Reactive Power Pricing: a proposal for the Italian Market

Voltage control and reactive power support have been deeply investigated by the technical point of view. System operators and planners have developed complex control schemes, in order to achieve a secure and efficient operation. After the enforcement of market structures, new issues have appeared. Nowadays, the main subjects related with the reactive power management are: maintaining an adequate security level, defining correct economic signals, providing a simple and transparent structure, ensuring market equity, and avoiding additional charges on the final energy price. The economic issues related to the transmission network (and to the system control) have to be managed separately from the real power generation and this results in the need for defining fair payments for participating to the voltage regulation. The evaluation of the costs of the reactive power demand and the benefits of the reactive power production can be performed by means of different methods: a brief summary of the approaches proposed in literature is reported, together with some results obtained by the use of a suitable Optimal Reactive Power Flow (ORPF), which embeds the Hierarchical Voltage Control (HVC) scheme designed for the Italian EHV transmission system. The results can be used for setting the presented proposal for the reactive power pricing.