ALLOCATION OF VAR SUPPORT CONTRACTS IN A COMPETITIVE ENVIRONMENT
D. Pudjianto', G. Strbac', S Ahmed2,K. Bell and P. Turner'
'UMIST, UK
qational Grid Company, UK
Power Technology, UK
INTRODUCTION
The function of transmission in a power system is cen-
tred on the fundamental requirements of providing
efficient transport of electrical energy from large gen-
erators to demand centres, while maintaining required
standards of security and quality of supply. Among
other requirements, these standards specify the permit-
ted voltage fluctuations under both normal and contin-
gent conditions. In order to efficiently maintain the
required level of voltage regulation, an adequate man-
agement of reactive power is essential.
In addition to the vital role of system security, voltage
control strategies and reactive power management have
significant impact on both capital expenditure and sys-
tem operating costs, affecting the total costs of electric-
ity seen by the end customers. Reactive power support
and reserve are extremely critical for efficient use of the
existing transmission capacity, because the system may
become voltage limited if the reactive loading is not
managed appropriately, and this could lead to &der-
utilisation of capital investments. Simultaneously, in-
adequate reactive support would inevitably cause addi-
tional operating costs; such as voltage constraints re-
quiring increased out-of-merit generation and an ac-
companied increase in active power losses. On the other
hand, excessive reactive support would expose the users
of the transmission system to an increase in prices for
using the system due to an unnecessary increase in the
corresponding capital expenditure or costs of reactive
support
There will be a need for a margin of reactive reserve to
be held on a number generators and other dynamic
reactive compensation plant. These reactive reserves are
maintained primarily to provide additional reactive
power in the event of outages. For instance, with the
loss of a transmission circuit, the network configuration
changes resulting in an increase in system impedance,
which in turn increases reactive demand. This increase
is supplied from reactive reserves. System operation
must therefore, ensure that sufficient reactive reserve is
held for all credible contingencies. Due to localised
requirement of reactive support, these reserves must be
appropriately distributed across the network.
In a competitive environment, in order to ensure ade-
quate voltage profiles under both normal and contingent
conditions, the system operator is required to balance (i)
the cost of reactive power support offered by the gen-
396
erators, (ii) the cost associated with re-dispatching ac-
tive generation to meet voltage constraints and (iii) the
cost of investment into additional compensating plant
such that the total operational and investment cost is
minimised [l].
This paper uses a newly developed sensitivity analysis
based security constrained optimal power flow (SA-
SCOPF) to calculate the optimal amount of VAr support
that needs to be committed while fully exploiting the
available control capabilities of the system. The optimal
portfolio of reactive contracts to be accepted should be
adequate to maintain system security and quality of
supply across a number of loading conditions while
taking into account credible contingences.
In contrast to work presented in [2] that focuses exclu-
sively VAR aspects of voltage control, this paper
stresses the importance of coupling of active power re-
dispatch and reactive support [3]. It is well known that
active power dispatch affects the system reactive power
requirement, particularly when the system is heavily
loaded, active and reactive powers become strongly
coupled. Furthermore, generators' availability to pro-
vide reactive power depends on their active output.
Decomposition technique adopted by SA-SCOPF to
solve such a large and complex problem and the model-
ling of generator loading capability charts are presented
in this paper. Case studies on the modified IEEE 24 bus
system and the real England and Wales 1092 bus sys-
tem demonstrate the validity of the developed SA-
SCOPF.
PROBLEM FORMULATION
The minimum overall annual cost associated with volt-
age control is composed of (i) out of merit generation
cost, (ii) cost of VAr support contracts (capability and
utilisation) and (iii) annuitised investment cost of new
VARs. This is modelled as a multi-level security con-
strained Optimal Power Flow problem, formulated as
follows (the variables typed in bold are vectors):
mi.n
P,Q,k,k,x
Y = ~ : Q E+ ~ T Q ;+ FTQE + F ~ Q +?
NT ( 1)
Power System Management and Control, 17-19April 2002
Conference Publication No. 488 0 IEE 2002
 As the number of hours T O spent in the intact network
is much higher then zJzo in the 'contingent condition,
for simplicity it is considered zjg0 =O.

In the objective function (l), Cc,

C, , E , , F r ,Cc ,C,, C, , C D denote the offered an-
nual capacity prices for offered (existing) reactive
power generatiodabsorption (f/MVAr.year), the annual
capacity investment prices for potential (new) reactive
power generation labsorption (f/MVAr.year), the of-
fered prices for utilisation of reactive energy genera-
tionlabsorption within the offered capacity (EMVArh),
and the offered prices to increase or decrease the active
power output from initial dispatch (f/MWh) respec-
tively.

The primary objective is to allocate VARs among the

existing generators ( Q ,Q: ), whde re-dispatchmg
generators when appropriate and, where necessary, to
install additional ones ( Q,", a,").
Equations (2) and (3) represent the nodal active and reac-
tive power balance equations in each of the system states.
In the above model, the abbreviations used have the In the above model, Equation (4) and ( 5 ) enforce the
following meaning:
c : Reactive generation limits on the corrective ( k_d ) and preventive ( E l ) control
r : Reactive absorption variables respectively. These include the taps of OLTC
g : Generator (On load tap changing) transformers, shunts, phase shift-
d : Load(demand) ers and even SVCs. The generators' set voltages are con-
i? : Load level (demand period) sidered fixed at their pre-specified values. The adjustment
e : Existing sources of reactive power supplied by generators is achieved
p : Potential sources through changing the generator transformer taps.
E : Existingmaximum
j : Label of an operating state The limits on the state variables are enforced by Equation
NG : Total number of generators (6). Equation (7) ensures that the thermal limit of every
NS : Total number of contingent states (intact branches not being violated. in Equation (8) repre-
system: j=O)
NP : Total number of load levels sent the summation of Qi,!
and ai,!. Potential reac-
w : Objective function tive supports and SVCs are modelled as synchronous
Q : Reactive power injection
condensers.
P : Active power injection
I : Increment of active power dispatch Equation (9) calculates the movement of current active
D : Decrement of active power dispatch power dspatch fiom the initial (selr) dispatch. Equation
x : State variables(vo1tage V and phase angles e) (10) ensures that the amount of increment and decrement
kj : Control variables adjusted in corrective mode of active power are balanced. Active power re-
dispatching may change the total active power generation
-
in system state j at load level e requirement due to the changes in system losses, however
k, : Control variables adjusted in preventive th~seffect is not taken into account in the presented for-
mode at load level e mulation.

T! : Number of hours reactive energy is utilised in

SOLUTION ALGORITHM
intact network.
In this paper a two-stage decomposition scheme shown in
Figure 1 is proposed and implemented to solve the above
optimisation problem. At the Master level, a proposal,

397
comprishg a portfolio of reactive support contracts to
be purchased, the settings of preventive controls as well
as the preventive generation active power dispatch for
each loading condition, is made.
dispatch, a reactive capacity layout ( QE ,Q; ,QK ,Qf)),
-j
including proposed settings of preventive controls ( k e )
for each loading condition.

The feasibility of the proposal is evaluated at the Slave
level (second stage). For each contingent state at each
load condition (demand level), this assessment carried
out using an advanced non-linear programming based
optimal power flow (OPF).
This single state OPF problem can be formulated with
the objective function as follows:
Objective:

power commitment and demand

c:r,Q,J + CTr,Q,,
subject to the satisfaction of power balance constraints,
Decision Evaluation: Equations (2,3) and the feasibility of the operational
Level constraints, Equations (4-7). It is important to note that
for each demand level preventive controls, including
Decision Evaluation: preventive active power dispatch, are optimised by the
constraints decision-making sub-problem, and are hence kept con-
I ' ' - 1 stant at the decision evaluation level. On the other hand,
Decision Evaluation: corrective controls are optimised for each system state
Load State 0 Selection of specifically.
severely
Level
violated
NP Decision Evaluation:
State NS constraints QE ,Qt ,QE ,andQr represent additional capacity of
reactive generation and absorption from existing and
potential (fictitious) sources respectively, necessary to
Figure 1 Two-stage solution algorithm of Multi-level enforce the feasibility of the system. Constraints,
SA-SCOPF Equations (15-18) , are included in the decision
evaluation sub-problem.
In contrast to the conventional sensitivity analysis based
decomposition, the developed algorithm directly en- -Q: -Qf) -Q: -Qr SQL,! SQZ +QE +QZ + Q g
forces the satisfaction of the constraints in the decision ( 15)
evaluation sub-problem (discussed further in the next
O S Q ;S Q F - Q : ( 16)
section).
O S Q ; I Q : -Q; ( 17)
For each individual system state studied, the sensitivi-
ties of violated voltages and flows as well as reactive
Q: 2 0 ;Qr 20 ( 18)
power injection at voltage-controlled buses with respect
This optimisation problem is solved through an ad-
to reactive power injection at non-controlled buses
vanced non-linear primal dual interior point method
including preventive controls are calculated. After se-
developed on the basis of work published in [4,5].
lecting the most severely violated constraints from the
decision evaluation problem, for each individual load
DECISION MAKING SUB PROBLEM
level, a new set of constraints is formed and fed back to
the Master problem. The new solution, the improvement
Proposal for VARs support contracts, VAr reinforce-
of the Master's proposal, is then created. The Master-
ment required and preventive control settings are cre-
Slave interaction process continues until the VAR sup-
ated at the Master level (Figure 1). This optimisation
port contract portfolio purchased (andor new VAr re-
problem takes the following form:
sources installed), in coordination with settings of pre-
ventive controls including active power generation Objective
dispatch, is such that the system security requirements
are satisfied.

DECISION EVALUATION SUB-PROBLEM

The decision evaluation sub-problem represents a feasi-

bility assessment of the proposed VAr support con- Subject to
tracts, given through a preventive active generation

398
 Nodal violated v,oltage constraints for non voltage
controlled buses: lar load level). Vectors - refer to the sensitivity
au e
=(Pt,Qi,,Ep 1 ( 20)
coefficients of the reactive power output with respect to
av; the control variables. Note that constraints in Equation
Vmin 5 V p ) +-(Ue - u y ) s Vmax (21) (22) are the linear approximations of the constraints in
h e Equation (8).
Reactive power constraints for voltage controlled
buses: After selecting the states with most severely violated
- Q F , e -Q! 'Q,e j(0) + constraints from each individual load level, the con-
straints in Equation (21)-(23) are formed. These con-
straints are brought back from decision evaluation to the
decision making sub-problem, whch improves the
decision to satisfy all constraints. The improved deci-
MVA constraints (demand level and system state
specific): sions (QE ,Q,",QF , Q! and k e ) are then fed to the
decision evaluation sub-problems, the feasibility check-
ers.
Active power re-dispatch constraints MODELLING GENERATOR LOADING CAPA-
Pe -P: - 1 p +De = O ( 24) BILITY CHART
NG
C(Pi,!-PIT]() =o ( 25)
i =1
idack

ue represent the vectors of control variables to be op-
timised and comprises of vectors of active power dis-
patch, reactive injections at non-voltage control buses
(QJ
gx
) and positions of preventive controls for each
loading condition.
Constraints (2 1) are formed for each load level from the
states with most severely violated voltages, indicated by
the presence of new reactive reinforcement. Vi repre-
sents the vectors of voltages at voltage optimised buses
with subscript j and .! being referred to the severely
av{
violated system state and load level. -refers to the
he
vectors of sensitivity coefficients of the bus voltage
magnitudes at demand level .!in j-th system state to the
control variables.
Constraints in Equation (22) are formed for the voltage-
controlled buses for each load level. Vectors of reactive
power outputs ( C& ) at voltage-controlled buses (sub-
script j refer to the state with most severely violated
reactive constraint, while l? corresponds to the particu-
Figure 2 Generator loading capability chart
Figure 2 illustrates the piece wise linear approximation
of the generator loading capability chart. The chart is
broken down into several linear segments. If the number
of breakpoints is n, than number of segments n-1. P, to
P, denote the possible range of active power production.
Outside that range, generator may not be stable or could
E
be overloaded.Q,",,I QEl andQEn I Qr,nrepresent
the maximum reactive power generation I absorption
when generator produces active power at minimum and
maximum level respectively. Increasing the number of
segments will make the approximation closer to the real
one. However, the optimisation problem becomes more
complex and more difficult to solve since the number of
integer variables increases. In practice, a trapezoidal
form may be sufficient.
Constraints (29 - 37) are added into the decision-
making problem to include generation loading capabil-
ity chart constraint.
Pe -a:P1 -a:P2 - .........-a;€', =P~(y'-l) (29)
a:,! -.:a:,, -.:a:,, ---afQF,n <Q;,~(Y' -1) (30)

399

CASE STUDIES
Case studies on the modified IEEE 24 bus system and
the real England and Wales 1092 bus system demon-
strate the validity of the developed SA-SCOPF.
The need to re-dispatch active power in order to provide
necessary reactive power reserve, considering the gen-
erator loading capability chart constraints, is demon-
strated on the modified IEEE RTS system, while the
balancing of out-of-merit order generation cost against
VAR investment is shown on the England and Wales
system.
Inserting a generator transformer between each of the
generators and the network modifies the IEEE RTS
system. Generators connected to buses 27, 28, 31 and
32 have similar technical and cost characteristics. The
generators are initially scheduled to run at their maxi-
mum active power output. The generator capability
charts are divided into 4 segments, where the details of
the breakpoints are summarised in Table 1. Other gen-
erators are assumed to have rectangle operating charts.
Peak load level (2850 M W and 580 MVAr) is being
considered. Total MW scheduled is 2930 MW and the
four generators are scheduled to produce at their maxi-
mum active power output (76 MW).
Table 1 Breakpoint details for the generator loading
capability chart
Capability
1 Break- I MW I are assumed to offer the same price for their reactive
Six system states are considered: intact network with 5
single contingencies (outages of lines 14-16, 15-24,4-9,
6- 10 and 5- 10). Selected contingencies considered in
the case study are critical, as these outages make a sig-
400
nificant impact on the voltage and local reactive power
requirements.
As the reactive power reserve may be needed from
particular generators due to the increment of local reac-
tive power requirement in the contingent conditions,
local generators may have to be partly de-loaded to
reserve their reactive power capability.
An -Max Qgeneration capability
cum
...... b x Q absorption capability
A &xQcapabilityatbus 27
h4xQcapabilityatbus 28
. h'0xOcapabilityatbus 31
h4x Q capabilityat bus 32
-20
-30 1 ............
Active power output (MW)
Figure 3 Generator capability chart: the need to reduce
active power output in order to provide additional reac-
tive support.
Figure 3 gives outputs of active and reactive output of
the generators, places on the capability chart. It is
shown that all four generators output are re-dispatched.
In order to ensure sufficient reactive reserve generators
are de-loaded. The amount of the reactive reserve cre-
ated is sufficient to maintain satisfactory voltages in the
post contingent states.
Additional case studies are performed on the standard
1092 bus model of the real England and Wales system
[6]. Three case studies are performed. In each study
annual variation in load is presented with 5 demand
periods. However, the duration of the period is varied to
demonstrate the ability of the developed tool to balance
VAR investment cost against out of merit generation
cost. This is listed in Table 2. In all studies 30 critical
double branch contingencies are considered. Pre-
contingency voltage limits are 0.95 - 1.05 pu, while
post-contingency limits are 0.9 - 1.1 pu. All generations
capability, the same price for their reactive power utili-
sation.and for re-dispatching of their active power out-
put. For reactive investment, the same price applied for
all buses in which additional reactive compensation can
be provided.
Table 2 Loading conditions and their duration for each
case
I Duration(h)
Table 3 Reactive capability layout and out of merit
generation reauired for each case
QPE QNE QPP QNP
(MVAr) (MVAr) (MVAr) (MVAr)
Case 1 19904 534 832 32
(case 3 I 1693 11 521 404 24
Columns “QPE” and “QNE” present the reactive gen-
eration and absorption capability from existing VAR
providers (generators) respectively. Column “QPF’” and
“QNP” consist the reactive generation and absorption
capability from new reactive sources suggested to be
installed. While column “ O M G gives of the amount of
out of merit generation required to be dispatched to
enforce the satisfaction of voltage constraint.
Table 3 shows that when the duration of the peak de-
mand period (51,028 MW) is long, engaging out of
merit generation is an expensive option. Installation of
new VAR support (864 MVAr) combined with reactive
capability committed from generators (19909 MVAr) is
the preferred option.
However, when the duration of the peak reduces to
157h, some 364 MW out-of-merit generation is dis-
patched, while the capacity of new VARs installed
reduces from 832MVAr (lagging) and 32 MVAr (lead-
ing) to 638 MVAr (lagging) and 23 MVAr (leading)
respectively. Also amount of reactive capability pur-
chased from the generators reduces from 19,909 MVAr
(lagging) and 534 MVAr (leading) to 18,713 MVAr
(lagging) and 439 MVAr (leading).
Reducing the duration of the peak period further to 57
hours per year, increases the amount of out-of-merit
generation dispatched to 1,266 MW, while the capacity
of new VARs installed reduces to 409MVAr (lagging)
and 25 MVAr (leading). Similarly, the amount of lag-
ging capability reduces significantly to 16,93 1 MVAr,
while the demand for leading Capability slightly in-
creases.
CONCLUSION
In this paper a novel sensitivity analysis based security
constrained OPF was developed to optimally allocate
VAr support amongst the existing generator and VAr
investment required by optimising control variables in
preventive and/or corrective modes. The coupled man-
1 agement of active and reactive power for voltage con-
trol strategy, showed by minimising the cost of voltage
dnven out of merit generation and allocation of VAr
support contract and investment are presented. Genera-
tor loading capability chart was modelled and discussed.
This tool can optimise reactive support of the system
across a number of demand levels taking into account
some credible contingencies. Case studies performed
show that the developed SA-SCOPF is applicable to
large-scale power systems.
OMG ACKNOWLEDGEMENTS
(MW)
0 The authors gratefully acknowledge the support from
EPSRC (GRW37489) and the valuable inputs from
126d National Grid Company and Power Gen.
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