Reactive power management in deregulated electricity markets-a review

With the restructuring of the electric power industry, operation and control strategies have undergone a shift in paradigm. Certain activities that were earlier considered as part of the integrated electricity supply (such as voltage and frequency control) are now treated as separate services and often independently managed and accounted for. This paper examines the management of reactive power services in deregulated electricity markets around the world. From the review several diverse methods for handling reactive power within the deregulated market framework emerges. While in many of the markets, proper financial compensation mechanisms exist to compensate the providers for their service, some others continue to handle reactive power through regulatory frameworks and technical operation guidelines.