Reactive Power Pricing Based on FTR in the Deregulated Power Market

Today, with the movement of power systems towards competition and breaking the monopoly, the importance of ancillary services like reactive power and voltage control has increased. One of the most important services is power reactive service. Independent System Operator (ISO)has to provide reactive power in deregulated environments which are considered one of the six ancillary services of power system which should be provided by the ISO to improve system security. ISO is responsible to provide reactive power in deregulated environments. Purpose of this paper is to present a method for pricing reactive power. In this method, reactive power pricing is performed based on Financial Transmission Rights (FTRs). The novelty of this study is that it has offered a new method for pricing reactive power based on FTR. Reactive power pricing methods presented so far have not considered congestion costs of the transmission system but this method considers congestions costs also through considering FTR. In this paper, results of this method are evaluated on a standard IEEE-30 bus test system and compared with current pricing method used for pricing reactive power in Iran.