In the context of the growing penetration of renewable power sources in power systems causing probabilistic contingency conditions, a suitable economic dispatch model is decisively needed. There is a lack of research in the field of probabilistic mathematical formulation considering the uncertainties due to the stochastic nature of renewables and contingency occurrence, as it is a very complex problem to be solved. The most appropriate model is the stochastic security-constrained economic dispatch (SSCED) model for optimized economic dispatch decisions during uncertainty. However, because of its complexity, it is rarely employed. This paper attempts to solve the complex SSCED problem in the presence of the uncertainty of resources and probabilistic contingency conditions, which is a novel effort in this regard. The SSCED is carried out over multiple periods to provide the load-following or contingency reserves. In the proposed SSCED, the uncertainty problem is addressed by modeling the stochastic wind energy power source by using “probability transition scenarios”. The uncertainty caused by probabilistic contingency conditions in the dispatch schedule is approximated using a “state-specific transition matrix”. The frequency control reserves in contingency conditions are co-optimized with energy, and stochastic security-constrained economic dispatch is achieved. The efforts are put forward to suggest a new market model in the presence of the uncertainty of renewable energy availability. Case studies are examined to show the potential technical and financial advantages of the proposed SSCED through co-optimization. Grid-connected microgrid owners offer frequency control ancillary services by providing load-following ramping reserves in the normal state and contingency reserves in the state of contingency. The probabilistic contingencies considered are generator failure and an underloading condition. A modified “IEEE 30 bus system” is considered a grid-connected microgrid for testing the proposed SSCED. The results show that the greater the flexibility of the resources, the greater the technical and economic benefits. The increase in ramping flexibility of a wind source results in almost an 8.1% reduction in operational costs compared to the base case. The contingency condition analysis shows that the presence of ramping reserves in the system enhances the power system performance, avoiding the cascading effects that ultimately cause a power system failure.