Analysis of Var benefits with application to Var planning

This paper will first discuss the quantitative economic benefits from reactive power (Var) compensation. The benefits can be categorized as reduced losses (B
₁
), exchanging reactive power flow to real power flow (B
₂
), and increased transfer capability (B
₃
). Then, the benefits in the three categories are applied to Var planning considering different locations and amounts of Var compensation. The study on Var planning presented in this paper is a straightforward, two-step approach: 1) it utilizes an Optimal Power Flow (OPF) model to update the Total Transfer Capability (TTC) in order to give a more accurate evaluation of Var benefits; 2) it then performs three OPFs for each Var location and amount combination to evaluate the Var benefits in three categories. Although this approach may be time- consuming, it does give a full spectrum and insightful information about the benefits under different categories if a Var compensator is installed at a specific location in various amounts. Hence, the sensitivity of economic benefits under different categories will be easily obtained. This approach may be used for future researches for benchmarking. It is also interesting to observe that the test results from a seven-bus system in this paper shows that it is not always economically efficient if Var compensation increases continuously.