Reactive Power Pricing Technique in A Competitive Market

Abstract

For maintaining voltages of each bus within specific range, proper reactive power support is mandatory. Reactive power is considered as an ancillary service in the restructured electricity market, hence it is price based service and controlled by ISO. Here, a modified optimal power flow (OPF) optimization method is proposed over the bids received from Gencos and to maintain the system security and stability subject to the constraints imposed by different limits such as thermal limits, voltage limits and stability limits. The modified OPF model is used to ensure the system security and the expected payment function (EPF) of generators is considered to develop a bidding framework. Total payment function (TPF) based OPF is taken to clear the pay-as-bid (PAB) market. In the present work, a 24 bus RTS network is used for analysis and demonstration of the results. The system security is preserved even in the worst contingency state.

Keywords: Reactive power pricing, pay-as-bid, ancillary services, contingency analysis, reliability test system, GAMS, reactive power procurement, payment function