Optimal VAr pricing and VAr placement using analytic hierarchical process

Abstract

This paper proposes a new method to study reactive power pricing and new VAr source selection using the analytic hierarchical process (AHP), and presents a price structure for providing reactive power service and control based on the OPF approach. The cost of reactive power support service is determined based on capability and contribution to improvement of system performance such as security, reliability and economics, by calculating sensitivity of objective function with respect to reactive power support. For VAr planning purpose, an analytic hierarchical process model is devised which comprehensively considers the network topology and all types of benefits including operating cost, system voltage and loss for each candidate VAr source site. The proposed approach for calculating VAr pricing and selecting the new VAr sources was tested on an IEEE 30-bus system. The calculation results are analyzed by the cost-benefit analysis (CBA) method.