Methodology to remunerate the generation reserve and the reactive power support as ancillary services based on the benefit proportioned to the power system

This article presents a methodology to remunerate the ancillary services of generation reserve and reactive power support as function of the benefit provided by the generators to the power system. The benefit provided by the ancillary service of generation reserve is calculated based on the reduction in the expected energy not supplied, multiplied by the unitary interruption cost of the power supply. For the ancillary service of reactive power support, the benefit is obtained through the avoided installation cost of new reactive power sources. The Aumann-Shapley cost allocation method is used to distribute, in a fair and efficient way, the benefit among the generators that provide the ancillary services.