Bus voltage sensitivity: an instrument for pricing voltage control service

The paper aims at quantifying voltage control/reactive support and apportioning the cost incurred to consumers in a physically-based manner. Voltage control/reactive support is basically an ancillary service which is strongly associated with the reliability of the network. In a restructured environment there is no built-in incentive to provide ancillary services as a part of energy sales. Therefore, any such service should be sought and paid for appropriately. This requires that a proper pricing scheme be devised which guarantees both technical and economic feasibility. In the proposed method, voltage sensitivity indices computed at various buses are used as weighting factors to price the voltage control service at the respective buses. A study illustrating the proposed method was carried out on a modified IEEE 30 bus system. The economic reasoning of the method is presented along with some suggested methods for determining the value of reactive power production costs.