OPF for reactive pricing studies on the NGC system

Retail transmission services like those being provided by the National Grid Company (NGC) in England and Wales pose new challenges for the pricing of reactive power supply. A reactive power market approach has been proposed by NGC and continues to be evaluated. Such an approach includes a novel requirement for transmission constrained economic dispatch of VAr, a problem in the security constrained optimal power flow (OPF) class. The problem formulations handled by the OPF package in use could not accommodate NGC's requirements. This paper describes the reactive pricing problem being addressed, the modeling requirements, and the resulting extensions made to the OPF formulation and package. It discusses the test results obtained to date on the NGC system.