Reactive Power Pricing in Restructured Power Markets

Electricity industry is undergoing a restructuring process, moving from integrated environment towards deregulation and reduced regulation all around the world. The expectation is that a market structure of the electric power will encourage competition in generation and supply, with open transmission and distribution access. This process will finally lead to technical as well as economical efficiency, and reduced prices. The increasing competition in electricity markets makes it urgent to develop a practical pricing structure, which is necessary both financially and operationally. Correct price signals will facilitate transmission access and improve economic efficiency. With the proper costing and pricing of reactive power, transmission users will have the ability to make intelligent decisions with regard to economic activities such as energy transactions, investments, and asset utilisation. The efficiency and reliability of system operation will be improved when well-balanced reactive power resources are available to support the transmission network. This paper focuses on a reactive power pricing mechanism considering VAr support procurement. Case studies show the effectiveness of the proposed approach.

Reactive Power Pricing in Restructured Power Markets Keywords:

Reactive Power , Pricing & Management , Restructuring , Deregulation