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Abstract There are increasing challenges in the power industry to plan a system that provides adequate generation capacity to sustain the load when the renewable energy penetration level is extremely high or 100%. This study proposes a stochastic production cost simulation method to evaluate the generating capacity reliability in power systems with high renewable penetration. In comparison with conventional approaches, such as planning reserve margin and probabilistic assessment, the proposed method can consider hourly chronological characteristics of the system operation, which is significant in the planning process for integrating new resources, such as storage, demand response, and renewables. The method was tested on the modified ISO New England system based on two scenarios: 45% renewable penetration and 100% clean energy. In addition, several sensitivity analyses were conducted following each scenario. Simulation results indicated that the proposed method can be used to quantify the reliability value of the system under various renewable penetration levels. When the system is not reliable, this method can be used to determine additional capacity required to ensure system reliability.