Optimal procurement of VAR ancillary service in the electricity market considering voltage security

This paper presents a competitive bidding scheme for procuring VAR service in the electricity market with the consideration of voltage security in normal and post-contingency states. To determine the most beneficial VAR contracts that satisfy the required level of system security and ensure adequate payment for the VAR service, an optimization problem that simultaneously minimizes the total payment of the procured VAR and operating costs in all transition states while maintaining a set of physical constraints including voltage security margin is developed. The global solution of the proposed formulation is obtained using a hybrid genetic algorithms/successive linear programming (GA/SLP) method.