Pricing framework for reactive power as ancillary service

In restructured power market several ancillary services are developed for maintaining the secure operation of power system. The voltage stability is one of the major criteria for preserving system security. Structure of Competitive market for reactive power estimation is rising in recent trends. The reactive power is very essential for maintaining the voltage profile in transmission line. Thus the reactive power pricing and its estimation importance is focused in this paper. Here the cost function of reactive power is developed and calculated most accurately based on generator as reactive power source. This cost function for the generator is modified in some prescribed manner and it is implemented using optimal power flow in MATLAB. The proposed method is realized in IEEE 9 bus and IEEE 30-bus system. Thus it provides good support for the generator bidders and consumers for the accurate well deserved contracts with the use of calibrated reactive power pricing.