Reservmarginal

reservmarginal is a concept used in system planning to denote the marginal reserve required to accommodate a unit increase in demand. It captures how much extra reserve capacity must be available when demand rises, all else equal. The term is used in energy systems, inventory management, and operations research to support capacity decisions and reliability assessments.

Definition and formulation: Let R(d) be the minimum reserve required to meet forecast demand d. The reservmarginal at demand level d is m(d) = dR(d)/dd, the derivative of the reserve function with respect to demand. In simple linear models, R(d) = a d + b, giving m(d) = a, a constant marginal reserve per unit of demand.

Example: If R(d) = 0.15 d + 50, then m(d) = 0.15. This means that for each additional unit of demand, 0.15 units of reserve are required, while the fixed term of 50 units reflects non-variable reserve commitments.

Applications and limitations: Applications include capacity planning, investment evaluation in generation and storage, and reliability budgeting. Reservmarginal can guide whether to add new capacity or rely on demand response. Limitations include the assumption of a differentiable reserve function, potential nonlinearity, and uncertainty in demand forecasts and regulatory constraints.

Related concepts include reserve capacity, marginal cost, reliability margin, and capacity credit.