Costs of voltage security in electricity markets

As open access market principles are applied to power systems, an increased emphasis is being placed on determining ways to price different auxiliary services. The present paper studies the incorporation of voltage security into an optimal power flow formulation to analyze the aggregated costs associated with guaranteeing adequate voltage security levels in the system. Thus, several hybrid optimal power flow formulations that both minimize generation costs and maximize distance to collapse are proposed and used to compare operational costs of power systems at different loading and voltage security levels. Basic principles of electricity markets are then used to propose a method to determine appropriate adjustments of control parameters accounting for the voltage stability of a power network.