. The larger one is Cobb hydro station that
has installed capacity of 32 MW with annual average yield of 195 GWh. The
smaller one is Argyle power station with installed capacity of 10 MW.
In addition to the 220kV network supplying these load points there is also an
independent 66kV connection that can supply part of the regional demand. This
supply amounts to 20MW capacity. It is included in the above scenarios.
The total regional peak demand in the year 2002 was approximately 180 MW and
is forecast to increase to 210 MW by the year 2006 according to available
demand projections.
According to Grid Operator publications, the combined power factor of the
regional demand is varies from 0.98 to 0.95 for up to 80% of the time.
In summary the following assumptions are made for the purposes of modelling:
CASE 1
1. Peak 66kV supply 20 MW to the region during high demand periods

2. Individual circuit failure probability is 0.0082 (about 3 days a year)
3. Combined regional demand power factor being 0.98 for 50% of the
time and 0.95 for the remaining period
4. Generation within the region is available for 40% of the time with full
capacity, 20% of the time only Cobb generating at full capacity of
30MW, further 20% of the time Argyle generating at 10MW and no
regional generation available for the remaining period
Four generation scenarios are considered as follows:
1. Full generation of 40MW within the region with probability of being

available of 0.4
2. Cobb station only, generating 30MW (1st order contingency) with
probability of being available of 0.2
3. Argyle station only, generating 10MW (1st order contingency) with
probability of being available of 0.2
4. No regional generation (2nd order contingency) with probability of
being available of 0.2
August 2004
31
PB Associates

CASE 2
Some minor changes have been made to Case 1 to better reflect actual fault
statistics for the transmission lines (refer to Frequency-Duration analysis in
Section 4.4). This case incorporates the evaluation of various investment
options.
COMMON ASSUMPTIONS MADE
The following assumptions were made for the purposes of modelling:
Regional Demand
1. The demand power factor is 0.95 lagging. This is a crucial
assumption because it can introduce errors into the final cost of
energy not served. According to Transpower, the regional
power factor varies from 1.00 to 0.92 during the year but most of
the time (about 75%) it will be between 0.98 and 0.95. At 0.95
power factor transmission line voltage stability rating is
somewhat 3% less than at 0.98
2. The yearly demand duration curve as given in the spreadsheet
3. The yearly demand growth rate for the region is 2.5%
4. Seasonal demand variations are built into the demand duration
curve
5. 20MW of regional demand is met by 66kV connection at peak
demand times
Regional Generation
1. The installed capacity of Cobb generating plant is 30MW and
70% of the time full capacity available and remaining 30% of the
time available capacity is 0MW
2. The installed capacity of Argyle generating plant is 10MW and
availability/unavailability is as same as above
3. Therefore both plants are available for 49% of the time with full
capacities
4. Both plants are not available for 9% of the time
5. Each plant is available without the other plant for 21% of the
time
August 2004
32
PB Associates

Transmission Lines
1. Two, single circuit lines with Zebra conductor operating at
maximum voltage of 231kV at sending end (Islington) and
minimum voltage of 209kV at receiving end (Kikiwa)
2. Both circuits are identical in availability and having 0.1%
probability of failure
3. Therefore, both circuits are available for 99.8% of the time
4. Both circuits are not available for 0.0001% of the time
5. Probability of one circuit being out is 0.001998
Investment Scenarios
1. Do nothing
2. 20MW PFC Capacitors with 100% availability at peak load times
capital cost $600,000k
3. 50MW Diesel Plant with 100% availability at peak load times
capital cost $70M
4. 220kV 3rd line with the same availability as existing circuits
capital cost $15M
For simplicity sake, annual O&M and running costs are present
valued
For simplicity sake, the investment option is considered to be
available in the year that the investment is approved
A 10% discount rate is used for evaluation purposes over a 20 yr
horizon
August 2004
33
PB Associates
4.5

SPECIFICATION 2 FREQUENCY- DURATION MODEL

This sub-section describes the specification for a model that uses enumerative
(analytical) methods for reliability analysis of the transmission network, delivering
reliability indices and EUE figures.
The model to be used builds on the basic enumeration method used for the
VENcorp Case 2 model as described in section 4.3.
In this case risk indices are defined, bearing in mind that the VENcorp approach
says nothing about the frequency and duration of violations experienced by
customers. The VENcorp model incorporates a transmission or system operator
viewpoint of risk in the probabilistic modelling. The frequency-duration method
can be used to explicitly define a customer viewpoint of the risk of loss of supply.
In simple terms, the customer risk is expressed as the duration multiplied by the
number of violations (voltage or overload) divided by the ratio of buses to circuit
branches. In a large system, the relative risk is of interest as an absolute risk as
it is usually accepted that it is difficult to establish a benchmark for admissible
risk.
The advantage of the frequency duration method is that the frequencies and
durations of violations for system components are readily available from historical
performance data. This data can be used to compute the relative probability of
availability and unavailability of components.
Once the relative and
combinational probabilities are computed for each and every component in the
system then these probabilities can be used to compute system reliability indices
using either Markov chain method or Monte Carlo simulation method.
The system given in above figure is similar to the system used for VENCorp
model. First, we will consider two single circuit parallel lines from Islington to
Kikiwa for the reliability assessment of the system using frequency of failures and
failure durations.
The following assumptions were made for the F&D analysis.
1. The 66kV connection could supply around 20 MW to the region at
high demand periods.
2. Individual and independent circuit failure probability is 0.001 (8.76
hours per year).
3. Combined regional demand power factor being 0.95 for the high
demand period.
4. Availability rate of the Cobb and Argyle generating plants are to be
70% and independent to each other.
Four generation scenarios that have been considered are given below.
August 2004
34
PB Associates

1. Full generation of 40MW within the region with probability of 0.49.

2. Only Cobb station is generating 30 MW with probability of 0.21.
3. Only Argyle station is generating 10MW with probability of 0.21.
4. No regional generation with probability of 0.09.
4.6
SPECIFICATION 3 MONTE CARLO MODEL

This sub-section describes the specification for a model that uses Monte Carlo
methods for reliability analysis of the transmission network, delivering reliability
indices and Expected Un-served Energy figures.
The model to be used is the same as that used for the VENcorp Case 2 model as
described in section 4.4.
The sample grid section has three main variables similar to any other
transmission grid. These can be described as supply, demand and despatch.
The model presented in the report takes the regional generation as part of the
supply and available transmission capacities as the remaining supply source
assuming Islington bus has an uninterrupted supply from South. The regional
demand variation is taken as 100 point demand duration curve that is similar to
previous models. Hydro generation from the power stations Cobb and Argyle is
also taken as 100 point variable with a probabilistic content similar to other
models. The transmission line supply curve should ideally be modelled using a
probability distribution curve comprised of one million points. This is necessary to
give accurate results due to the low probabilities of failure of the transmission
line. However, the distribution was reduced to a 1000 point distribution in order
to achieve computational efficiency, and accuracy charts are provided to
demonstrate that the resulting accuracy is acceptable. However, the above
reduction does have a more significant affect when N-2 and N-3 planning criteria
are used to register energy not served as zero under these conditions.
The model generates three random MW levels for available hydro generation,
transmission capacity and regional demand. The simulation checks for demand
violations and computes energy not served if violations occur in each trial with
following formula.
ENS = (DEMAND SUPPLY) * 8760 / NUM
Where,
ENS Energy not supplied in MWh.
DEMAND Regional demand in MW (randomly selected).
SUPPPLY Summation of all possible supplies to the region in
MW.
August 2004
35
PB Associates

8760 Number of hours per year.

NUM Number of trials (an option to the user).
A violation is counted when demand goes above the supply and
energy not served is accumulated for the entire simulation.
The above model has three random variables with 10 million combinations and
requires a large number of trials, including several kinds of possible combinations
to give an accurate estimate of energy not served for each year. This model can
produce results that are on a par with other methods providing that the number of
trials is sufficiently large.
4.7
SPECIFICATION 4 LOAD MANAGEMENT ALL METHODS

This sub-section describes the specification for a model that incorporates load
management or load reduction tools, as a demand-side alternative.
Once again the model uses the VENCorp Case 2 model, and in this case the
modelling uses all three methods to compute Expected Un-Served Energy.
An investment plan is developed based on a more realistic assessment of the
time required to implement both supply and demand side options.
The following assumptions were made with respect to the lead times assumed for
each option under consideration:
1. 20MVAr capacitors 1 year to implement, as we believe this is
already on the grid development plan.
2. Demand side management program 2 years to initiate and
another 2 years to be effective.
3. Third circuit total of 4 years to construct.
An economic evaluation is prepared for this model.
August 2004
36
PB Associates
5.

RESULTS OF ECONOMIC PLANNING EVALUATIONS
This section contains the results of the analysis for each of the models described
in the previous section.
VENCORP MODEL (MARKOV STATES MODEL)
This sub-section describes the results of the VENcorp modelling scenario. The
first case shows a simplified calculation of the EUE and VCR. The second case
extends the technique to include consideration of investment alternatives.
Case 1 Simple Example
The power flow study shows that the outage of one of these circuits could cause
supply limitation to the region during high demand periods. Accordingly, the
amount of power that can be transmitted to Kikiwa is limited by the voltage
stability limit of the circuit.
The following diagrams show the estimated load duration curves for the region
that is supplied from Kikiwa 220kV substation. The demand duration curves and
single circuit outage limits are used to estimate energy that cannot be supplied
under the selected generation scenarios.
250
200
Demand/Supply (MW)
5.1
150
100
LDC-2002
LDC-2006
Limit-1
Limit-2
Limit-3
Limit-4
50
0
1
13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97
% of Time
Figure 11: Load Duration Curves and Supply Limits with Single Circuit Outage
The following table summarises the estimates of Expected Un-served Energy

(EUE) under each of the four generation scenarios:
August 2004
37
PB Associates

Energy Not Served (GWh)

Limit-1
Limit-2
Limit-3
Limit-4
2002 2006
2002
2006
2002
2006
2002
2006
6.382 23.333 16.762 57.968 70.539 135.952 115.939 190.307
Probabilistic Analysis:
Circuit outage probability = 0.0082 (taken as same for both circuits)
Probability of both circuits being out = 0.0000672
For the generation scenario probabilities for regional demand when PF is 0.95,
the EUE is as follows:
For year 2002, EUE = 354MWh
For year 2006, EUE = 706.6MWh
We combine the EUE figures for PF at 0.98 or 0.95 with 0.5 probability each to
give a final estimate for EUE:
For year 2002, EUE under single circuit outage = 221.9MWh
For year 2006, EUE under single circuit outage = 502.1MWh
Cost of energy not served under n-1 reliability criteria using $29,600/MWh Value
of Customer Reliability (VCR) for each year is given below:
For year 2002 = $6,568,240
For year 2006 = $14,862,160
Case 2 Full Evaluation

For case 2, the load duration curves are projected out for the 20 year period from
2002 to 2022.
August 2004
38
PB Associates

300
2002
2003
2004
2005
250
2006
2007
2008
Demand (MW)
200
2009
2010
2011
2012
150
2013
2014
2015
100
2016
2017
2018
50
2019
2020
2021
2022
0
1
13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97
% of the Time
Figure 12: Regional Demand Duration Curves 2002 to 2022
Probabilistic Analysis
The following tables contain the estimates of EUE against the N-1 transmission
reliability standard. The forecast are prepared for each of the generation
scenarios, and for the four investment alternatives. For the purposes of the
demonstration, a simplification is made by assuming that each of the investment
alternatives is available in year 2002.
1. Do Nothing
August 2004
39
PB Associates

2. Investment Alternatives
a. 20MVar PFC Capacitor
August 2004
40
PB Associates

b. 50MW Diesel Power Station
rd
c. 220kV 3 Circuit
August 2004
41
PB Associates

Table 5: VCR Cost of Expected Un-Served Energy (000s)
Table 5 reveals that the Expected Un-Served Energy forecast reduces according
to the effectiveness of the investment alternative in providing increased capacity
and therefore redundancy or reliability. For any year, the VCR cost is a measure
of the justifiable maximum investment above which the grid benefit test outcome
would no longer be positive.
Kikiwa 220kV Grid Exit Point Reliability Risk
The above tables do not reveal the risk that demand is not met.
When the above demands are represented as a normal distribution curve,
demands that are within low risk area are imposed on the system with a
probability of 16% or less.
In case of a load shedding event, demand that is not met is limited from 0MW to
30MW. This only occurs when one circuit is down, and the probability of that
event is 0.001998. Therefore the combinational probability of the load shedding
is 0.0003197. The energy in the load shedding area is less than 3% of the total
energy demand of the region.
Therefore, probabilistically speaking, energy that is not served is less than
0.095% (3% x 0.032%) or nearly a one hundred thousandth of the total energy
demand of the region. When capacity shortage is small (say 10%) it can be met
without supply interruptions, by temporarily over-loading transmission load-
August 2004
42
PB Associates

carrying equipment.
boosting voltage.
Downstream transformers will respond automatically by
Using a statistical approach (normal distribution), a demand level can be

established at the 84% confidence level as illustrated in the following chart
produced for year 2002:
200
LOW RISK AREA
180
2002 DDC
1st SDV
Mean
MEDIUM RISK
160
DEMAND (MW)
140
120
100
80
HIGH RISK AREA
60
40
20
0
1
13
17
21
25
29
33
37
41
45
49
53
57
61
65
69
73
77
81
85
89
93
97
% OF TIME
Figure 13 Risk Levels for Demand That Cannot Be Met
For example:
For the year 2002
Yearly average load factor according to the load duration curve =
70%
Mean demand for the year = 126.11 MW
Standard deviation of the demand distribution = 23.69 MW
84% confidence level of meeting all demands below 149.8 MW
For the year 2022

Yearly average load factor according to the load duration curve =
70%
Mean demand for the year = 206.64 MW
Standard deviation of the demand distribution = 38.8 MW
August 2004
43
PB Associates

84% confidence level of meeting all demands below 245.44 MW
All demands that are below the mean demand level are considered as very
important and carry high risk if unable to serve.
All demands that are above 84% confidence level are considered of minor
importance and carry low risk if unable to serve.
Demands that are between these limits carry medium risk if unable to serve.
Using this method of exposition, a risk-informed table can be produced for years
2002 to 2022:
Table 6: VCR Cost of Expected Un-served Energy ADJUSTED by Risk
The available VCR benefit is reduced substantially when a risk-informed

approach is adopted. Tables 5 and 6 provide the comparative VCR figures.
Figure 14 shows how the benefits of each investment alternative is used up over
time as load growth increases the value of EUE and the overall performance of
the system degrades to its starting condition. The x-axis scale is adjusted
according to the do-nothing base-line VCR. ($0 is actually a base-line of $1.8M).
August 2004
44
PB Associates

$5,000.00
220kV 3rd line

$0.00
0
10
-$5,000.00
-$10,000.00
15
20
25
50MW Diesel
EUE returns to 2002 level
-$15,000.00
PFC Capacitors
-$20,000.00
-$25,000.00
Figure 14: Total VCR Saving Relative to Existing VCR per Annum
Alternative Investment Options:

The NPV spreadsheet calculations that follow are based on the simplification that
the alternative delivers benefits in the first year.
Do Nothing
The do-nothing economic evaluation is actually a present value calculation of
the value of customer reliability accrued over a 20 year period.
The NPV of $69M is the benefit that could be justified with appropriate
transmission grid augmentation.
August 2004
45
PB Associates

Table 7: Do Nothing NPV VCR Available for Justification of Investment
20MVAr Capacitor
Table 8: 20MVAr Capacitor Bank
August 2004
46
PB Associates

50MW Diesel Power Station6
Table 9: 50MW Diesel Power Station
3rd 220kV Circuit
The Diesel Power Station alternative is treated as a one-off investment and the full value of the investment is
counted towards the reduction of Expected Un-Served Energy; in practice cost recovery for such an alternative
could be facilitated by treating the facility as an ancillary service.
August 2004
47
PB Associates

rd
Table 10: 3 220kV Circuit
The economic evaluations demonstrate the difference in grid benefits. Using this
simplified economic evaluation, the order of investment preference is the 20MVAr
capacitor, 3rd circuit and 50MW diesel option:
Alternative
Present Value Ratio (PVR); Net

Present Value (NPV)
20MVar Capacitor
56.8; $33.5M
50MW Diesel
0.84; ($10.8M)
3rd Circuit
4.6; $53.6M
A composite investment scenario is explored in a later section of this report.

5.2
FREQUENCY- DURATION MODEL

Firstly we consider two single circuit parallel lines from Islington to Kikiwa for the
reliability assessment of the system using frequency of failures and failure
durations.
We assume that both circuits A and B are identical in all features for the simplicity
of illustration. We will also assume that both circuits were commissioned 20 years
ago and have failed 9 times independently during that period.
Therefore, the frequency of failures for one circuit is (F, per year) = 9/20 = 0.45 /
year.
A components service and outage cycles during its complete service time is
graphically represented as follows:
August 2004
48
PB Associates

m1
r1
m2
r2
m3
r3
Second service/failure cycle
Where, mi is the in service duration in years and ri is the outage duration in years
of the component in ith cycle.
If the total number of service/failure cycles for entire service duration is n, then
the total number of years the component was in service is (M, years) = mi
years, (i =1 to n)
Similarly, the total number of years that the component was out of service is (R,
years) = ri years (i =1 to n)
The mean time in service (m) = M/n (years) and Mean outage time (r) = R/n
(years).
Then, the probability that the component is in service is = M/(M + R) or m/(m + r),
and similarly the probability of component being out of service is = R/(M + R) or
r/(m + r).
Now, if we assume total in service time of the circuit A as = 19.98 years, and the
total outage time of the same circuit as = 0.02 years, then the probability of circuit
A in service is P(s) = 19.98/(19,98+0.02) = 0.999.
And, the probability of circuit A out of service is P(o) = 0.02/(19.98+0.02) = 0.001.
Also, the constant service rate of the component () = F/P(s) = 0.45/0.999 =
0.45045.
And the constant repair rate of the component () = F/P(o) = 0.45/0.001 = 450.
A spreadsheet model was developed for the sample system given above
according to the chapter 6, Reliability Evaluation of Power Systems by Roy
Billinton and Ronald N. Allan using following equations to estimate Annualized
Load Point Indices (ALPI).
Expected number of load curtailments/Violations = Fj
Absolute risk of violations = Durations (hours) * number of violations/8760
Expected energy not supplied = Lj* Dj* Fj
Expected duration of Load curtailment = Dj*Fj
Maximum duration of load curtailment = max { D1 , D2 , D3 .}
Where,
Fj Frequency of occurrence of outage j
Lj Load curtailment at the bus arising due to the outage j
August 2004
49
PB Associates

Dj Duration of the load curtailment arising due to the outage j

The model assumptions for the F&D method are shown in the following table:
Figure 15 shows the difference between forecasts of EUE for a Do Nothing

scenario for both Markov probability method and frequency/duration method:
1200
EXPECTED UN-SERVED ENERGY (MWh)
Markov
1000
F&D
800
600
400
200
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 15: Comparison of EUE Forecasts for Do Nothing
The chart shows that the estimates of energy are in close accordance using
either method.
August 2004
50
PB Associates

The degree of accordance is less for the 3rd circuit model as shown in Figure 16.
EXPECTED UN-SERVED ENERGY (MWh)
140
120
Markov
F&D
100
80
60
40
20
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
rd
Figure 16: Comparison of EUE Forecasts for 3 Circuit Model
The F&D model is sensitive to the choice of frequency of outages. The following
table shows significant difference in the forecasts of EUE as the frequency is
varied in the F&D model, holding probability of failure constant:
August 2004
51
PB Associates

Kikiwa 220kV Grid Exit Point Reliability Risk

The F&D method lends itself to the computation of reliability risk indices.
Do Nothing
The variation of load point reliability indices - Loss of Load Expected (LOLE) and
Loss of Energy Expected (LOEE) - are shown in the following tables:
The following table shows that the reliability risk indices are also sensitive to
frequency assumptions:
The expected duration and absolute risk of violations is not affected by

frequency, so long as the probability is held constant. By contrast the expected
maximum load curtailment duration and expected number of violations varies with
frequency. There is also a slight variation in the average load curtailed.
The following series of charts show the variation in a selection of risk indices over
a 20 year period for do nothing, capacitor and 3rd circuit investment scenarios,
based on a simplified assumption that these facilities would be available in 2002.
August 2004
52
PB Associates

0.2
0.18
DO NOTHING
CAPACITOR
3rd CIRCUIT
0.16
RISK INDEX
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2020
2022
YEAR
Figure 17: Comparison of Absolute Risk Indices

18
16
DO NOTHING
CAPACITOR
3rd CIRCUIT
14
DURATION (hours)
12
10
8
6
4
2
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
YEAR
Figure 18: Duration of Load Curtailment
August 2004
53
PB Associates

70
60
DO NOTHING
CAPACITOR
3rd CIRCUIT
LOAD CURTAILED (MW)
50
40
30
20
10
0
2002
2004
2006
2008
2010
2012
YEAR
2014
2016
2018
2020
2022
Figure 19: Comparison of Average Load Curtailed
1
0.9
DO NOTHING
CAPACITOR
3rd CIRCUIT
NUMBER OF VIOLATIONS/YEAR
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 20: Comparison of number of Violations
August 2004
54
PB Associates

20 Year Results
The full spread of results is also provided as a table for each investment
alternative, contrasting the F&D and Markov results:
August 2004
55
PB Associates

Comparison of Methods
The model that uses Markov states with only probability indices can be called a
stationary solution of a dynamic system while the F&D model represents possible
expansions into Markov states. Therefore the F&D method can be used to see
variations and sensitivities of the system reliability indices under changing
conditions.
Disadvantage of F&D Method
The method assumes past failure frequencies and durations are realistically true
for the complete planning period. This may not be the case for some systems if
planning horizons are too long. By the same token, Markov states with relative
probability indices may give a more accurate picture where frequencies and
durations are not known or become unpredictable due to proposed system
changes.
Results of Analysis
The results and outcomes of the above analyses are based on a number of
assumptions chosen to illustrate the difference between the two approaches.
Therefore results may not represent realistic figures for the actual system.
August 2004
56
PB Associates
5.3

MONTE CARLO MODEL

This sub-section describes the results from the Monte-Carlo method used to
model the composite generation/transmission network.
Simulations were run using 50,000 trials and 3 million trials. The simulation
determined the EUE of the system for the N-1 and N-2 reliability standard.
The following table compares the results derived from the three methods.
As can be seen, with only 50,000 trials the results of the Monte Carlo simulation
varies from the results delivered by the other two methods.
The following chart demonstrates how the agreement between methods improves
as the number of Monte Carlo trials is increased:
August 2004
57
PB Associates

1600
5000
10000
50000
100000
ACTUAL
1400
ENERGY NOT SERVED (MWh)
1200
1000
800
600
400
200
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 21: Monte Carlo Trials & Accuracy
5.4
LOAD MANAGEMENT MODEL

A grid benefits test is demonstrated using a hypothetical 20 year investment plan
comprising a mix of supply and demand side options.
The supply side options considered were:
1. A third 220kV circuit (capital cost $15M, lead time 4 years);
2. A 20MVar capacitor bank (capital cost $600k, lead time 1 year); and
3. A 50MW diesel station supply at 110kV (capital cost $70M)7.
The diesel option was finally discarded for the test, as a less attractive alternative
than the 3rd circuit, from a demand-energy perspective.
A demand side management (DSM) option was also considered.
DSM Programs are designed to influence customer uses of energy to produce
the desired changes in demand. Such programs include time-of-use load
shifting, efficiency resource programs and conservation. Many utilities use
remote control to switch off load that can be deferred without significant loss of
consumer amenity. Signals can be sent across power-lines or by radio to
temporarily turn off electric hot water heaters or air-conditioners.
The diesel power station alternative offers benefits other than the improvement of transmission grid
security. Accordingly, for purposes of economic evaluation the investment should only be a part cost. The
diesel power station could be treated as an ancillary service (supporting grid reliability) annual service
payment.
August 2004
58
PB Associates

For this study the model assumed that a hot water load reduction opportunity is
available between 11pm and 6am, offering a 10% - 15% peak reduction in two
tranches (cost $2M for first 10%, $2M for next 5%, lead time 2 years in both
cases).
The composite plan calls for a 20MVAr capacitor bank installed in Year 0; 10%
DSM undertaken in Year 2; 15% DSM undertaken in Year 4; and a third 220kV
circuit installed in Year 8.
The variation in Expected Un-Served Energy with time, for the hypothetical
investment plan is show graphically in Figure 22.
Economic evaluations were also prepared for the investment plan. Such
evaluations are usually base-lined against a do-nothing option. However, in this
case the benefits are specified by the reduction in VCR delivered by each
augmentation option, and the grid benefits test compares the total investment
against the total VCR over time. In other words, in this case the do-nothing
benefit relates to the VCR available for investment at a given point in time.
Table 7 shows the NPV calculation for the investment plan. For comparison
purposes, Table 8 shows the NPV calculation for a 3rd transmission circuit should
design and construction (project start in 2002).
The difference in NPV shows that the composite investment plan delivers a
saving compared to the 3rd circuit option8.
The analysis is simplified and while the principle of investment deferral delivers guaranteed savings, the
quantum of savings may differ from those shown.
August 2004
59
PB Associates

Table 7: Investment Plan
Table 8: Comparison with N-1 Third Circuit Investment Plan
EXPECTED UN-SERVED NERGY (MEGAWATT-HOURS)
120
20MW CAPACITOR
100
80
3RD CIRCUIT
10% DSM
15% DSM
60
40
20
0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
YEAR
Figure 22: Expected Un-Served Energy (EUE) For Investment Plan
August 2004
60
PB Associates

A comparison of the investment plan based on a deferral of the third circuit investment
shows that there are significant financial benefits to be gained by employing alternative
augmentation methods. The deferral investment plan yields a PVR of 60.51
compared to a PVR of 58.1. The NPV for the deferral is $212k higher than for a third
circuit alternative established at the latest possible timing (using N as criteria) in 2010.
August 2004
61
APPENDIX A
EXTRACT: NERC Planning Standards - (N-1) Contingency Table
T a b l e I . T r a n s mi s s i o n S y s t e ms S ta n d a r d s N o r ma l a n d C o n ti n g e n c y C o n d i ti o n s
Voltage
Limits
Yes
System
Stable
No b
No b
No b
No b
No
Loss of Demand or
Curtailed Firm Transfers
No
No
No
No
No
No
Cascading c
Outages
System Limits or Impacts
Applicable
Rating a (A/R)
Yes
Yes
Yes
Yes
Nob
No
No
Contingencies
A/R
A/R
A/R
A/R
Yes
Planned/Controlledd
Planned/Controlledd
Category
None
A/R
A/R
A/R
A/R
A/R
Yes
Yes
No
Thermal
Limits
All Facilities in Service
Single
Single
Single
Single
A/R
A/R
A/R
Planned/Controlledd
Elements
Out of Service
Single Line Ground (SLG) or 3-Phase (30) Fault, with Normal Clearing:
1. Generator
2. Transmission Circuit
3. Transformer
Loss of an Element without a Fault.
Single
A/R
A/R
Yes
Initiating Event(s) and Contingency Element(s)

A - No
Contingencies
Single Pole Block, Normal Clearingf:

4. Single Pole (dc) Line
Multiple
Multiple
A/R
A/R
Yes
Yes
Yes
Applicable
Rating a (A/R)
B - Event resulting in
the loss of a single
element.
SLG Fault, with Normal Clearingf:

1. Bus Section
2. Breaker (failure or internal fault)
A/R
C - Event(s) resulting
in the loss of two or
more (multiple)
elements.
Multiple
No
SLG or 30 Fault, with Normal Clearingf, Manual System Adjustments,

followed by another SLG or 30 Fault, with Normal Clearingf:
3. Category B (B1, B2, B3, or B4) contingency, manual system
adjustments, followed by another Category B (B1, B2, B3, or B4)
contingency
Planned/Controlledd
A/R
A/R
A/R
Planned/Controlledd
Planned/Controlledd
No
No
No
Yes
Fault (non 30),
with Normal
A/R
A/R
A/R
Multiple
Multiple
A/R
Bipolar Block, with Normal Clearingf:4. Bipolar (dc) Line

5. Any two circuits of a multiple circuit towerlineg
SLG Fault, with Delayed Clearingf (stuck breaker or protection system
failure):
6. Generator
8. Transformer
7. Transmission Circuit
9. Bus Section
Categories A and B - Approved by Planning Committee February 27, 2001, and NERC Board of Trustees June 12, 2001. Category C Approved by Planning Committee November 15, 2001, the Market Interface Committee January 10, 2002, and NERC Board of
Trustees February 20, 2002.
Category D - Approved by Planning Committee September 27, 2001, and NERC Board of Trustees October 16. 2001.
APPENDIX B
Samples of Model Assumptions
GENERATION PARTICULARS
Service/Outage Cycle Frequency
10
Probability of Hydro Station Availability
0.7
Probability of Hydro Station Un-availability
0.3
Available Rate (Lambda) per Year 14.28571429
Failure Rate (Meu) per Year 33.33333333
GENERATION MODEL
CAP PROBABILITY DEP RATE occ/y FREQ occ/Y
40
0.49
28.57142857
14
30
0.21
47.61904762
10
10
0.21
47.61904762
10
0
0.09
66.66666667
6
Model Assumptions for Do-nothing 2002:
STATE G.OUT
1
0
2
1
3
2
4
1&2
STATE L.OUT
1
0
2
1
3
2
TRANSMISSION PARTICULARS
CYCLE FREQUENCY
0.45
SINGLE CIRCUIT AVALABILITY
0.999
SINGLE CIRCUIT UN-AVAILABILITY
0.001
SERVICE RATE 0.45045045
FAILURE RATE
450
TRANSMISSION MODEL
CAP PROBABILITY
DEP RATE
FREQUENCY
195
0.998001
0.900900901
0.8991
100
0.001998
450.4504505
0.9
0
0.000001
900
0.0009
SYSTEM
STATE
FAILURE
EXPECTED DEMAND LOSS
State
Condition Probability
Frequency
Pdl
Probability Frequency Duration (P) Duration (F) ALOLE (MW) LOEE (MWh) LOEE (MWh)
1
0G-0L
0.48902049 14.412573
0
0
0
0
PROBABILITY
F&D
2
0G-1L
0.00097902
0.468972
0.05 4.895E-05 0.0234486 0.42881076
17.5
10
4.2881076
4.103505
3
0G-2L
0.00000049
0.000455
1
4.9E-07
0.000455 0.0042924
0
4
1G-0L
0.20958021 10.168821
0
0
0
0
0
5
1G-1L
0.00041958
0.20898
0.18 7.552E-05 0.0376164 0.66159374
17.5
9.36
6.192517444
6.16156632
6
1G-2L
0.00000021
0.000199
1
2.1E-07
0.000199 0.0018396
0
7
2G-0L
0.20958021 10.168821
0
0
0
0
0
8
2G-1L
0.00041958
0.20898
0.45 0.0001888
0.094041 1.65398436
17.5
17.89
29.5897802 29.44188608
9
2G-2L
0.00000021
0.000199
1
2.1E-07
0.000199 0.0018396
0
10
1&2G-0L 0.08982009
6.068925
0
0
0
0
0
11
1&2G-1L 0.00017982
0.092988
0.58 0.0001043
0.053933 0.91362946
17.5
22.819
20.84811056
21.5372157
12
1&2G-2L 0.00000009
0.000087
1
9E-08
0.000087 0.0007884
0.0004186
0.209979 3.66677832
FOR ALL SYSTEM CONTINGENCIES
0.0004176
0.209039 3.65801832
16.6534201 60.9185158 61.24417309
FOR TRANSMISSION CONTINGENCY (N-I)
FOR THE YEAR 2002 COST OF ENERGY NOT SERVED AT $29600 PER MWh
$1,803.19
1812.827523
GENERATION PARTICULARS
Service/Outage Cycle Frequency per Year
10
Probability of Hydro Station Availability
0.7
Probability of Hydro Station Un-availability
0.3
Available Rate (Lambda) per Year 14.28571429
Failure Rate (Meu) per Year 33.33333333
GENERATION MODEL
CAP PROBABILITY DEP RATE occ/y FREQ occ/Y
40
0.49
28.57142857
14
30
0.21
47.61904762
10
10
0.21
47.61904762
10
0
0.09
66.66666667
6
Model Assumptions for 3rd Circuit:
STATE G.OUT
1
0
2
1
3
2
4
1&2
STATE L.OUT
1
0
2
1
3
2
4
3
TRANSMISSION PARTICULARS
CYCLE FREQUENCY
0.45
SINGLE CIRCUIT AVALABILITY
0.999
SINGLE CIRCUIT UN-AVAILABILITY
0.001
SERVICE RATE 0.45045045
FAILURE RATE
450
TRANSMISSION MODEL
DEP RATE
FREQUENCY
CAP PROBABILITY
290
0.997002999
1.351351351
1.34730135
195
0.002994003
450.9009009
1.34999865
100
0.000002997
900.4504505
0.00269865
0
0.000000001
1350
0.00000135
SYSTEM
STATE
FAILURE
EXPECTED DEMAND LOSS
State Condition Probability Frequency
Pdl
Probability Frequency Duration (P) Duration (F) ALOLE (MW) LOEE (MWh) LOEE (MWh)
1
0G-0L 0.4885315 14.6182196
0
0
0
0
PROBABILITY
F&D
2
0G-1L 0.0014671 0.70341538
0
0
0
0
26.2275
0
0
0
3
0G-2L
1.469E-06 0.0013643 0.05 7.343E-08 6.821E-05 0.00064322
0.02625
10
0.006432161 1.79064E-05
4
1G-0L 0.2093706 10.2529633
0
0
0
0
8733.75
0
0
5
1G-1L 0.0006287 0.31343975
0
0
0
0
26.2275
0
0
0
6
1G-2L
6.294E-07 0.00059669 0.18 1.133E-07 0.0001074 0.00099239
0.02625
9.3611
0.009289868 2.63922E-05
7
2G-0L 0.2093706 10.2529633
0
0
0
0
8733.75
0
0
8
2G-1L 0.0006287 0.31343975
0
0
0
0
26.2275
0
0
0
9
2G-2L
6.294E-07 0.00059669 0.45 2.832E-07 0.0002685 0.00248098
0.02625
17.8944
0.044395587 0.000126126
10
1&2G-0L 0.0897303 6.10327512
0
0
0
0
8733.75
0
0
11
1&2G-1L 0.0002695 0.1394639
0
0
0
0
26.2275
0
0
0
12
1&2G-2L 2.697E-07 0.00026086 0.58 1.564E-07 0.0001513 0.00137044
0.02625 22.81897
0.031272125 9.06278E-05
FOR ALL SYSTEM CONTINGENCIES
6.264E-07 0.0005954 0.00548703
FOR TRANSMISSION CONTINGENCY (N-I)
0 0.0005954 0.00548703
0
0.091389741 0.000261053
$2,705.14
$7.73
FOR THE YEAR 2002 COST OF ENERGY NOT SERVED AT $29600 PER MWh
APPENDIX C
Discussion of CREAM and SDDP software packages
C1
CREAM Monte Carlo Composite Reliability Model

The CREAM program is a simple, approximate, transmission constrained,
production costing model. Reliability aspects are handled by solving the model a
large number of times, with a random sampling process used to create outages in
system components for each run. Outages are modelled for both transmission
and generation components. Each model run calculates a least cost dispatch
solved using linear programming, with transmission constraints, for the particular
configuration generated by the Monte Carlo sampling procedure.
A DC load flow is used to calculate transmission system constraints on the
generation dispatch. To account for an n-1 security standard, the load flow is
solved for each of a list of specified contingencies, and the loading on other
specified lines is required to remain within allowable limits. The constraints
generated by the n-1 test are incorporated in the linear program used to calculate
the dispatch.
Transmission line losses can be incorporated into the model if required. Losses
are assigned equally to the two busses at either end of each line under study.
Successive approximations linear programming is used to calculate losses, rather
than the piecewise linearization method used in the SPD model for the New
Zealand market. Bus marginal costs are calculated by this model, i.e. nodal
prices, as in the New Zealand electricity market. In addition, the marginal value
of transmission capacity is calculated, taking into account both the capacity
constraint and the impedance of the line. This value should be very useful in
quickly identifying potential investments.
CREAM models system performance over a number of time periods, and uses a
load duration curve within each period to represent load variability. The load
duration curve is approximated by a number of piecewise constant load blocks.
The algorithm proceeds as follows:
1.
2.
Read input data:
network data (network topology, circuit characteristics, limits etc. as required by

standard power flow runs)
generation data (plant characteristics, operation costs, outage data etc. as required
by standard generation production costing runs);
system data (interchange limits, operation constraints etc.);
load data (per stage and load block);
statistical data (equipment failure and repair rates);
maintenance schedule;
system expansion data (plant, bus and circuit modifications).
Simulation procedure
repeat for each stage
repeat for each load block
read load
establish operating constraints
repeat for each Monte Carlo game
sample equipment outages along the stage
solve the security-constrained dispatch
calculate operation costs, marginal costs and reliability indices
end repeat
accumulate the system statistics
end repeat
end repeat
The transmission-constrained dispatch for each load block is obtained as the

solution of the following linear programming (LP) problem:
z=
Min
cj gj
j=1
Subject to
B + g = d
_
gg
_
|S| f
z
j
J
cj
g
_
g
B
S
_
f
(3)
system operation cost

indexes generators
number of generators
cost of the jth plant
generation vector
generation capacity vector
susceptance matrix
voltage angle vector
diagonal matrix of circuit susceptances
circuit node incidence matrix
circuit flow limit vector
CREAM does not model the AC system in as much detail as some other
probabilistic reliability models, and therefore will not give results which can be
reasonably compared the use of a DC load flow restricts attention to real power
flows. Hence it is clearly less effective in considering the very detailed
performance of transmission system components as can be done by other
systems such as the VENcorp model. In addition, CREAM uses a five block load
duration curve, which results in some loss of detail of peak loads, which may be
significant in the example case studied.
Due to the more limited capability of the CREAM model to represent transmission
system features, a test of this model has not been carried out it is likely that
other models are superior when detailed representation is required.
C2.
Hydro-Thermal Optimal Dispatch Models

The production costing models approach used in CREAM is intended primarily for
use with for thermal power systems, where installed capacity and the reliability of
this capacity is the major issue. For hydro dominated systems, the loss of any
one unit has less impact as in most cases replacement generation can be
obtained quickly. The significant issue is that line loading will vary considerably
with hydrological conditions. Steady state line loadings are a function of inflow
and reservoir storage conditions, as well as demand.
The CREAM model uses the same equations as the Stochastic Dual Dynamic
Programming model (SDDP) CREAM appears to have been developed using
the SDDP solution methodology adapted for thermal plant dispatch, with the
addition of Monte Carlo sampling for outages. SDDP carries out a least cost
dispatch for the complete power system, with transmission constraints, including
n-1 transmission contingency constraints. When incorporating the effects
contingencies, the model will carry out any necessary re-dispatch of generation to
enforce that constraint. A useful output from SDDP in the context of this study is
the value of transmission capacity expansion, which takes into account
hydrological variation. A stochastic model is essential for any of these studies.
A transmission constrained hydro-thermal dispatch model can be used to assist
in transmission planning in the following ways:
1. Examination of marginal value of line capacity limits, with n-1
contingency constraints, will show many of the lines which are
candidates for a more detailed probabilistic study.
2. Providing a series of data points for line loading, transmission flows
and demand which apply simultaneously this will capture the likely
effect that generation is maximum when lines are fully loaded and
when demand is high.
3. Line loading distributions will indicate which lines are likely to
become constrained in the future, or which could become
constrained under some line outage conditions.
4. Performing studies with and without expanded line capacity will
enable quantification of the economic benefits of the expansion, on
a system-wide basis, i.e. permitting more flexible generation
dispatch.
5. The overall economic benefit of some non-transmission related
solutions to transmission constraints can be estimated, i.e. the value
to the system of locating some reserve generation downstream from
a transmission constraint can be calculated.
6. The impact of major developments such as modification of HVDC
capacity or the construction of large new power stations will change
power flows system-wide. A hydro-thermal dispatch model will
enable analysis of the needs for new capacity in situations that are
significantly different from todays power flows.
While SDDP has been referred to here, other models with similar capabilities may
be available. It is important that the model is both stochastic and optimal in some
consistent sense a model based on a mathematical optimisation provides
marginal values which are a very useful part of this type of analysis. SDDP has
been referenced in this discussion because it is capable of giving the required
outputs. It has been used previously on the New Zealand system and gave
reasonable results for a model including 168 busses and 280 lines.
APPENDIX D
Bibliography
From M.Bhavaraju, Application of Contingency Evaluation Techniques to Practical

Systems, in Reliability Assessment of Composite Generation and Transmission Systems,
IEEE 90EH0311-1-PWR, 1990.
2
Victorian Energy Corporation Melbourne Victoria, "VENcorp Electricity Transmission

Network Planning Criteria" July, 2003
S. Lee & S.Hoffman, Industry-Wide Power Delivery Initiative Bears Fruit, in IEEE
Computer Applications in Power Magazine, July 2001.
4
E.Preston, W.M. Grady & M.Baughman, A New Planning Model For Assessing The Effects
Of Transmission Capacity Constraints On The Reliability Of Generation Supply For Large
Nonequivalenced Electric Networks, IEEE PAS, August 1997.
Y.V. Makarov, On Risk-Based Indices for Transmission Systems, California ISO
P.F.Bach, Nordel Reliability Criteria, IEA Reliability Workshop Paris, 2004-03-29
D.Zhu, Power System Reliability Analysis With Distributed Generators, Masters Thesis,
May 2003.
8
Y.Li, Bulk System Reliability Evaluation In A Deregulated Power Industry, Masters Thesis,
University of Saskatchewan, December 2003.
9
J-P.Paul & K.Bell, A Flexible & Comprehensive Approach To The Assessment Of Large
Scale Power System Security Under Uncertainty, PMAPS, 2002.

Probablistic Planning

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Probablistic Planning

Uploaded by

Copyright:

Available Formats

PARSONS BRINCKERHOFF ASSOCIATES

PROBABILISTIC TRANSMISSION PLANNING

PB Associates Quality System

p:\pba\150251 Probabilistic Transmission Planning

Michael Emmerton, Don Somatilake

Bruce Stedall, Ryno Verster

PROBABILISTIC TRANSMISSION PLANNING

Background and Scope...................................................................................... 10

Structure of the Report....................................................................................... 10

HISTORICAL DEVELOPMENT .................................................................................. 11

Limitations of Deterministic and Probabilistic Techniques .................................. 11

United States ..................................................................................................... 18

NEW ZEALAND MODEL SPECIFICATION................................................................ 27

Value of Customer Reliability (VCR) .................................................................. 27

PROBABILISTIC TRANSMISSION PLANNING

Demand-Side Management ............................................................................... 27

Technological Advancement & Thermal limits .................................................... 28

Specification 1 VENCorp Model (Markov States Model) ............................... 29

Specification 2 Frequency & Duration Model ................................................ 34

Specification 3 Monte Carlo Model ............................................................... 35

Specification 4 Load Management All Methods.......................................... 36

RESULTS OF ECONOMIC PLANNING EVALUATIONS ........................................... 37

VENCorp Model (Markov States Model) .......................................................... 37

Frequency- Duration Model ............................................................................. 48

Monte Carlo Model .......................................................................................... 57

Load management Model ................................................................................ 58

CREAM Monte Carlo Composite Reliability Model ........................ 5-2

PROBABILISTIC TRANSMISSION PLANNING

Usually expressed as the Value of Customer Reliability (VCR)

PROBABILISTIC TRANSMISSION PLANNING

quantify the likelihood and consequence of a supply loss, and

apply the grid-benefits test to the plan.

2. Probabilistic Planning: To illustrate the technical application of three

PROBABILISTIC TRANSMISSION PLANNING

210 270 MW Regional Load

Generation at Cobb 0 - 30MW

ISLINGTON BUS 220kV

Figure 1: Northern South Island System Model

ENERGY NOT SERVED (MWh)

Figure 2: Comparison of EUE for different probabilistic methods

Application of the Grid Benefits Test

PROBABILISTIC TRANSMISSION PLANNING

A third 220kV circuit (capital cost $15M, lead time 4 years);

A 50MW diesel station supply at 110kV (capital cost $70M)4.

EXPECTED UN-SERVED NERGY (MEGAWATT-HOURS)

Figure 3: EUE For Composite Investment Plan

PROBABILISTIC TRANSMISSION PLANNING

Table 1: Composite Investment Plan

PROBABILISTIC TRANSMISSION PLANNING

Table 2: Comparison with Third Circuit Investment

PROBABILISTIC TRANSMISSION PLANNING

Table 3: Forecast EUE Using Three Methods

Defines adequacy and

PROBABILISTIC TRANSMISSION PLANNING

Least suitable, but

The Frequency-Duration method is computationally more difficult to apply, but delivers

PROBABILISTIC TRANSMISSION PLANNING

3. In the interests of efficiency, a robust planning process would comprise an initial

PROBABILISTIC TRANSMISSION PLANNING

This study was commissioned by the Electricity Commission.

BACKGROUND AND SCOPE

A best practice explanation of the probabilistic planning techniques in use

Demonstration of the techniques including technical and economic

STRUCTURE OF THE REPORT