A competitive reactive power service market in a hierarchical voltage control system

This paper presents a proposal for the reactive power service market consistent with the hierarchical voltage control. Each of the generators connected to the grid bids in the market based on a simple offer diagram that takes into account the generator capability curves and refers to real and main costs due to reactive power generation. The reactive power dispatching problem is reformulated since the reactive power market, besides a technical one (minimisation of transmission losses), introduces two additional objectives, one economical, minimising the ISO´s payment to generators which will be dispatched, one technical, introducing system security constraints, i.e. maximising the reactive power margins. The advantage of the proposed market structure is to involve all the generators connected to the transmission grid, allowing an improvement in the system security.