Application of VEPSO Optimization Algorithm to Reactive Power Pricing in an Electricity Market

Abstract

Reactive power service is one of the most important ancillary services in electricity market that play important role in security and reliability of network. In the modern power systems, voltage stability analysis and evaluation of security margin is necessary for avoid of instability and voltage collapse phenomenon. Reactive power pricing in the competitive environment is important problem that with maintaining system security, provide the economic signal for investors to exploitation system. In this paper, the VEPSO algorithm is used to optimal pricing of reactive power. The presented model for calculation of the active and reactive power marginal prices of generators and capital cost of capacitors has been used an optimal power flow is based on VEPSO algorithm which the objective function minimizes the active and reactive power production cost. Test results show the reactive power production cost and the capital investment of capacitors should be considered in reactive power pricing for their noticeable impacts on reactive power marginal price. The approach presented provide a useful tool to answer the question whether to pay the reactive power charge or whether it is more profitable to make a capital investment in reactive compensation equipment. Simulation results show that effective performance of VEPSO algorithm in optimization of cost objective function of reactive power