A heuristic method to reactive power service procurement

This paper proposes a novel heuristic algorithm that helps alleviate the need for integer variables in a reactive power procurement model for an independent system operator in deregulated electricity markets. The heuristic scheme works on a three-step approach involving the calculation of marginal benefits and the maximization of a social welfare function that is dependent on the appropriate Lagrange multipliers pertaining to the generator´s capability curve. The proposed scheme reduces the computational burden significantly and makes it easy to implement in real sized power systems. The model is tested on the CIGRE 32-bus system, and detailed simulation results validate the applicability of the proposed model