EXECUTIVE SUMMARY" S5 a* A" c' k! \' V, V
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This document is the final report of the PSERC project on “Costing and Pricing of AncillaryServices.” The project title reflects the original proposal that was prepared to examine several ofthe ancillary services associated with the various scenarios of a restructured industry. During thecourse of the project, the scope was reduced to issues associated only with reactive powersupport services. These services include the resources available to generators as well astransmission and distribution agents. The project tasks were:? Task 1. Investigate existing information that has appeared in the literature and EPRI projects. 6 M# ]' s4 ?0 X7 r? Task 2. Investigate the costs and value of reactive power and voltage support from a localview. Investigate nodal costs based on optimal power flow incremental costs for satisfyingreactive power demand and voltage constraints. Examine the significance of nodal costs forVARs.( ^- {* n( l: h" |0 d1 h6 y% j
? Task 3. Investigate constraints on generator operation due to VAR requirements as a cost tothe provider.4 j& l+ ^! r8 S7 W
? Task 4. Investigate the costs and value of reactive power and voltage support from a systemview. Examine the constraint of margin to voltage collapse and its sensitivity to reactivesources as a limitation to economic transfers. Examine the formulation of this as “congestioncharges” related to the limitations of transfers due to inadequate voltage support at either loador generation sites.: Z# d, c) s# @+ i$ ?3 V
? Task 5. Relate the economic value of reactive power controllers and reactive power sourcessuch as capacitor banks and generator excitation systems to their cost. 4 ?' C& F4 ~2 r* n8 k. B' wResults obtained for these tasks are presented in the report. As experience grows with alternativeelectric power market designs in the U.S. and abroad, new research questions emerge aboutancillary services in general and reactive power support service in particular. This reportaddresses fundamental relationships between costs, prices and physical provision of reactivepower. Therefore, research on the new questions will necessarily build on these fundamentalrelationships.7 p$ z6 H& _, Y4 q( L1 C! ?
The primary contributions of this project are in the areas of nodal pricing of reactive power,optimal VAR resource siting, cost determination including lost opportunity costs to generators,market power measurement, reactive power supply allocation, and the concept of spectralanalysis of reactive power dynamics. While this report summarizes the results of thesecontributions, additional details are included in the individual publications associated with thisproject. These publications are listed in the Bibliography of Project Publications.-%-86678-%-
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