Define 'Capacity Planning' in the context of reliability.

Capacity planning is a critical process within the field of reliability that focuses on ensuring that the available resources can meet future demand effectively. This involves forecasting future needs based on various factors, including historical usage patterns, projected growth, and changes in demand. By systematically analyzing these elements, organizations can determine the appropriate level of resources—such as generation capacity, transmission capabilities, and grid management tools—required to maintain system reliability and prevent shortages.

The focus is on proactively managing supply and demand to avoid any disruptions, ensuring that there is enough capacity to handle peak loads and unexpected contingencies. This planning not only supports stable operations but also enhances the overall reliability of the electric grid, helping to prevent outages and maintain a consistent supply of electricity to consumers.

In contrast, while minimizing operational costs is an important consideration for many utility operations, it does not directly define capacity planning. Evaluating past performance data can inform capacity planning but is only a part of the overall process rather than the definition itself. Lastly, the development of new generation facilities is an action that could result from capacity planning but does not encompass the entire scope of what capacity planning involves.