Assessment of reactive power pricing by controlling generators´ voltage under deregulation

This paper presents the assessment schemes of reactive power pricing through generators´ voltage control under the assumption that a reactive power market is decomposed into a real power market. Applying the concept of economic dispatch to minimize the total cost of real power, the algorithm for implementing a reactive power pricing is proposed to determine the generators´ optimum voltage profiles. It consists of the reactive power-voltage equation, the objective function which minimizes the total cost of reactive power, and linear analysis of inequality constraints in relation to the voltages at the loads. From this algorithm, the total cost of the reactive power can be yielded to the minimum value within network constraints. It may provide the fair and reasonable price information for reactive power in deregulated electricity market. The proposed algorithm has been tested on the IEEE 14-bus system using MATLAB.