In the present scenario of energy demand overtaking energy supply, top priority is given for energy conservation programs and policies. As a result, most existing systems are redesigned or modified with a view for improving energy efficiency. Often these modifications can have an impact on process system configuration, thereby affecting process system reliability. The paper presents a model for valuation of process systems incorporating reliability that can be used to determine the change in process system value resulting from system modification. The model also determines the break even system availability and presents an algorithm for allocation of component reliabilities of the modified system based on the break even system availability. The developed equations are applied to a steam power plant to study the effect of various operating parameters on system value. (C) 2008 Elsevier Ltd. All rights reserved.