Abstract
Power flow tracing based reactive power pricing scheme is presented in this paper. A method is suggested to solve the problem of bidirectional flow of reactive power. The reactive power allocated by each generator to all the load buses is found and the corresponding cost to be paid by the load to generator is calculated. Super position principle based method is used to calculate the allocation of reactive power by the generators to the loads. Costs allocated for generators are found using quadratic cost function. The method is implemented on IEEE standard bus system and the results are found satisfactory.
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