A Cost Allocation and Pricing Method for Reactive Power Service in the New Deregulated Electricity Market Environment

It is necessary to restructure the reactive power pricing framework. The exchange of real energy is the dominant intention of the electric power exchange and the reactive power has its inherent limitation, but the importance and stimulation effect of a effective reactive power cost structure is important also, especially to the performance of the power market, the quality of electric power exchange and the security of the power system. All this tell us that reactive power should be treated as more than a subsidiary factor