The loss-of-load expectation (LOLE) risk metric has been used in probabilistic power system resource adequacy assessment for over 70 years, and today is one of the most recognizable and widely-used measures of system shortfall risk. However, this wide adoption has been accompanied by ambiguities and inconsistencies in its definition and application. This paper provides a unifying reference for defining the metric as it relates to modern analyses, while clarifying a number of common points of confusion in its application. In particular, the paper clarifies that LOLE is not a measure of expected total shortfall duration, that a 2.4 hours per year LOLE target implies a less reliable system than a 1 day in 10 years (0.1 days per year) LOLE target, and that exact conversions between hourly and daily LOLE targets are not generally possible. Illustrative examples are provided to help explain each of these points

his technical report reviews the state-of-the-art in composite system reliability (CSR) evaluation. Reliability assessment methods for composite generation and transmission systems have been developed in recent decades. However, maintaining an adequate level of reliability of the modern power grid is particularly challenging today due to many causes such as increasingly frequent extreme events (e.g., failure of multiple physical components, extreme weather events, and other natural disasters), high penetration of variable energy resources (VERs), and the increasing complexity of energy system infrastructure. Despite the numerous reliability analysis methods that exist today, including enumeration (analytical) methods and Monte Carlo methods, the computational burden is still a major obstacle to applying CSR analysis in an actual large-scale composite system, especially in the area of operations. Organizations and utilities in North America (including the North American Electric Reliability Corporation or NERC), Europe, Asia, and other places in the world have been searching for appropriate methodologies and computing tools.
Based on extensive discussions and experience sharing among task force members from research organizations, utility companies, software developers, and regulatory bodies, the Composite System Reliability Task Force (CSR TF) has focused on some of the most commonly seen concerns and issues related to the adequacy and operational reliability of a composite system. The TF has attempted to address these concerns by gathering best practices from published literature and users of probabilistic tools in the electric power industry.
The objective of this report is to provide guidelines and suggestions for power industry professionals who are considering applying probabilistic methods in CSR analysis. This report, therefore, also investigates other factors that affect the use of probabilistic techniques by electric utilities.
Finally, the report provides useful references for the development of NERC guidelines and standards relevant to CSR adoption in the industry.