Assessment of the Economic Benefits from Reactive Power Compensation

Conference · Sun Jan 01 00:00:00 EST 2006

DOI:https://doi.org/10.1109/PSCE.2006.296180· OSTI ID:1003674

Li, Fangxing ^[1]; Kueck, John D ^[1]; Rizy, D Tom ^[1]; Tolbert, Leon M ^[1]; Zhang, Wenjuan ^[1]

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1. ORNL

The U.S. power industry is under great pressure to provide reactive power or Var support. Although it is generally known that there are technical benefits for utilities and industrial customers to provide local reactive power support, a thorough quantitative investigation of the economic benefit is greatly needed. This paper seeks to provide a quantitative approach to evaluate the benefits from local reactive power compensation. This paper investigates the benefits including reduced losses, shifting reactive power flow to real power flow, and increased transfer capability. These benefits are illustrated with a simple two-bus model and then presented with a more complicated model using Optimal Power Flow. Tests are conducted on a system with seven buses in two areas. These simulations show that the economic benefits can be significant, if compared with capacity payment to central generators or power factor penalties applied to utilities. This economic value may give utilities a better understanding of the Var benefits to assist their cost-benefit analysis for Var compensation. In addition, since the economic benefits are significant, this paper suggests that the future reactive power market should consider local Var providers.

• Research Organization: Oak Ridge National Laboratory (ORNL), Oak Ridge, TN (United States). Cooling, Heating and Power Integration Laboratory; Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States). Power Electronics and Electric Machinery Research Facility
• Sponsoring Organization: OE USDOE - Office of Electric Transmission and Distribution
• DOE Contract Number: AC05-00OR22725
• OSTI ID: 1003674
• Resource Relation: Conference: IEEE Power Systems Conference and Expo (PSCE) 2006, Atlanta, GA, USA, 20061030, 20061101
• Country of Publication: United States
• Language: English