Reactive power pricing structure for hydroelectric power station in condenser mode operation

► Hydroelectric generators provide major reactive support in condenser mode operation. ► These units are to be remunerated under restructured conditions. ► A methodology for reactive power pricing structure is developed for these units. Reactive power support is critical for system security and pricing of reactive power is a vital issue in restructured environment. Peaking units at hydroelectric power plant in condenser mode operation can provide major reactive power support. Therefore costing structure for hydroelectric power plant incorporating various cost components in condenser mode operation is presented in this paper. Major cost components include capital cost component, changeover cost component and a cost component related to number of service hours in condenser mode operation. A methodology is proposed based on these components. A case study of Koyna Hydro Electric Power Plant (KHEPP) is elaborated.