Multiobjective design of distributed reactive power production in a deregulated electric market

Reactive flows compensation optimal design for losses reduction in MV automated distribution systems is a problem deeply studied in literature. In this paper, the design problem is formulated considering the new deregulated energy market. These new operational conditions allow the MV grid operator to consider the generation of reactive energy also as a service that can be sold to the transmission system above. In this case, the transmission system would be helped in all the working conditions in which a strong modulation of the reactive flow through the HV/MV node is required. Then, for the MV grid operator, the compensation system optimal design problem is therefore that of the search for the configuration (number, location and rated power of the capacitor banks) attaining the following main objectives: (i) to minimise power losses; (ii) to maximise the return on investment for the compensation system. Since results are strongly influenced by the parameter 'economic value given to the reactive power', RPEV, flowing from the MV network through the HV node, the optimisation problem has been parameterised for different values of RPEV and the total installed reactive power has been observed. A threshold value of this parameter has been identified. For values greater than the threshold, the proposed investment is economically profitable for the distribution grid operator, DGO. (C) 2004 Elsevier Ltd. All rights reserved.