Value- Based Real Time Reactive Power Pricing Model Considering Voltage Security and Reserve Requirement

Reactive power service is considered as an important ancillary service, due to its contribution towards maintaining system wide bus voltage. In this work, a value based reactive power pricing model suitable for real time market is proposed. In the proposed reactive power market model, bids(operation cost and lost opportunity cost(LOC) of reactive power) are received from the Generating Companies (GENCOs) participating in the real time market. From the bids received, a three component reactive power value function is formulated. The components of value function being load serving component, voltage support component and reserve component of reactive power requirement in the system. The objective of the Independent System Operator (ISO) is to minimise the value function of reactive power requirement in the system subject to generator limits, bus voltage limits and transmission line limits. From the Lagrange function of the optimisation problem, the marginal value (MV) of reactive power is derived to calculate the marginal price (MP) of reactive power. The NLP formulation of the market model is solved using DICOPT solver in GAMS and anlaysed on IEEE 24-Bus system. The simulation results prove that the proposed algorithm is efficient in clearing the reactive power market in such a way that the system wide bus voltage deviation is minimal and sufficient reactive power reserve is maintained in the network.