Multi-stage Model for Voltage Control and Reactive Power Ancillary Services Allocation Costs in Electricity Markets

This paper presents a three-stage model for voltage control and reactive power ancillary services allocation costs in re-structured electric sectors. At the first stage, the system operator (SO) determines the technical requirements of the service considering different scenarios for the next year's period, including contingency analysis; furthermore, at this stage, the SO calculates cap prices differentiated by type of generator. At the second stage, within a day in advance, and once that energy and frequency control service prices are known, the SO estimates the variable costs associated to the service by evaluating the contingencies required to apply a set of preventive reactive power and voltage control actions. The third stage consists of evaluating real variable costs, once these have been incurred, and added to the fixed costs to conform the total costs of the service. Total costs are allocated to consumers by two methodologies. The first methodology prorates costs in terms of sensitivities and load values for each consumer and for every evaluated scenario. The second methodology is based on sensitivities to determine reactive areas, such that total costs are divided by each scenario and reactive area, and prorated among the consumers of those reactive areas in terms of their load presented at each scenario.