Using Tracing Method for Calculation and Allocation of Reactive Power Cost

Conventional methods of determining and allocating of reactive power costs which are based on power factor, do not provide an accurate method to consumers reactive power pricing. While support for ensuring proper and continuous reactive power is needed to generate sufficient incentives to generate reactive power. To motivate participates, it is needed to create an economic structure of reactive power. In this paper, a method for determining the cost of reactive power is presented considering direct and indirect costs in generating and transmission. The developed tracing method for allocating reactive power cost is introduced. Simulation results in the IEEE 30-bus test system are considered to test and validate the proposed method. The methodologies, results and discussion presented in this paper show that the presented method is practical and has reasonable speed for determination and allocating reactive power cost.