Localized reactive power markets using the concept of voltage control areas

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. Index Terms--Ancillary services, deregulation, market design, reactive power, voltage-control areas.