Ancillary reactive power service allocation cost in deregulated markets: a methodology

This paper presents a methodology to allocate reactive power costs in deregulated markets. Reactive power supply service is decomposed into voltage regulation and reactive power spinning reserve. The proposed methodology is based on sensitivities and the postage-stamp method in order to allocate the total costs service among all participants. With the purpose of achieving this goal, the system operator identifies voltage support and/or reactive power requirements, and looks out for suitable providers. One case study is presented here to illustrate the methodology over a simplified southeastern Mexican grid.