Study of bundling reactive power and transaction charges with generation cost in an interconnected power system

In deregulated power system operation, concepts of bundling the costs of reactive power generation and transmission line utilization on top of generation costs are finding increasing importance. A wide variety of approaches for accounting for the additional charges is proposed in the literature. The present thesis developed an integrated approach based on a new line voltage drop equation model that can account for different cost-structure scenarios.;A basic problem that affects bundling costs significantly is the appropriate scheduling of reactive power generation. Inadequate VAR support can lead to voltage stability problems resulting in undesirable outages. As part of the studies on bundling costs, the thesis proposed a new method for optimizing the reactive power generation schedule subject to voltage limit consideration. The optimization technique used the Genetic Algorithm (GA) methodology.;The problem of determining the bundled cost was formulated as a minimization problem with the attendant voltage and other limiting constraints. The Fmincon function for finding the minimum of constrained nonlinear function was used to solve the optimization problem. Various scenarios of cost structures and inter-area exchanges were studied using the IEEE 30-Bus system with three distinct ‘areas’. Detailed comparison of the costs and area interchanges led to conclusions useful for application in the deregulated environment.