Abstract
This paper studies the performance of Esscher's larce deviation approximation scheme for the calculation of the LOLP index and the unit capacity factors in a production costing context. This approximation is found to be accurate and speedy for the purpose of LOLP corputations. The proposed large deviation algorithm also represents a viable computational procedure for determining production costing functions. It appears to be very accurate for the purpose of estimating the capacity factors of peaking units.

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