A RENEWAL REWARD APPROXIMATION FOR THE VARIANCE OF ELECTRIC-POWER PRODUCTION COSTS

The cost of producing electric power over a specified study horizon is a random quantity influenced by random failures and repair times for the generating units and variations in demand over time. Previous appr oaches for determining the variance of the production cost have requir ed implicit or explicit enumeration of a large set of availability or capacity states for the generation system. In this paper, a simplifyin g assumption makes possible a renewal reward model for the production cost. Formulas are provided to estimate the asymptotic variance for in termediate to long study horizons and their results are illustrated wi th a numerical example.