Operating reserve is surplus operating capacity that can instantly respond to a sudden increase in the electric load or a sudden decrease in the renewable power output. Operating reserve provides a safety margin that helps ensure reliable electricity supply despite variability in the electric load and the renewable power supply.
Tip: "Spinning reserve" is a more common term that means exactly the same thing as operating reserve. We call it operating reserve simply because batteries, fuel cells, and the grid can provide it, but they do not spin.
Power systems must always provide some amount of operating reserve because the electric load tends to jump around randomly. Without operating reserve, the load would sometimes exceed the operating capacity of the system and the lights would go out. Systems that include wind and solar power sources require additional operating reserve to guard against random decreases in the renewable power supply.
The operating reserve is equal to the operating capacity minus the electric load. HOMER keeps track of the operating capacity (and hence operating reserve) separately for the AC and DC buses. It accounts for the efficiency and the capacity of the converter when operating reserve on one bus is needed to cover load on the other bus. For example, consider a diesel-storage-inverter system serving an AC load. If the storage is discharging 2 kW but is capable of discharging 10 kW, it is providing 8 kW of DC operating reserve. If the inverter efficiency is 90% and the inverter capacity is not a limiting factor, that 8 kW of DC operating reserve corresponds to 7.2 kW of AC operating reserve. In other words, the storage bank could supply the AC load even if the load suddenly increased by as much as 7.2 kW. But the inverter capacity can be a limiting factor. If the inverter capacity (the maximum amount of AC power it can provide) is 5 kW, then the storage bank provides only 3.2 kW of AC operating reserve, since the inverter is providing 1.8 kW of AC power to serve the load and therefore has 3.2 kW of excess capacity.
When simulating systems, HOMER attempts to keep the operating reserve equal to or greater than the required operating reserve. That may necessitate operating a generator that is not needed to meet the average load (or a larger generator than is needed to meet the average load) just to satisfy the operating reserve requirement.