Decision-making on operational reserve capacity has been guided by deterministic criteria in most of cases

or by probabilistic algorithms in a few researches. Both kinds of approaches don’t consider the loss resulting from generation inadequacy and cannot coordinate different kinds of reserves. Risk is a computable quantity which can be used to integrate the security with economics into a formal decision-making algorithm. Based on risk management

an optimal decision-making method is presented for reserve capacity in this paper

which coordinates various kinds of reserve resources including instantaneous and non-instantaneous generation capacities as well as interruptible loads. Simulations show that the presented method can balance the supply-demand reliably as well as cost effectively.