An Economic Based Approach for Optimal and Secure Reactive Power Provision in Deregulated Environments

In deregulated electricity markets, reactive power provision is one of the most important ancillary services which is vital for reliable and secure operation of the system. In all electricity markets, economic issues play an important role in market scheduling. This paper presents an algorithm to find optimal reactive power market schedule. The proposed algorithm seeks to minimize a novel three-component payment function which precisely considers economic issues in the market. Two first parts of this function are reactive power provision cost and transmission loss payment. Moreover, another important part of this payment function, which has not considered in the time of reactive power market clearing in literature, is transmission charge payment. As it is shown in simulation results, this term of the function can importantly impact on final reactive power market schedule and consequently on total market payment and final market schedule. Furthermore, due to significant impact of reactive power on system voltage stability, the algorithm tries to schedule reactive power market with an adequate voltage security margin. Sequential quadratic programming is employed to clear the algorithm which is a nonlinear constrained optimization problem. The proposed algorithm is applied on IEEE-24 bus test system with satisfactory results.