Pricing of reactive power service

Reactive power service is one of the most important ancillary services in electricity market. In this article the combined reactive power market model is proposed, encompassed with regulated financial compensation of the costs for reactive power sources and value-based reactive power pricing. The methodology of calculation of costs of generators, synchronous condensers and static reactive power sources for economical evaluation of reactive power service was created. In the investigational part the reactive power market model was applied for Lithuanian power system to determine the amount of compensation for reactive power sources.