Distributed energy resources' role on reducing reliability cost

Capacity market is one of the most successful mechanisms to ensure resource adequacy in power systems where capacity providers sell their products in a competitive manner. High investment costs, long construction periods, and lack of enough competition between capacity providers in some sections of the system are factors which may justify employing distributed energy resources in the capacity market. Hence, the method proposed in this paper aims at reducing reliability costs and mitigating the market power using the mentioned resources considering load duration curve factor. In the capacity market, reliability costs are calculated as the sum of costs paid to the conventional generators and renewables; these costs are proportional to the capacity price at their busses and to the costs paid to consumers for their participation in demand side management programs according to their share. The proposed method has been tested on an IEEE 57-bus test system, and simulation results demonstrate its effectiveness.