Exercising reactive market power through sensitivity studies and HHI

This paper addresses the problem of reactive power compensation in power systems according to local control actions. These control actions are determined using an optimal power flow as a tool of analysis. Two objective functions are considered: maximization of the system loadability and minimization of system loss. As a result, some areas in the system are recommended for reactive power compensation (shunt capacitor/reactor installation). These areas are further studied under the point of view of reactive market power, and the economical aspects of the results are evaluated. The IEEE-118 bus system is used to test the proposed methodology; as the reactive power control is a matter of concern, all operating limits are considered.