Inclusion of short-run marginal costs associated with reactive power into a probabilistic transmission costing methodology

The paper presents a methodology for the determination of short-run marginal costs (SRMC) associated with reactive power. The method is included into a previously developed probabilistic transmission costing methodology based on active power short-run marginal costing. Monte Carlo techniques are applied to take into account uncertainties associated with demand, generation availability and generation fuel cost. The determination of reactive power SRMC is based on the results obtained by the real power dispatch in the determination of active power SRMC. But instead of determining coupled active and reactive power costs, the two quantities are treated separately. The provision with reactive power and reactive energy with regard to voltage control is looked at as a separate service