Research On Pricing Of Reactive Power As Ancillary Service In Power Markets

For reactive power as a kind of auxiliary service in power market, based on analysis to generators' operation limits and production cost of reactive power, this paper proposes a segmented bidding model of generators' reactive power generation. The proposed model ensures generation companies to compensate "loss of opportunity cost" by the generator generating amount of reactive power instead of active power, also suitable for independent system operator (ISO) procuring enough reactive power to meet the demand of reactive power and voltage support by power systems. From the viewpoint of ISO, this paper provides a dispatching reactive power model, based on optimal power flow, which is minimized both the cost of procuring reactive power auxiliary service and the losses of active power. The proposed model is solved by Genetic algorithm to obtain the optimal procurement strategy of reactive power as auxiliary service. According to the model of procuring reactive power, every part of reactive power's expenditure is allocated to reactive power users respectively, mainly includes the expenditure of generators, cost of system, the losses fee caused by reactive power loads and so on. Lastly, some numerical tests are given to verify the proposed model and algorithm correction and effectiveness.