Cost-effectiveness of distributed power quality compensation

Deregulation and restructuring of the electricity market will result in new business opportunities. A possible opportunity is to trade power quality services. An example of such a service is the delivery of nonactive power to compensate distorted currents. The power electronic converters of distributed generation systems can be used to provide nonactive power. However, the converter is normally designed for the maximum active power produced. Therefore, the converter has to be overdimensioned in order to provide nonactive power at maximum active power production. This leads to an increased initial cost of the converter. This paper provides a basis to evaluate the economical benefits of using these converters for compensation purposes.