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Spinning reserve carried on synchronized units is the most effective resource available to the system operators for managing unforeseen power unbalances, such as demand fluctuations and the sudden loss of generation equipment. The amount of reserve and the speed that it can effectively be deployed determine the supply reliability that the generation system can achieve. Carrying more spinning reserve reduces the probability that the generation system become unable to preserve the momentary power balance and costly remedial actions, such as involuntary load shedding, turns unavoidable to prevent a system collapse. Nevertheless, providing spinning reserve on a continuous basis is expensive. Indeed, the provision of spinning reserve entails incurring in startup costs to commit generating units in excess of the forecasted load, which consequently have to be dispatched at less efficient operating points. The problem of keeping the power balance is still more difficult in stand-alone wind-diesel power systems, since these systems are additionally subjected to random power fluctuations originated in the uncertain and intermittent nature of the wind resource. Furthermore, autonomous power system cannot rely on power imported from interconnections for preserving the power balance. The inherent characteristics of these systems require scheduling more reserve on synchronized units for ensuring adequate security and reliability levels. The higher reserve requirements may substantially deteriorate the economy of these supply systems. The costs of keeping spinning reserve must be compared with the benefits that it provides in terms of lower expected costs of interruptions. In essence, the optimal reserve level can be set so that the marginal cost of carrying an additional MW equals the marginal reduction of the expected load curtailment costs. Despite the apparent simplicity of this optimality condition, determining the optimal amount of spinning reserve in a practical setting presents substantial modelling complexities and computational challenges. Given the random nature of the disturbances and contingencies that may face a generation system, assessing the benefits of carrying a certain amount of spinning reserve involves quantifying the occurrence probability, duration, extent and costs of load loss events. Such evaluation entails modelling the stochastic behaviour of system operation by considering the random failure of system components and the stochastic fluctuations of load and wind generation. The problem is

Optimization of Spinning Reserve in Stand-alone Wind-Diesel Power Systems