The present paper attempts to analyze the implications of the relationship between reliability and rationing cost involved in a power supply system in the framework of the standard inventory analysis, instead of the conventional marginalist approach of welfare economics. The study is substantiated by fitting a normal distribution to the daily internal maximum demand of the Kerala power system during the four-year period from 2010-11 to 2013-14, and also by estimating, based on the techno-economic parameters of a 660 MW thermal power plant, the rationing costs implied in different reliability target criteria.
This study suggests a new approach to the relationship between reliability and rationing cost involved in a power supply system; it also contributes in the existing literature to the standard inventory analysis by linking it to reliability analysis.
Power supply, Maximum demand, Installed capacity, Reliability, Rationing cost, Normal distribution, Exponential distribution.
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