  The security-constrained economic dispatch (SCED) problem tries to maintain
the reliability of a power network by ensuring that a single failure does not
lead to a global outage. The previous research has mainly investigated SCED by
formulating the problem in different modalities, e.g. preventive or corrective,
and devising efficient solutions for SCED. In this paper, we tackle a novel and
important direction, and analyze the economic cost of incorporating security
constraints in economic dispatch. Inspired by existing inefficiency metrics in
game theory and computer science, we introduce notion of price of security as a
metric that formally characterizes the economic inefficiency of
security-constrained economic dispatch as compared to the original problem
without security constraints. Then, we focus on the preventive approach in a
simple topology comprising two buses and two lines, and investigate the impact
of generation availability and demand distribution on the price of security.
Moreover, we explicitly derive the worst-case input instance that leads to the
maximum price of security. By extensive experimental study on two test-cases,
we verify the analytical results and provide insights for characterizing the
price of security in general networks.
