Reactive Power Valuation

using
Voltage Sensitivity Analysis
Prof(Dr) S K Joshi, V S Tejwani, S U Dalvani,
M S University Vadodara (Gujarat)
vstkeya@yahoo.co.in

Abstract:
In the new deregulated and restructured electric utility industry, generation,
transmission and distribution have become different entities. It is therefore
necessary to separate costs of active and reactive powers for sustained
development of industry. In this paper, a cost based reactive power valuation
structure for a generator under deregulated conditions is presented. Various factors
affecting valuation or costing of reactive power support from generators are
analyzed. A mathematical model for reactive power pricing structure based on
various cost components is developed. Simulation is carried out on a model bus
system considering these typical generators as part of the system.

Index Terms-- Reactive Power Pricing, Voltage sensitivity, Deregulation.

Introduction
Recent years have seen a worldwide trend towards deregulation and
unbundling of services provided by utilities throughout the world, especially in
power market. This trend separates the traditional vertical-integrated power system
structure into generation, transmission and distribution independently companies.
And, the goal is always lowering of the average consumer price and introduction of
competition. While competition is introduced in generation and retail, it is widely
agreed that transmission network is a natural independent and monopoly.
Therefore, the transmission network company should remain neutrality and
centrally controlled to make the market is operating fairly.
With deregulation of electricity sector each electric power service should
be economically valued and the fair rules for evaluation and compensation should
be established. Reactive power service is one of the key ancillary services and the
trading in it is becoming a reality for deregulated electricity markets. This has
resulted in a need to quantify the value and to compensate the service of reactive
power support. The main question is how much reactive power is worth
economically. The first step in this investigation is to determine the technical value
of the reactive power, which later could be transferred into money-based value.
In this work we’ll try to determine some problems with reactive power .
For the investigation a simplified test system will be build. Fair method for
evaluating the reactive power will be established and checked on the test system.
Appropriate conclusions will be made.

1.1 Problems with reactive power

We’ll try to determine some most interesting problems with reactive power.

1.1.1 Reactive power exchange between Genco and Load

Reactive power is exchanged at many levels and points in the power system.
Both parties involved usually benefit from this exchange, but a fair compensation
must be defined based on the value of reactive power. This must be done in such a
way that the economical incentives support issues like system security and voltage
quality. Since both parties want to avoid additional investments, a better solution
should be sought for.

So there are several possible perspectives in this situation:

• The zero exchange in system transformers is enforced and each organization

covers its own costs for this;
• A value of reactive power extracted or supplied to the transmission grid
depending on load conditions, interconnection points location, strength of
the network and etc is defined, so that the reactive power is traded between
generator and load.
In this work using our test system we’ll try to answer the question is reactive
power flow in system transformer crucial to the system security and losses in the
area. What investments would be required from both sides for that purpose?

1.1.2 Reactive power exchange between distributed

generation and the network. Wind power stations
Reactive power problems usually occur at the interconnection points of
different systems or now in the deregulated market between different owners of
transmission or distribution networks, reactive power generators and consumers.
As reactive power is a local product its value to system security and voltage
control very much depends on the location in the system. The existence of
embedded generation can release capacity in a distribution or other network to
which it is connected. And any generation embedded on that network reduces the
likelihood of overloading and loss of supply, so improving the reliability of the
network.
Wind power stations are a common example of embedded generation. A
specific character of those power stations is that while generating the active power
they consume the reactive one. Combined with the generation level that varies with
the weather conditions, this causes voltage problems at the interconnection points
and the installment of compensation devices is required So the questions could be
how much the wind power station owner should compensate the network for
reactive power consumption? What about the positive factors wind power station
introduces to the network – load relieve and reliability? Reactive power evaluation
methods, established in this work, could be used in defining the value of reactive
power extracted by wind power stations too.

2. Questions to answer
Besides the problems with reactive power described above in this work we’ll try to
find the answers to the following questions:
• Which reactive power source is the most important to the system? What are
the criteria?
• How much MVar from other sources does this corresponds to?
• What does this MVar from one or other source do to system losses?
• What does this MVar mean to transfer capacity?
• How much does this MVar cost to install and to produce?

3. Reactive Power/Voltage control service

Reactive power/Voltage control service should satisfy System requirements listed
below (CIGRE report, 1999):
• Satisfy overall system and customer requirements for reactive energy on a
continuous basis;
• Maintain system voltages within acceptable limits;
• Provide a reserve to cover changed reactive requirements caused by
contingencies, against which the system is normally secured, and satisfy
certain quality criteria in relation to speed of response;
• Optimize system losses. In reactive power and voltage control a distinction
between three levels of voltage control could be made (UCTE report, 1999):
• Primary control is implemented by the voltage regulators of
generating units, which will initiate a rapid variation in the excitation of
generators when they detect a variation in voltage across their terminals.
 Other controllable devices, such as Static Var Compensators (SVCs) may
also be involved in primary regulation.
• Secondary control co-ordinates the action of voltage and reactive power
control devices within a given zone of the network in order to maintain the
requisite voltage level at a certain node point in the system.
• Tertiary control involves a process of optimization, using calculations based
upon real time measurements, in order to adjust the settings of devices,
which influence the distribution of reactive power (generating unit
controllers, tap transformer controllers and compensating devices, like
reactors and capacitors).
• Where the system load is high, the operator must be certain that, in case of a
loss of generation, the remaining facilities will be able to deliver enough
reactive power to keep the voltage within the required range. The same
applies to the converse situation, where the system load is low and reactive
power needs to be absorbed.

4. Reactive power valuation

For evaluation of source’s reactive power to system security and
voltage stability many methods can be used. In our investigation we’ll try the most
promising candidate. The high load case was tested.

Voltage Sensitivity (VS) based Method

Besides of ranking the system sources according to reactive power supply
capabilities, this method also answers the question: What does 1 MVar from one or
other source do to system losses?

We will try to set the value for the reactive power of all test system
generators in one case and for area1 reactive power sources in the other. That will
be two generators G1, G2 and reactive power input from the system transformers
Ts1 and Ts2. For this investigation we’ll use sensitivity analysis, which lets to find
different sensitivity values.

Voltages Sensitivities (VS) show the effect an additional injection of real or

reactive power at a bus has on real, reactive, or complex power flow on a particular
line or interface. Mathematically it is
is equation no 1
The numbers could be obtained from the Jacobian matrix of Newton Raphson of
Load Flow method.

Q and P losses sensitivities QLSGi and PLSGi of the generators have been
calculated as follows:  

is equation no 2.
This means that we find the sum how each generator contributes to the losses
sensitivities at load buses.

Using the data from the obtained as above we can find the cost based
marginal reactive power value (RPV) of every source in the system (J.B. Gil,
2000).

is equation no 3

f(CQGi) – generator’s active power losses as a function of produced reactive

power, MW/MVar;
VSGi – generator’s voltage sensitivity, MVar;
QLSGi, PLSGi – Q and P losses sensitivities, MW;
SP – active power spot price.

Generator’s active power losses as a function of produced reactive power

f(CQGi), can be found from the figures similar to the one in calculations. The
losses curve depends on the type and characteristics of generator.
5. Test system
In order to analyze this method, a test system has been designed.
5.1 Scheme
The test system scheme is represented as several parallel long 400 kV lines.
The scheme of the test system is shown in the figure below. The names used
in the
scheme have the following meanings:
G1, G2 – Area 1 generators;
Gs1, Gs2 - Area 2 generators;
D1, D2, D3 – 130 kV transmission lines;
Ds1, Ds2, Ds3, Ds4 – 400 kV transmission lines;
L1, L2, L3, L4 – Area1 loads;
Ts1, Ts2 – 400/130 kV system transformer

The Test System Model scheme

 Sensitivity values of generators and Loads using equation1

So for example an additional marginal load increase in 1 MVA at load bus

L1 requires generators capabilities of 1.511 MVar, as shown on the first column,
to keep the voltage constant. Generator G1 has the greatest influence in this case,
because it is the closest to the load L1.

Loss Sensitivities of the sources using equation 2

For example QLSG1 has been calculated as follows

 So generators G1 and G2 produce the highest marginal losses. It
depends on the network configuration and location of the source in the system.
Generator’s active power losses as a function of produced reactive power
f(CQGi), can be found from the figures similar to the one below. The losses curve
depends on the type and characteristics of generator.

The Example of Generator’s Active Power Losses as a function of

produced Reactive Power at rated MW output

This means that reactive power value of each generator is the sum of active
power losses, due to the marginal load change and generator respond to it,
multiplied by active power spot price in the system at that moment.

The same calculations can be done using the reactive power sources only in
a certain area, as in our test system only area1 with generators G1, G2 and power
flows in system transformers Ts1 and Ts2. This enables us know the value of
reactive power not only from the generators but also from one area to other.

So in our example area1 can get the value of reactive power injected from
area2 at the exchange point, system transformer, not taking care about the source it
is produced at. It also could be understood, that area2 is replaced by fictitious
generators, which supplies the reactive power and reacts to the load changes at the
areas’ interconnection points.
References
• Erche, M., Petersson, T. “Reactive Power Sources”. Task Force No 3.
CIGRE WG 38- 01. April 1987.
• “Exchange of services between large electricity generating plants and
high voltage electric power systems”. Joint Working Group 39/11.
CIGRE, April 1999.
• Gil, J.B., San Roman, T.G., Rios, J.J., Martin, P.S. ”Reactive Power
Pricing: a Conceptual Framework for Remuneration and Charging
Procedures”. IEEE Transactions on Power Systems, Vol. 15, No.2,
May 2000.
• Hao, S.H., Papalexopoulos, A. “Reactive Power Pricing and
Management “. IEEE Transactions on Power Systems, Vol. 12, No.1,
February 1997
• Kirby, B., Hirst, E. “Ancillary Service Details: Voltage Control”.
December 1997. Larsson, M. (2000) Coordinated Voltage Control in
Electric Power Systems.
• Doctoral dissertation, Department of Industrial Electrical Engineering
and Automation, Lund University Miller, T.J. (Editor) "Reactive
Power Control in Electric Systems". John Wiley & Sons, New York,
1982.
• “Reactive Power: Basics, Problems and Solutions”. IEEE Tutorial
course. 1987
Appendix: Test system model parameters
All the parameters used in the test system are listed in the tables below

Per Unit Base quantities

Line Parameters

Transformer Parameters

Generator Parameters

Load Parameters