Design of robust Var reserve contract for enhancing reactive power ancillary service market efficiency

• Main Authors: Zou, Yunyang, Xu, Yan
• Other Authors: School of Electrical and Electronic Engineering
• Format: Article
• Language: English
• Published: 2024
• Subjects: Engineering; Market efficiency; Market power
• Online Access: https://hdl.handle.net/10356/178979
• Institution: Nanyang Technological University

In a deregulated Var market, market power issue is more serious than in an energy market since reactive power cannot be transmitted over long distances. This letter designs a multi-timescale Var market framework, where market power that may arise in the hourly-ahead Var support service market due to system configuration deficiency and market structure flaws can be eliminated by day-ahead contract-based Var reserve service market. Settlement of day-ahead Var reserve contract is formulated as a two-stage robust optimization (TSRO) model considering worst case of uncertainty realization and potential market power that may arise in hourly-ahead market. TSRO with integer recourses is then solved by a new column and constraint generation algorithm. Results show a robust Var reserve contract can fully eliminate market power, and prevent suppliers from manipulating market prices.