Towards a Competitive Market for Reactive Power
TL;DR: In this paper, the design of a competitive market for reactive power ancillary services is presented, and the reactive power market is settled on uniform price auction, using a compromise programming approach based on a modified optimal power flow model.
Abstract: This paper presents the design of a competitive market for reactive power ancillary services. Generator reactive power capability characteristics are used to analyze the reactive power costs and subsequently to construct a bidding framework. The reactive power market is settled on uniform price auction, using a compromise programming approach based on a modified optimal power flow model. The paper examines market power issues in these markets and identifies locations where strategic market power advantages are present that need to be removed through investments in reactive power devices.
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TL;DR: In this paper, the authors examined the possibility of providing reactive power support to the grid from wind farms (WFs) as a part of the ancillary service provisions, and a generalized reactive power cost model was developed for wind turbine generators that can help the independent system operator (ISO) in managing the system and the grid efficiently.
Abstract: This paper examines the possibility of providing reactive power support to the grid from wind farms (WFs) as a part of the ancillary service provisions. Detailed analysis of the WF capability curve is carried out considering maximum hourly variation of wind power from the forecasted value. Different cost components are identified, and subsequently, a generalized reactive power cost model is developed for wind turbine generators that can help the independent system operator (ISO) in managing the system and the grid efficiently. Apart from the fixed cost and the cost of loss components, a new method is proposed to calculate the opportunity cost component for a WF considering hourly wind variations. The Cigre 32-bus test system is used to demonstrate a case study showing the implementation of the developed model in short-term system operations. A finding is that higher wind speed prediction errors (a site with high degree of wind fluctuations) may lead to increased payments to the WFs for this service, mainly due to the increased lost opportunity cost (LOC) component. In a demonstrated case, it is found that 2340 $/h is paid to the WF as the LOC payment only, when the wind prediction error is 0.5 per unit (p.u.), whereas 54 $/h is the expected total payment to the WF when the prediction error is 0.2 p.u. for its reactive power service.
227 citations
Cites background from "Towards a Competitive Market for Re..."
...A reactive power offer structure from generators in the deregulated market is presented in [30] and [31], where their offers represent different cost components associated with the reactive power service....
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TL;DR: In this article, a localized competitive market for reactive power ancillary services at the level of individual voltage control areas is proposed, where uniform prices for various components of reactive power service are obtained for each voltage-control area.
Abstract: In this paper, we present the design of a localized competitive market for reactive power ancillary services at the level of individual voltage-control areas. The concept of electrical distance has been used to identify the different voltage-control areas within a power system. The proposed reactive power market is settled on uniform price auction, using a modified optimal power-flow model. Uniform prices for various components of reactive power service are obtained for each voltage-control area. In the study cases described in the paper, we examine whether such a localized reactive power market is more desirable than a common system-wide reactive power market.
215 citations
Cites background from "Towards a Competitive Market for Re..."
...sake of continuity and convenience of the readers, we discuss in Section III-A the reactive power offer structure developed in [7] again....
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...Subsequently in [7] the authors presented a uniform price auction model to competitively determine the prices for different components of reactive power service, namely, availability, operating, and opportunity....
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...framework presented in [7]....
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...All market participants within a voltage-control area submit their offers to the ISO in terms of the four components as discussed in [7]....
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01 Jan 2008
TL;DR: In this article, the authors examined the possibility of providing reactive power support to the grid from wind farms (WFs) as a part of the ancillary service provisions, and a generalized reactive power cost model was developed for wind turbine generators that can help the independent system operator (ISO) in managing the system and the grid efficiently.
Abstract: This paper examines the possibility of providing reactive power support to the grid from wind farms (WFs) as a part of the ancillary service provisions. Detailed analysis of the WF capability curve is carried out considering maximum hourly variation of wind power from the forecasted value. Different cost components are identified, and subsequently, a generalized reactive power cost model is developed for wind turbine generators that can help the independent system operator (ISO) in managing the system and the grid efficiently. Apart from the fixed cost and the cost of loss components, a new method is proposed to calculate the opportunity cost component for a WF considering hourly wind variations. The Cigre 32-bus test system is used to demonstrate a case study showing the implementation of the developed model in short-term system operations. A finding is that higher wind speed prediction errors (a site with high degree of wind fluctuations) may lead to increased payments to the WFs for this service, mainly due to the increased lost opportunity cost (LOC) component. In a demonstrated case, it is found that 2340 $/h is paid to the WF as the LOC payment only, when the wind prediction error is 0.5 per unit (p.u.), whereas 54 $/h is the expected total payment to the WF when the prediction error is 0.2 p.u. for its reactive power service.
206 citations
TL;DR: In this paper, a stochastic multiobjective framework is proposed for day-ahead joint market clearing, which can concurrently optimize competing objective functions including augmented generation offer cost and security indices (overload index, voltage drop index, and voltage stability margin).
Abstract: In this paper, a stochastic multiobjective framework is proposed for day-ahead joint market clearing. The proposed multiobjective framework can concurrently optimize competing objective functions including augmented generation offer cost and security indices (overload index, voltage drop index, and voltage stability margin). Besides, system uncertainties including generating units and branches contingencies and load uncertainty are explicitly considered in the stochastic market clearing scheme. The solution methodology consists of two stages, which firstly, employs roulette wheel mechanism and Monte Carlo simulation (MCS) for random adaptive 24-h scenario generation wherein the stochastic multiobjective market clearing procedure is converted into its respective deterministic equivalents (scenarios). In the second stage, for each deterministic scenario, a multiobjective mathematical programming (MMP) formulation based on the epsiv -constrained approach is implemented for provision of spinning reserve (SR) and nonspinning reserve (NSR) as well as energy. The MMP formulation of the market clearing process is optimized while meeting AC power flow constraints and expected interruption cost (EIC). The IEEE 24-bus Reliability Test System (RTS 24-bus) is used to demonstrate the performance of the proposed method.
206 citations
Cites background or methods from "Towards a Competitive Market for Re..."
...It should be mentioned, however, that there is lot of work ongoing in the area of global optimization methods [41], [42], and improved techniques (or solvers with higher confidence levels) should appear in the literature in the coming years [40]....
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...The GAMS/DICOPT algorithm has built-in provisions to handle nonconvexities, and hence, we can, with a fair degree of confidence, rely on the GAMS/DICOPT optimal solutions to be globally optimal [39], [40]....
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Book•
06 Apr 2015TL;DR: In this paper, a rigorous exposition introduces essential techniques for formulating linear, second-order cone, and semidefinite programming approximations to the canonical optimal power flow problem, which lies at the heart of many different power system optimizations.
Abstract: Optimization is ubiquitous in power system engineering. Drawing on powerful, modern tools from convex optimization, this rigorous exposition introduces essential techniques for formulating linear, second-order cone, and semidefinite programming approximations to the canonical optimal power flow problem, which lies at the heart of many different power system optimizations. Convex models in each optimization class are then developed in parallel for a variety of practical applications like unit commitment, generation and transmission planning, and nodal pricing. Presenting classical approximations and modern convex relaxations side-by-side, and a selection of problems and worked examples, this is an invaluable resource for students and researchers from industry and academia in power systems, optimization, and control.
171 citations
References
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TL;DR: In this article, a reactive bid structure is proposed in the context of a reactive power market, based on the reactive power price offers and technical constraints involved in reactive power planning, a two-tier approach is developed to determine the most beneficial reactive power contracts for the ISO.
Abstract: This paper addresses the problem of reactive power procurement by an independent system operator (ISO) in deregulated electricity markets. A reactive bid structure is proposed in the context of a reactive power market. Based on the reactive power price offers and technical constraints involved in reactive power planning, a two-tier approach is developed to determine the most beneficial reactive power contracts for the ISO. The reactive capability of a generator and, therefore, the opportunity costs in providing reactive power is also included in the model. Uncertainty in reactive demand and in reactive bids of participating parties is incorporated through Monte Carlo simulations and the expected reactive power procurement plan for the ISO is hence determined. The CIGRE 32-bus network, approximately representing the Swedish system, is used for the studies.
317 citations
"Towards a Competitive Market for Re..." refers background or methods or result in this paper
...In an earlier paper by these authors [ 9 ], an approach to optimal contracting of reactive power services by the ISO was presented, using the maximization of a societal advantage function....
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...An offer price structure was developed in [ 9 ], which is modified in this work with a more realistic representation of the cost of loss component and the EPF....
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...For the sake of continuity, we discuss this issue along similar lines as in [ 9 ]....
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TL;DR: In this article, the technical and economic issues of determining reactive power pricing structures in an open-access environment are explored, and several cost allocation methods for valuing reactive power are presented.
Abstract: This paper explores the technical and economic issues of determining reactive power pricing structures in an open-access environment. It is believed that reactive power pricing and management under open-access will depend upon two important developments: (1) the functional unbundling of facilities that support the reactive power and voltage control service, and (2) grid rules to facilitate the coordination between generation and transmission systems for reliable system operation. The paper discusses the characteristics of reactive power that must be considered in order to develop a framework for reactive power pricing and management. Several cost allocation methods for valuing reactive power are presented. Two workable reactive power pricing structures are also proposed. The first is based on performance standards and the second is based on the local reactive power market concept.
275 citations
"Towards a Competitive Market for Re..." refers background in this paper
...However, as discussed in [ 8 ], these pricing instruments would only represent a portion of the true cost of the reactive power service—that associated with fuel costs of real power....
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...The market is assumed to be fairly perfect with rational participants [ 8 ]....
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...• A long-term contract-based reactive power market could prevent providers from exercising their market power and offer their reactive energy at higher prices than the cost of alternative reactive power generation [ 8 ]....
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TL;DR: In this article, a cost-based reactive power dispatch methodology is presented, which minimizes the total cost of reactive power support and determines the resultant reactive profile, and this cost is further expanded to include the pricing of reactive powers.
Abstract: The transfer of real power cannot be realized without reactive power/voltage support. However, compared with real power, the idea of reactive power costing and pricing is still not well defined. In this paper, the economic cost of reactive power is first analyzed. This cost includes the explicit and opportunity cost from various generation sources, such as generators, and the explicit cost from various transmission sources, such as reactive compensators, tap-changing transformers and the cost of transmission losses. Different from previous objectives functions, in this paper a cost-based reactive power dispatch is presented, which minimizes the total cost of reactive power support and determines the resultant reactive profile. This cost-based reactive power dispatch methodology provides information on the costing of reactive power and the information may be further expanded to include the pricing of reactive power.
261 citations
"Towards a Competitive Market for Re..." refers background in this paper
...A comprehensive analysis of these costs has been provided in [ 10 ]....
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TL;DR: In this paper, a theoretical approach based on marginal pricing is proposed in order to clarify the principles to remunerate the suppliers and to charge the consumers of these services, and a practical organization of reactive supply and voltage service markets is presented to be implemented in a competitive environment.
Abstract: A new electrical sector regulation is being implemented in different countries all over the world. The new regulation stresses the role of competitive markets for the procurement and remuneration of ancillary services. Among these services stand the ones associated with reactive power supply and transmission network voltage control in order to maintain the required system security levels. The object of this paper is twofold. On one hand, reactive power supply and voltage control services, which today are bundled, are decomposed in two types: (i) voltage profile management and reactive dispatch, and (ii) voltage regulation. A theoretical approach based on marginal pricing is proposed in order to clarify the principles to remunerate the suppliers and to charge the consumers of these services. On the other hand, a practical organization of reactive supply and voltage service markets is presented to be implemented in a competitive environment.
154 citations
"Towards a Competitive Market for Re..." refers background in this paper
...The power thus lost is a nonlinear function of reactive power [ 11 ]....
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07 Aug 2002
TL;DR: In this article, the management of reactive power services in deregulated electricity markets around the world is examined and several diverse methods for handling reactive power within the deregulated market framework emerges.
Abstract: With the restructuring of the electric power industry, operation and control strategies have undergone a shift in paradigm. Certain activities that were earlier considered as part of the integrated electricity supply (such as voltage and frequency control) are now treated as separate services and often independently managed and accounted for. This paper examines the management of reactive power services in deregulated electricity markets around the world. From the review several diverse methods for handling reactive power within the deregulated market framework emerges. While in many of the markets, proper financial compensation mechanisms exist to compensate the providers for their service, some others continue to handle reactive power through regulatory frameworks and technical operation guidelines.
84 citations