Reactive power dispatch and its pricing in re-structured electricity markets

This paper proposes a novel method of reactive power management and pricing in the background of re-structured electricity market. Financial compensation for reactive power support provided by the generators is considered in this paper. Those generators which have re-scheduled its real power generation to provide more reactive power are eligible for payment. The system operator has to find the optimum re-scheduling and minimum payment. This procedure is illustrated using 6 bus system and IEEE 30 bus system. The results show that cost of reactive power is optimum for the given conditions.