PRICING REACTIVE POWER CONVEYANCE

The transmission of electrical power and reactive power from a seller to a buyer through a transmission network obviously has cost implications. The costs incurred are of interest to transmission system owners in view of the increased interest in deregulation in recent years. The paper provides a theory of an ideal conveyance rate based on marginal cost pricing theory. An analysis is made of the marginal cost of reactive transportation using a modification of the optimal power flow algorithm, followed by a case study illustrating the magnitudes and ranges that reactive transportation rates may take on under different circumstances. The ratio of marginal prices between real and reactive power conveyance shows that the costs of reactive power transport is of as much interest because of its impact on real power transport as in itself.