A framework for PSS pricing as an ancillary service in a competitive electricity market

Abstract: This paper presents a new framework for the valuation of small signal stability as an ancillary service through Power System Stabilizers (PSSs). PSSs can improve small signal stability and simultaneously reduce the generation costs in a competitive market. This saving could be treated as a source to compensate the service provided by PSSs. This paper proposes an allocation approach to compensate the PSSs, proportional to their effectiveness in overall system small signal behavior. NSGA-II approach is used to solve the resulting multi objective optimization problem. A test system is used to represent the effectiveness of the proposed method. [Copyright &y& Elsevier]