Research Of Reactive Power Pricing In Power System Based On Optimal Power Flow

Developing an accurate and feasible method for reactive power pricing is getting more and more important with the fast development of the electricity markets as reactive power service is a very important ancillary service. However, as the research has not received significant attention until recently, the theory on it is still not well defined. The paper presents the preliminary analysis and research about the reactive power costing and pricing in the electricity markets.This paper first concludes electricity markets and ancillary services, and introduces the research meaning and situation in reactive power pricing.Secondly, the reactive power service, its procurement, the situation in the reactive power market abroad, and its production cost is discussed in this paper. The reactive power pricing structures inside and outside the country is reviewed and summarized. A nodal spot pricing model based on OPF is proposed. The proposed model includes the reactive power production cost of generators and the investment cost of capacitors into the constrained conditions. The expected reactive power price can not only cover most production cost of reactive power but provide enough economic information.Then, the methods to solve OPF are discussed. Modern interior point method due to its good calculation performance is chosen to implement the model proposed in this paper.In the end, a 5-bus system and the 4-118-bus IEEE standard systems are used in the studies to show the process of the method proposed in the paper. The simulation results demonstrate the accuracy and the validity of the proposed method.