A comprehensive survey on reactive power ancillary service markets

Modern power system is moving towards a smart and competitive grid, with competing generating companies, power retailers, and strategically behaving consumers playing a crucial role in the daily operation of the system. Independent System Operator (ISO) monitors these daily operations and procure required services through market operations. Active and reactive power pricing in real-time at the wholesale and retail level is considered an efficient energy management method. However, procurement of reactive power through a market mechanism in real-time is not being implemented, despite its crucial role in maintaining system parameters within the permissible limits. This paper attempts to detail the challenges faced in implementing such reactive power markets and presents a review of existing reactive power market mechanisms to address these challenges. A framework suitable for reactive power ancillary service in a smart grid is also detailed in this paper.

Automated summary

Modern power systems are becoming smarter and more competitive, with real-time pricing of active and reactive power considered an efficient energy management method. However, the procurement of reactive power through market mechanisms in real-time has not yet been implemented. This paper details the challenges faced in implementing reactive power markets and presents a review of existing mechanisms to address these challenges, as well as a framework for reactive power ancillary service in a smart grid.