Operating reserve allocation in the Caribbean small island electricity market with high shared variable renewable energy: A review and methodological framework

Caribbean Small Island Developing States (SIDS) face unique challenges for operating reserve allocation due to isolated operation, low system inertia, limited operational flexibility, and increasing uncertainty associated with variable renewable energy (VRE). This paper presents a systematic literature review of regulatory frameworks, electricity market structures, and optimization approaches for operating reserve allocation across the 15 United Nations-affiliated Caribbean SIDS. A comparative assessment is performed to evaluate the applicability of existing optimization methodologies to the operational characteristics of Caribbean SIDS. The review identifies Mixed-Integer Linear Programming (MILP) as the most suitable computational foundation for reserve allocation, while highlighting the complementary roles of robust and stochastic optimization under different levels of uncertainty and data availability. The analysis further reveals five key research gaps, including the absence of integrated methodological frameworks adapted to the regulatory, operational, and institutional characteristics of Caribbean SIDS. To address these gaps, a PDCA-based continuous improvement framework is proposed, providing a structured and adaptable methodology to support reliable reserve allocation, facilitate higher VRE integration, and promote sustainable electricity market development in isolated island power systems.