A conceptual structure for value based assessment of dynamic reactive power support in power markets

This paper presents a practical reactive power valuation method, for the purpose of the reactive power pricing, in which the VAr value is decomposed into two components. These components are basically different from those already employed in the literature. Using a security constrained optimization model, the proposed scheme allocates two specific amounts of MW transactions to each generator as a dynamic reactive power source. One of these allocated amounts represents the contribution of the VAr resource to the shipment of active power, while the other one represents the contribution to the protection of the system against voltage instability. The final VAr value is derived using the weighted sum of these associated components. Application of the proposed method has been illustrated using the IEEE 30-bus test system. The results of reactive power valuation for this sample network, in different operating conditions, are evaluated and discussed.