Based on a new perspective in coordinating with the traditional ‘‘N-1’’ criteria and system risk, a real-time electricity market model is presented, in which the system risk is employed to model the system’s overall security level.This new model is called the risk-based security-constrained economic dispatch (RB-SCED). Relative to the security constrained economic dispatch (SCED) used in the power industry today, the RB-SCED finds more secure and economic operating conditions. It does this by obtaining solutions that achieve a better balance between post-contingency flows on individual branches and the overall system risk. The method exploits the fact that, in a SCED solution, some post contingencybranch flows which exceed their limits imposelittle risk while other post-contingency branch flows whichare within their limits impose significant risk. The RB-SCED softens constraints for the former and hardens constraints for the latter, thus achieving simultaneous improvement in both security and economy. In this work, the basic concept and the mathematical formulation of the RB-SCED model are system atically described. Experimental results on a 9-bus systemand the ISO New England actual system have demonstrated the advantages of RB-SCED over SCED.