Real-time pricing of reactive power based on reactive power value

The problems of reactive power value and reactive power pricing are discussed. Technology value of reactive power and economy value of reactive power are presented. From the viewpoint of technology value of reactive power, reactive power value evaluation based on power flow is proposed, which reflects the relation between output of reactive power of generator and the variation of system voltage directly. The model for price reactive power is established, where the OPF method is adopted with the objective function to minimize the sum of reactive and active power cost, and the reactive power value is considered and the opportunity cost is used as reactive power cost. The method is tested by IEEE14-bus system, and the results indicate that the proposed pricing mechanism can make the reactive power price increased 38.1 % at least while the total cost of reactive power and active power, P loss and Q loss, and active power price are almost unchanged compared with the situation that the reactive power value unconsidered. It can be expected to urge the reactive power compensated locally and to encourage the market members to serve for system security actively.