Presenting a new structure of the active and reactive power market at the same time, taking into account the network voltage restrictions

Dissertation for Master's Degree in Power Electrical Engineering

Trend of Power Systems

Abstract:

During the last two decades, the electricity industry has undergone fundamental changes in the way of production, transmission and distribution, which is referred to as restructuring. With the restructuring in the electricity industry, reactive power has been introduced as one of the most important ancillary services for the safe and reliable operation of the power grid. In recent years, reactive power markets have been defined in order to increase the reliability of the network, create a correct competitive structure and encourage producers to produce reactive power. Meanwhile, active and reactive power are related in various ways, such as load spreading equations, synchronous generator capability curve, and maximum power capacity passing through the lines, and as a result, separate implementation of active and reactive power markets will not bring the optimal solution. Thus, in this thesis, the reactive power market is implemented simultaneously with the energy market, and its results are compared with the results obtained from the separate implementation of active and reactive power markets. In order to make the competition in reactive power production more fair, the price proposals for reactive power production will be modified and a new structure will be presented to reactive power producers to pay the lost cost. Also, considering the local nature of reactive power, the possibility of creating local reactive power markets is investigated and the results of the implementation of local reactive power markets are compared with non-local markets. On the other hand, the presence of scattered production sources, especially wind farms, in the power grid is increasing day by day, and with the advancement of technology in recent years, these sources are eager to participate in reactive power markets. Thus, in this thesis, in order to consider the participation of wind farms in the reactive power market, the possibility of providing reactive power by wind farms with variable speed turbine technology is studied first, and then the active and reactive power markets are implemented with the participation of wind farms. In this study, in order to consider the wind power forecasting error, active and reactive power markets are implemented with two error modes in wind power forecasting, and the effect of this forecasting error on the amount of participation of wind farms in the active and reactive power markets and also on the cost of operating these markets is examined.

Key words: reactive power market, active and reactive power simultaneous market, expected payment function, lost opportunity cost, farms Wind

Introduction

Over the past few decades, many electric power systems around the world have been restructured. During this period, in order to increase the operating efficiency and encourage investors, the electricity industry has undergone fundamental changes in terms of management and ownership, so that in order to create a suitable competitive environment, its various parts, including production, transmission and distribution, have become independent from each other. This process has led to the decentralization of various services that were previously produced by the monopoly structure. Although energy trading is the main issue in the competitive electricity market, in order to have a secure and reliable grid, ancillary services are critical and must be provided in an appropriate manner. In restructured power systems, the independent system operator (ISO[1]) is responsible for maintaining and operating the fair, safe and reliable power system. Accordingly, ISO is responsible for real-time load balancing, congestion management, and ancillary service provisioning. These ancillary services are provided by the system operator through commercial contracts with market participants [1].

Among these, six different types of ancillary services are defined in the FERC-888 Directive[2], which reactive power provision is one of these important services and should be considered in many aspects of market planning and operation. Another thing that should be considered is that a generator can sell its production power when there is enough reactive power to maintain the voltage levels in the acceptable range in the system. Otherwise, the generator will not be able to sell its produced energy due to the limitation of voltage stability [3]. As a result, while the main issue in electricity markets is financial issues, due to the important role of reactive power in security systems, technical issues should also be taken into consideration in market settlement along with economic issues.So far, various objectives such as reactive power pricing [4, 5], minimizing the cost of reactive power [6, 7], simultaneously minimizing the cost of reactive power and transmission losses [8, 9], minimizing the deviation from transactions [3], etc. have been presented to resolve the reactive power market and improve this market.

On the other hand, reactive power plays an important role in power system voltage security [10]. The lack of reactive power in the system may cause an undesirable voltage drop in some system buses, which if the system does not overcome this voltage deficiency, may lead to voltage instability in the entire network. Inadequate reactive power leading to voltage collapse is known to be the main cause of major power outages around the world. For example, the main cause of blackouts on July 2, 1996 and August 10, 1996, which occurred on the west coast of the United States, was declared to be voltage collapse [11]. Therefore, system voltage security is an important issue that should be considered in reactive power planning.

The presence of wind farms in restructured markets

In recent decades, due to some global challenges such as environmental issues, energy crisis and economic recession, renewable sources and distributed production have attracted more attention for electricity production [12]. Research conducted by research centers such as the Electric Energy Research Organization (EPRI [2]) indicates that more than 25% of the electrical energy produced by scattered productions will be used until 2010. Also, according to the research of the Natural Gas Organization (NGF [3]), this figure is predicted to be 30% [13]. Among the types of renewable resources, wind energy has become one of the advanced and popular renewable resources worldwide due to its availability and many advantages. With the increasing penetration of wind power generation into the grid, many new issues need to be studied about power system planning and operation.

Despite the great advantages of wind energy, this energy source has high uncertainty. Therefore, the random nature of wind speed has been the subject of many researches in recent years, and some different aspects of this phenomenon as well as its effects in the operation and control of power systems have been studied [14].

Providing reactive power by wind farms

In addition to providing active power to the grid, wind generators with electronic power converters can also provide reactive power to the system by combining minor changes in design or control architecture. These wind turbines ([4] WTs) can also be used to provide temporary primary frequency regulation and oscillation damping as mentioned in reference [15].

In various works, reactive power has been mainly investigated as an ancillary service in the field of large thermal generators, and not much work has been reported to investigate that wind generators can contribute to the reactive power required by the system [8] and [17]. Reactive power provision from wind farms (WFs[5]) is rarely purchased by independent system operators. However, with the increasing penetration of wind generators into the power grid along with the increased use of power electronics in turbines, wind farms can be useful as reactive power service providers in the future. Due to the progress in wind forecasting techniques in recent years, along with the power smoothing effect in a wind farm, wind farms can now be considered as a distributable power source by system operators. As a result, reactive power support from voltage source converters (VSCs [6]) from wind farms can also be considered distributable by operators [18]. This means that for all scarce services, compensation costs should be received by suppliers and paid by consumers. This is also true for reactive power. Vendors should be paid the market price or rate for the reactive power they supply so that shortages are avoided. Buyers must also pay the market rate or price.

Generally, currently in the restructured electricity markets, it has been recognized by several power system operators in different countries that the provision of reactive power should be considered as an ancillary service and there is a need for a suitable financial payment solution for these services.