Ancillary service details: Voltage control

Abstract

Voltage control is accomplished by managing reactive power on an alternating-current power system. Reactive power can be produced and absorbed by both generation and transmission equipment. Reactive-power devices differ substantially in the magnitude and speed of response and in their capital costs. System operators, transmission owners, generators, customers, power marketers, and government regulators need to pay close attention to voltage control as they restructure the U.S. electricity industry. Voltage control can affect reliability and commerce in three ways: (1) Voltages must be maintained within an acceptable range for both customer and power-system equipment to function properly. (2) The movement of reactive power consumes transmission resources, which limits the ability to move real power and worsens congestion. (3) The movement of reactive power results in real-power losses. When generators are required to supply excessive amounts of reactive power, their real-power production must be curtailed. These opportunity costs are not currently compensated for in most regions. Current tariffs are based on embedded costs. These embedded-cost tariffs average about $0.51/MWh, equivalent to $1.5 billion annually for the United States as a whole. Although this cost is low when compared with the cost of energy, it still aggregates to a significant amount of money. This report takes a basic look at why the power system requires reactive power (an appendix explains the fundamentals of real and reactive power). The report then examines the various types of generation and transmission resources used to supply reactive power and to control voltage. Finally it discusses how these resources are deployed and paid for in several reliability regions around the country. As the U.S. electricity industry is restructured, the generation, transmission, and system-control equipment and functions that maintain voltages within the appropriate ranges are being deintegrated.