A Comprehensive Market-based Scheme for VAR Management and Pricing in the Electricity Markets

E.E. El-Araby (Saudi Arabia)


Deregulation, VAR market, voltage security, PSO.


The present paper proposes an integrated market-based approach for pricing VAR service in the electricity market. The structure of the market composed of VAR capacity and VAR utilization during system possible transition states. The possible transition states considered here are multiple base cases and contingencies with their associated occurrence probabilities. The market is based on a long-term contract, where the successful candidates will be remunerated for the provision of VAR capacity as well as VAR utilization during the contracted period. The problem is stated as a minimization problem so that financial and technical issues, emphasizing voltage security issue, are regarded explicitly in a unified single formulation.

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