A Frame Work for Cost of Reactive Energy for Generators in Deregulated Electricity Market

A Frame Work for Cost of Reactive Energy for Generators in Deregulated Electricity Market

Parthasarathy L #1, Prof. Dr. T. Ananthapadmanabha #2

#1 Associate Professor, Department of Electrical & Electronics Engineering, ATME College of Engineering, Mysore, India

#2 Professor, Department of Electrical & Electronics Engineering, The National Institute of Engineering,

Mysore, India

Abstract

In India presently there is no mechanism to account for the reactive energy supported by the generators during its operation outside the prescribed power factor range. However a flat rate tariff for a unit of reactive energy is introduced in the year 2010 by Central Electric Regulatory Commission (CERC). The flat rate tariff for reactive energy is in action only during the violation of Indian Electricity Grid Code (IEGC) for restriction of system voltage and operating power factor of generators. The generators are not allowed to participate in dynamic reactive energy allocation.

This indicates that the generators are remunerated sufficiently for their availability to produce active power under Availability Based Tariff (ABT) mechanism but the same generator receives no or restricted remuneration to produce / absorb reactive power.

This paper presents a hypothetical frame work to evaluate the cost of generation of reactive energy outside the power factor range. The method aims at removing generators from their restriction to participate in dynamic reactive energy allocation. The proposal is partly similar to drawl / return of active energy during Unscheduled Interchange (UI) under ABT mechanism in India[3].

KeywordsReactive energy cost, Power factor, Dynamic reactive energy, In-phase currents.

1. Introduction

   The National Load Dispatch Center (NLDC) under Power System Operation Corporation Ltd (POSOCO), India mentions that: Reactive power compensation should ideally be provided locally, by generating reactive power as close to the reactive power consumption as possible. The Regional Entities except Generating Stations are therefore expected to provide

   local Volt Ampere Reactive (VAr) compensation/generation such that they do not draw VArs from the EHV grid, particularly under low- voltage condition.

   To discourage VAr drawls by Regional Entities except Generating Stations, VAr exchanges with Inter State Transmission System (ISTS) shall be priced as follows:

   • The Regional Entity except Generating Stations pays for VAr drawl when voltage at the metering point is below 97%

   • The Regional Entity except Generating Stations gets paid for VAr return when voltage is below 97%

   • The Regional Entity except Generating Stations gets paid for VAr drawl when voltage is above 103%

   • The Regional Entity except Generating Stations pays for VAr return when voltage is above 103%, Provided that there shall be no charge/payment for VAr drawl/return by a Regional Entity except Generating Stations on its own line emanating directly from Inter State Generating Station (ISGS).

   The commission also says: The producer should not be compensated for reactive power when operating within its power factor range of 0.95 leading and 0.95 lagging but the transmission provider must compensate the producer for reactive power during an emergency. The charge for reactive energy shall be at the rate of 10 paisa/kVArh w.e.f. 01st April, 2010, and this will be applicable between the Regional Entity, except Generating Stations, and the regional pool account for VAr interchanges. This rate shall be escalated at 0.5paisa/kVArh per year hereafter, unless otherwise revised by the Commission. This tariff is applicable at all times when ever there is a violation of IEGC for system voltage [1].

   There is no indication that this tariff structure during reactive energy transactions is reflecting the actual cost of production and or partly the capacity charge towards reactive energy commitment. This is a price based on a

   pricing formula announced in advance and the method is also currently used in United Kingdom.

   In British system, the generators cost of producing reactive power is recovered from a reactive power capacity payment (majority of the cost) and the rest from the actual reactive power production.

   In some other parts of the world the reactive power and voltage support is procured through long term contracts with Reliability Must-Run (RMR) units, In most markets, Independent System Operators (ISOs) compensate generators that provide reactive power and voltage support. These countries include England and Wales, Australia, Belgium, the Netherlands, and certain provinces of Canada. Sweden follows a different policy. Reactive power in Sweden is supplied by generators on a mandatory basis without compensation. In the province of Alberta, Canada, generators are penalized for failing to produce or absorb reactive power and in Argentina, such penalties are imposed not only on generators, but also on transmission operators, distribution operators and large loads. Finally, in Japan, Tokyo Electric Power Co., gives its retail customers a financial incentive to improve their power factors through discounts of the base rate [2].

2. General Definition of the Problem

   As per the CERC to bring discipline in the voltage profile the following are the code of conduct and is enumerated in Table-1. The agreement between the Transmission System Operators (TSO) and generator

   /producers is highlighted below. The ancillary service of reactive power support can be provided basically by generators, static VAR compensators, synchronous condensers and capacitors / reactors banks connected to the transmission system. The reactive support is divided into two categories: static and dynamic. The voltage at various points on the power network is tightly related to reactive power at those points. Sufficiency or surplus reactive power generation at a point may raise the voltage above nominal value and deficiency or lack of reactive power generation at a point will pull down the voltage below the nominal value.

   Table-1: Summary of reactive energy transaction scheme as per IEGC

   Voltage status at Metering point	TSO	Generator/Producer
   0.97 < V < 1.03	Pays nothing for reactive energy transactions	Receives no payment and generator is obligated to produce, irrespective of its power factor status.
   		However gets compensation during emergency (Tariff not mentioned).
   V < 0.97	Pays for Var drawl at 10paisa/Kvarh	Receives no payment for producing if the generator is in agreed power factor range of 0.95lag and 0.95lead.
   		Receives no additional payment for generating outside the agreed range of power factor.
   	Gets paid for
   	Var return at
   	10paisa/Mvarh
   V > 1.03	Gets paid for Var drawl at10paisa/Kvarh	Receives no payment for absorbing if the generator is in agreed power factor range of 0.95lag and 0.95lead.
   		Receives no additional payment for absorbing outside the agreed range of power factor.
   	Pays for Var
   	return at
   	10paisa/Kvarh

   The generators, static VAR compensators, synchronous condensers provide dynamic reactive power support and the capacitors / reactors banks supply and consume reactive power. These devices are used for base loads

   and have little value in satisfying the fluctuations in the reactive power requirement. On the other hand dynamic reactive power support quickly changes the Mvar level independent of voltage level [5] [6].

   Fig.1 shows the capability curve of a generator. The operating point B is in the region of point where the power factor is outside the power factor range [4].

3. Analytical Model for Evaluation

   NOMENCLATURE

   Fig.1 Synchronous generator capability curve

   Many studies have revealed that cost of dynamic reactive power is higher than those of producing through static means. But one of the factors that empower the TSO to go for dynamic reactive power

   S V

   Ia If

   Cos SCR

   Xs Iao Iro Iai Iri Iri_Ia

   Iai_Ia Iri_Iai Pa

   Pr Ploss Pr_Pa

   Pa_Ploss Pr_Ploss

   3 Phase rating of the Generator [MVA]

   Voltage rating of the Generator Line-Line [KV] Rated current of the Generator [Amps]

   Field current [Amps]

   Phase angle between phase voltage & Ia

   Power Factor of the Generator Short circuit ratio

   Synchronous reactance per phase Active current component of Ia [Amps]

   Reactive current component of Ia [Amps]

   In-Phase active current component of Ia [Amps] In-Phase reactive current component of Ia [Amp Ratio to Iri to Ia

   Ratio to Iai to Ia

   Ratio to Iri to Iai

   Armature power loss due to Iao [MW] Armature power loss due to Iro [MW] Total armature power loss due to Ia [MW] Ratio of Pr to Pa

   Ratio of Pa to Ploss

   Ratio of Pr to Ploss

   support is reliability of dynamic reactive support. The reactive power by static method cannot always produce as reliably as necessary [2]. Generally the The reactive power price for its production by generators should have three parts based on reactive power output according to generators ability curve shown in fig.1[7]:

   1. A fixed component to account for capital cost that can be attributed to reactive power production.

   2. Cost of loss to account for the increased winding losses as reactive power output increases.

   3. Opportunity cost to recover the forgone power during generator obligation to increase its reactive power.

   Also the Mvar output of a generator is thought of exercising two purposes: One is to support the shipment of its own generated power into the grid and the second is to support the system voltage [5]. It is difficult to operate the generator always in the limited range of power factor for the scheduled load cycle. In

   The IEGC reactive energy transaction scheme reveals that the generator / producer receive no payment for serving outside the range of agreed power factor. The generator under this condition is not remunerated and therefore receives no payment from the TSO if the voltage is as per IEGC. On the other hand if the system voltage is below 0.97pu then TSO pays for the reactive power service rendered by generators / producers at the rate of 10paisa/Kvarh with effect from 01st April 2010. Every year the cost per reactive unit is escalated by 0.5paisa.

   The cost of reactive energy is uniform irrespective of the power factor falling out of range. The authors is of the opinion that, the uniform cost for different operating power factor outside the agreed range for such generator operations outside the agreed power factor range is irrational and therefore makes an attempt to propose a

   frame work for tariff structure to recover the cost mentioned in part b of reactive power pricing mentioned in [7].

   The following points are worth mentioning to introduce a cost structure for reactive energy referring to fig 1. which gives the information of the capability of the generators.

   • Region I, where 0 QG QGblag: In this region the generator is not to be remunerated because it is producing reactive power for its own use. Therefore the generator is not injecting reactive power to the grid.

   • Region II, where QGblag QG QGR: Part of this region is prescribed by IERC (up to 0.95lag line). In this region the generator injects reactive power into the grid without sacrificing active power PG. There is definitely increase in active power losses in the generator which is not accounted.

   • Region III, where QGR QG QGB: In this region the power factor of the generator falls outside the agreed power factor range. The generator is subjected to severe stator and rotor heating (due to over excitation) which is not addressed in the present remuneration structure. Over heating demands efficient cooling system to remove excess heats and so on. Also the generator has to give-up some portion of active power generation to accommodate demand in reactive generation. Presently the IEGC demand the generator not to shed portion of active power. This means the generators should invariably be in the power factor range irrespective of reactive demand. In other words since the present remuneration is weak to support this region the CERC insists the generators not to participate. Generator not supporting to produce reactive power to support voltage shall certainly deteriorate the security of the operating condition in this region.

   • Region IV, where QGmin QG 0: In this region the generator is under excited and absorbs reactive power. At some points the generator may have to shed active power to absorb reactive power. More importantly the generator is close to its stability limit. It is seen that a power factor of about 0.5lead can move the generator to the verge of instability. This suggests the producers to avoid absorbing the reactive generation demanded by TSO.

   Observing the behavior of the generator in different regions, the authors develop a cost structure that can suitably remunerate the generator while it operates in

   region III and part of region II. The regions I, IV and part of region II are not considered for remuneration in the discussion.

   The following steps are used to propose a new tariff structure to compensate for generators while they operate in region III and part of region II:

   1. The MVA of the generator is direct indication of its capacity or capability to inject the both active and reactive power to the grid. At rated voltage, the generator current containing both active and reactive component produces active and reactive powers respectively and supply to grid. These components are 90 electrical degrees out of phase and produce heat in the armature independently with a very brief time lag in milli-seconds for a frequency of 50Hz.

      …. (1)

      …. (2)

      …. (3)

   2. The authors recommend considering the in-phase components: active and reactive currents of the armature current. These currents exists simultaneously and share the cross sectional area of the armature conductors. Their magnitudes decide the relative space in conductors and hence produce heat accordingly.

      …. (4)

      …. (5)

      …. (6)

   3. The information about the content of %Iri_Ia in- phase reactive current in the armature for different power factors outside the range is used to frame the cost per reactive unit.

      …. (7) also

      …. (8)

   4. When the operating power factor is out of the range, there will be an increase in the in-phase reactive component and the corresponding heating. The additional effort used in cooling the

      stator and rotor (due to increase in field current) is to be reflected in the cost structure.

   5. The present cost structure seems to be too weak to recover the efforts to cool the generator. The 10paisa per reactive unit is taken as datum to propose the new cost structure. The contribution of in-phase eactive component is 9.75% for operating power factor of 0.95lag. According to CERC no charges are levied for this power factor informs that only 9.75% of heating is allowed and any increase in the reactive contribution of heating invites 10paisa per reactive unit.

   6. The authors propose that there should be an increase in cost per reactive unit for ramping up of

      %increase in the in-phase reactive current. If 10paisa is charged for about 10% contribution of heat due to in-phase reactive current then for every further 10% contribution of heat a 10paisa increase in cost can be framed. Thus if there is 50% increase in the in-phase reactive current which directly contributes to 50% heating should invite charges of about 50paisa per reactive unit for corresponding power factor of the generator.

   7. Ramping up the cost per reactive unit can be used to recover the cost towards corresponding heating due to in-phase reactive current. This structure penalizes heavily for TSO if they demand reactive power outside the power factor range of the generator. TSO is forced to see other alternatives before deciding on the procurement. On the other hand the generator is compensated proportionately based on the heating due to in- phase reactive current.

4. Comparison and Discussions

To demonstrate the proposed method for the new tariff structure for reactive units generated by the generator under different power factor conditions, let us consider the following generator and its data in table-2:

Table-2

We also have:

…. (9)

…. (10)

In table-3, the sum of in-phase currents for different power factors and are yielding the same armature current magnitude. It is evident that the out of phase currents do not give directly the armature current magnitude. The

%Iri_Iai increase in the in-phase reactive component over active component indicates the dominancy of reactive current over heating of the armature for power factors smaller than 0.82lag.

Table-3

Table-4 gives, for a constant load current the %Iri_Ia in- phase reactive component for different power factors. We find the content is 9.75% for 0.95lag and this reactive content increases to 57.76% for 0.65lag. As discussed earlier an approximate of 10% rise in reactive content calls for 10paisa rise in the cost structure. It is seen that for 0.65lag, 57.76paisa will be charged for 136.69% of reactive heating which is caused by 57.76% of in phase reactive current.

Table-4

The ratio %Pr_Pa is rising much rapidly for decreasing power factors. This is also nothing but %Iri_Iai the ratio of in phase reactive current to in phase active current. Also we find for power factors close to 0.95 an approximately 1.88% increase in reactive content for every 0.01 fall in power factor and 1.32% for power factor close to 0.65lag. Thus the variation is non-linear. The authors approximate this curve to a linear one with negative slope to account for cost per reactive unit of CERC and the authors proposed cost per reactive unit for lagging power factors in the range 0.65 < Cos < 0.99.

Fig.2 shows the per unit in-phase currents, armature current and Iri_Iai the in-phase reactive to in-phase active ratio.

1.4

1.2

Currents, reactive:active ratio

1

0.8

0.6

0.4

0.2

reactive:active ratio

In phase reactive component

Armature Current

In Phase active component

0

0.65 0.7 0.75 0.8 0.85 0.9 0.95 1

Power factor

Fig.2

Fig.3 shows the proposed cost structure curve for reactive unit and existing cost per reactive unit as per CERC. It is seen that the cost per reactive unit is 10paisa for power factor 0.94 lag and ramp up to a

value of 58paisa for power factor of 0.65.These values are in correspondence with in-phase reactive current contribution and its participation in heat generation. To get present cost / Kvarh one has to add 1.5paisa per reactive unit for the reading for proposed cost structure obtained from fig2.

60

50

Cost in Paisa / Kvarh

40 Proposed Cost Structure

30

20

Existing Cost Structure of CERC

10

0

0.65 0.7 0.75 0.8 0.85 0.9 0.95 1

Power factor

Fig.3

1. Conclusions

   An adequate effort in a rational way is made to arrive at a frame work to introduce the cost per reactive energy when the operating power factor of a generator is out of the agreed range. Present cost structure of 10ps/Kvarh issued by CERC is seen to be inadequate to recover the cost for the service outside the power factor range. This is of the fact being that the heat generated escalates which needs additional effort to evacuate it as power factor becomes poor. This is not addressed in the present cost structure. Direct relations among the in- phase reactive current that involves in producing heat and cost needed to evacuate heat with additional effort are established. This is used as the basis to frame the cost per reactive energy.

   Power factor of 0.65 lag is taken considering the maximum participation possible by the field circuit without crossing its limits. The frame work discourages the TSO to overdraw the services from generators and also encourages using alternate methods to procure reactive energy. Also the generator is suitably remunerated while generating reactive power outside power factor range. Dynamic reactive support is more reliable and support the system security hence the

   proposed cost structure invites the participation of generator for dynamic reactive support service.

2. References

1. Powersystem Operation Corporation Ltd (POSOCO, India) – NLDC Reactive Power Management- A Resource Handbook 2012.

2. Dr. Alex D. Papalexopoulos and Dr. George A. Angelidis, Reactive Power Management and Pricing in the California Market, Electro Technical Conference, 2006, MELECON 2006, IEEE Mediterranean, Vol., No., pp902,905, 16-19 May 2006.

3. Bhanu Bhushan, A Primer on Availability Tariff

   Power Grid Corporation of India PGCIL, June 2005.

4. Lucian Toma, Mircea Eremia, Constantin Bulae and Ion Tristiu, Optimizing the costs of Reacive Power for the coordinated voltage control service, IEEE, Trondheium Power Tech, 2011.

5. Wilson Xu, Yi Zhang, Luiz C.P.da Silva, Prabha Kundur and Allan A Warrack, Valuation of Dynamic Reactive Power Support Services for Transmission Access, IEEE Transactions on Power Systems, Vol.16, No.4, November 2001.

6. Wang, R.G. Yang and F.S.Wen, On the Procurement & Pricing of Reactive Power Service in the Electcricity Market Environment ,IEEE Power Engineering Society General Meeting, Vol. 1, pp. 1120- 1124, June 2004.

7. El-Samahy, K. Bhattacharya and C.A. Canizares, A Unified Framework for Reactive Power Management in Deregulated Electricity Markets, Proceedings of Power ystem Conference and Exposition, Atlanta, SUA, October-November 2006.