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Smart AVC is an important component of smart grid. This paper summarized the development situation of AVC in China and foreign countries, proposed the concept, objectives and characteristics of Smart AVC, and pointed out the direction of the current AVC developed to Smart AVC. Also, the paper proposed the following important tasks during the transitional period: adjustment of reactive power compensation layout in grid, increase in dynamic reactive power compensation installation and smart power plants, and construction of smart substation. Besides, the paper explained such as self-adapted, user-friendly interaction and self-healing functions and characteristics, and illustrated we should transform grid benefit growth way and make three indexes (voltage quality, line loss and voltage stability) simultaneously arrive at the best condition. At last, the paper showed the reactive power market is the driving force for construction of Smart AVC.

In this paper a combination strategy for reactive power optimization is proposed. It bases on the optimal reasult of Genetic-Simulated Annealing Algorithm and Primal-Dual Interior Point(PDIP) Algorithm, and solves the problem of discrete and continuous control variables in reactive power optimization effectively. Simultaneity, it introduces the soft costraint to handle the infeasibility problem appearing in the course of reactive power optimization. Numeriacal simulation results on the IEEE57 and the IEEE118 test system show that the proposed method can brings up the speed and the convergence of computation, and illustrate that the proposed method can effectively handle and detect the infeasibility problem caused by bottleneck constraints and get a reasonable solution fast.

At the view of reducing grid loss and improving power quality and relying on the practical operating condition of power system, the intelligent grouping arithmetic used in Capacitor Optimal Configuration Programming Decision is able to provide optimal compensation capacity of reactive power compensation and voltage regulation under various operating conditions. Aiming at current investment budget of reactive power compensation, an optimal disposition scheme of economic benefit is presented, at the view of investment return, to make sure to introduce the quickest recycling project of investment.

Reactive power optimization considering the load changing of the node in the system is also called as dynamic reactive power optimization. The paper presents a practical algorithm to solve the dynamic reactive power optimization based on the time-interval control, using the improved GA to optimize the discrete control variable and the predictor-corrector interior point method to the smooth control variable on the basis of traditional genetic algorithm. The IEEE-30 node system based on the forecasted load curve of some place is built to simulate the dynamic reactive power optimization. It is concluded that a greater loss reduction can be achieved by the proposed method and the optimal schedule is simple.

As a content of smart grid construction, the construction of smart automatic voltage control (Smart AVC) is also necessary. The Smart AVC (S10) of power grid, which can provide coordination control for the security, economy, and good quality of voltage, is used to analyze and calculate the online voltage reactive power optimization and carry out the closed loop control. The application of S10 system to Luzhou power grid makes the reactive power optimization of power grid more effective and the closed loop control more accurate and it reflects the advancement and practicability of Smart AVC and promotes the study and development of smart power grid.