Reactive power pricing in deregulated electricity market (original) (raw)
Related papers
Reactive Power Pricing Issues in Restructuring Power System
International Journal of Advance Engineering and Research Development, 2015
Voltage control is an inherent part of power system operation. Due to the tight coupling between reactive power and voltage magnitude, reactive support is the means used to ma intain the desired voltage profile. The reactive power is treated as a service whose purpose is to support system reliability and security. Reactive power is an important support service in the current power market. Power producers or generators have the o pportunity to offer this service to make a profit so reactive power pricing is necessary in electricity markets. A review of the important issues of reactive power support, cost analysis, reactive power pricing is shown in this paper. An IEEE-14 bus system is used for the Optimal Power Flow using MAT power.
A new approach for cost allocation and reactive power pricing in a deregulated environment
Electrical Engineering, 2009
Power industry has been facing restructuring problems during the past decade. Appropriate management of reactive power is very essential for supporting power system security. Reactive power has dominant effects on real energy transfer. Furthermore, it can support the secure operation of the system as an ancillary service. However, most researches have been focused on active power as the main good transacted in electricity markets. On the other hand, while reactive power production cost is highly dependent on real power output, it is mainly confined to local consumption. As a result, to avoid market power and to maintain the secure operation of the system, a fair cost allocation method seems to be very essential. Appropriate pricing of reactive power as an ancillary service has been a challenging problem during the past decade. However, most methods proposed so far for reactive power pricing are essentially based on empirical approximations. In this paper, a new method for reactive power cost allocation is proposed. The method is based on calculation of the accurate cost which will be imposed on generators due to supporting reactive power. The proposed method is fair, accurate and realistic and it can be formulated very easily. Furthermore, a new approach based on tracing algorithm is proposed for pricing of reactive power which considers the cost of both active and reactive losses allocated to each generator. Application of the proposed method on IEEE 9-bus standard network confirms its validity and effectiveness.
A study of reactive power marginal price in electricity market
Electric Power Systems Research, 2001
Developing an accurate and feasible method for reactive power pricing is significant in the electricity market. The reactive power price cannot be obtained accurately by conventional optimal power flow models which usually ignore the production cost of reactive power. In this paper, the authors include the production cost of reactive power into the objective function of the optimal power flow problem, and use sequential quadratic programming method to solve the optimization problem and obtain reactive power marginal price accordingly. A five-bus test system is used for computer study. The results from eight study cases show clearly the effects of various factors on reactive power marginal price. : S 0 3 7 8 -7 7 9 6 ( 0 0 ) 0 0 1 1 9 -X
A PRODUCTION COST MODEL FOR REACTIVE POWER IN ELECTRICITY MARKET
In a restructured power market, supply of reactive power is an essential ancillary service provided by an Independent System Operator taking into account the voltage stability and reliability of the power system. The generators are the main producer of reactive power. The production cost of generator reactive power should be consideredfor reactive power pricing. In this paper, the production cost of real and reactive power was considered in the objective function of the optimal power flow problem.Different methods were presented to obtain the reactive power cost equation of the generator. The triangular method is based on generator power factor to allocate the cost for reactive power service. Real power based method and apparent power based method depends on the opportunity cost of the generator for reactive power cost allocation. These methods are illustrated with IEEE-14 bus power systems to show its validity andpracticability.
A new framework for reactive power market considering power system security
This paper presents a new framework for the day-ahead reactive power market based on the uniform auction price. Voltage stability and security have been considered in the proposed framework. Total Payment Function (TPF) is suggested as the objective function of the Optimal Power Flow (OPF) used to clear the reactive power market. Overload, voltage drop and voltage stability margin (VSM) are included in the constraints of the OPF. Another advantage of the proposed method is the exclusion of Lost Opportunity Cost (LOC) concerns from the reactive power market. The effectiveness of the proposed reactive power market is studied based on the CIGRÉ-32 bus test system.
Reactive power management and pricing
2003
This thesis investigates the development of a dispatch/pricing model to examine the effect of maintaining voltage stability margins on spot prices, and also presents models for voltage stability constrained reactive power planning. We develop an AC OPF primal problem incorporating both multiple generator contingency constraints and multiple voltage stability margin contingency constraints. Active and reactive power trade off functions for the generators and the opportunity cost of foregoing active power generation to provide increased reactive power are considered. The objective is to minimise costs while maintaining the capability to deal with pre-defined contingency events. The dual of the primal problem is analysed to determine generation, reserve and demand price equations, which are examined to establish the effects on ~ctive and reactive power spot prices of generator contingency constraints and voltage stability margin contingency constraints. We also develop a voltage stability constrained and contingency constrained reactive power planning model. This uses a non-linear mixed integer programming algorithm to efficiently formulate and solve the V AR planning problem. Next, a statistical approximation procedure simplifying the voltage stability constrained planning model is presented. An equation of the locus of the PoCs is developed using statistical regression methods and used to simplify the full MINLP model. Finally, a preventive/corrective control model is developed to guard against voltage instability while taking into account the load-shed dynamics.
REACTIVE POWER COST ANALYSIS IN RESTRUCTURED POWER SYSTEM
As the deregulated electricity market is moving towards the competition, different services those are provided by the system operator are separated. Ancillary services like power factor control, frequency control, voltage control and reactive power management are secondary services to ensure that the system is more secured. It is required that the system voltage is always to be maintained with in the specified limits of the system. To achieve this, system operator has to provide the voltage control service using the reactive power sources. The function of the system operator is to identify the reactive power sources and loads. According to this, the payments are allocated to the customers and distributed among the providers. For this, a transparent reactive power cost allocation technique is to be identified. In this paper, an existing reactive power cost allocation method i.e., modified Y bus method is compared with proposed method i.e., improved Y bus method of reactive power allocation and its cost including line charging admittance, proportional sharing and equal sharing. The sample 5 bus system and IEEE 24 bus system are used to illustrate the proposed method. The simulation of computation of reactive power and its cost has been carried out using MATLAB programming. The simulation results are presented and analyzed.
Energy Policy, 2017
In this paper, a new reactive power market structure is studied and presented. Active power flow by itself causes active and reactive losses. Considering such losses in the reactive power market is the main purpose of this paper. Therefore, this study attempts to improve the reactive power market and create fair competition between producers. To that end, first, a new allocation method for reactive power losses is presented and the contribution of each producer in reactive losses is calculated. In the next step, this share of losses is used to modify the mandatory generation region of units. Then, a new structure is proposed for the reactive power market. This novel structure leads to reduction of system costs in the deregulated power system, which is one of the main policy implications of this paper. Finally, simulations show that the total payment by Independent System Operator will be reduced via application of the proposed methods leading to reduction in system costs. This cost reduction will be significant enough to encourage Independent System Operators to utilize such a structure. In addition, by implementing the new proposed methods, assignment of costs related to reactive power loss will be more justifiable for each generator.
Coupled energy and reactive power market clearing considering power system security
Energy Conversion and Management, 2009
In a deregulated environment, when talking about electricity markets, one usually refers to energy market, paying less attention to the reactive power market. Active and reactive powers are, however, coupled through the AC power flow equations and branch loading limits as well as the synchronous generators capability curves. However, the sequential approach for energy and reactive power markets cannot present the optimal solution due to the interactions between these markets. For instance, clearing of the reactive power market can change active power dispatch (e.g. due to a change of transmission system losses and the capability curve limitation), which can lead to degradation of the energy market clearing point. This paper presents a coupled day ahead energy and reactive power market based on the pay-at-MCP settlement mechanism. Besides, the proposed coupled framework considers voltage stability and security issues and branch loading limits. The coupled market is cleared through optimal power flow (OPF). Its objective function includes total payment of generating units for their active power production along with the total payment function (TPF) of units for their reactive power compensation. Moreover, lost opportunity cost (LOC) of the units is also considered. The effectiveness of the proposed framework is examined on the IEEE 24 bus Reliability Test System.
EFFECT OF REACTIVE POWER VALUATION OF GENERATORS IN DEREGULATED ELECTRICITY MARKETS
In a deregulated electricity market, Independent System Operator (ISO) meet contracted transaction in secure manner for reactive power provision. It is differently done in deregulated electricity market of different countries .In the paper, a reactive power procurement market model is proposed along with reactive power valuation. Reactive power valuation is concerned with social and technical aspects of generators .It is discussed with IEEE-24 bus results.