With the background of electricity market reform where it is granted that elastic and adaptive demand can provide spinning reserve capacity for the power system

the joint optimal model of spinning reserve capacity cost and load interruption cost based on optimal power flow is proposed. The model of load interruption cost considers the change of users’ cost for interruption with the change of power market balance point. The influence of demand elasticity on optimal system spinning reserve is then studied. The results of IEEE 14bus system show that along with the increment of demand elasticity the spinning reserve capacity of operation is tending towards contraction and spinning reserve capacity cost in all is also decreasing. It is also helpful to the benefit of system operation.