A contingency is an unexpected failure or outage of a system component such as generator, transmission line, circuit breaker, or other electrical element. To maintain reliability, the bulk electric system must be prepared to handle one or more contingencies without loss of system stability. To do this, the system must be able to transition to a new configuration where other equipment or resources pick up the function of the failed or lost component while also ensuring that components remaining in service are not overloaded.
Contingency analysis considers various scenarios to evaluate the impacts of contingencies and prioritize the development of continency plans. Planning for managing contingencies often uses the n-1 criteria. This means that the network should be able to continue functioning despite loss of the largest single contingency. In some cases this is a large power plant such as a nuclear generating station; in others it may be a large transmission line used to import power or deliver power from a region with significant generation to a region with significant amounts of load.
A contingency plan includes how the system will be reconfigured in the event of one or more significant contingencies. For certain critical loads on a system more robust planning criteria such as n-2 may be used. Criteria that determine acceptable contingency conditions are determined by system operating limits. A system operating limit is the value (in MW, MVAR, amperes, frequency, or volts) that satisfies the most limiting operating criteria for a specified system configuration and ensures operation with acceptable reliability. Typical operation criteria include facility ratings, transient stability rating, voltage stability rating, and system voltage limits.