Simulating Active and Reactive Energy Markets Antonia Nasiakou Manolis Vavalis Dimitrios Bargiotas Department of Electrical Engineering Technological Educational Institute of Central Greece Halkida, Greece bargiotas@teilam.gr Department of Electrical and Computer Engineering University of Thessaly and IETETH/CERTH Volos, Greece {adnasiak,mav}@inf.uth.gr Abstract—The aim of this paper is to present our initial efforts on understanding, mainly through models and simulations, the practical interactions between reactive and active energy markets in a power grid. The reactive power markets, regardless the obvious importance, have not received significant research and development attention so far. Recent studies concern the characteristics of such markets focusing almost exclusively on the producers’ viewpoint. In this paper we propose to study the effect of reactive power at the consumer side and the price that has to pay. Experiments exhibiting the interaction of the reactive and active energy markets are presented and analyzed through a simple IEEE bus configuration and a case study of a power grid with a total of approximately 30000 households with varying energy requirements and distributed energy producers. Keywords -- Active Power, Demand Respond, Energy Markets, Reactive Power, Simulation, Smart Grid. I. INTRODUCTION It is known that the power quality is deteriorating due to reactive power and harmonic wave in the electrical power grids. The control of voltage is crucial for the operation of power systems and the reactive power is essential for this. It is responsible for the flow of the active power through the transmission and distribution network. In other words, reactive power is required to maintain the voltage within the appropriate limits in order to ensure the reliability of the power system and deliver the demanded active power through transmission lines. Voltage control in an electrical power system is important for the proper operation for electrical power equipment. It prevents damages such as overheating of generators and motors, it reduces transmission losses and maintains the ability of the system to withstand and prevent voltage collapse. As it is well known, increasing reactive power causing voltage to fall while decreasing it causing voltage to rise. Congestion is one of the most important factors that will be affecting the operation of a power system. Two significant Work supported in part by the GSRT Excellence Research Grant entitled Towards Next Generation Intelligent Energy Systems and the EPEATH Kripis Grant. factors raise congestion in power systems: thermal limits and voltage limits. A simple quadratic DC-Load model, which relies on active power and assumes that losses are relatively small, is sufficient in the case of congestion due to thermal limits [5]. However, in the case of congestion related to voltage limits, DC-Load models fail and AC-Load models take their place where the power is divided into active and reactive. Modern energy markets almost exclusively concern active power. The concept of active power is more intimate than the reactive power, with the latter playing a vital role as ancillary service in the operation of power systems. Utility power purchase agreements only base payments on real power generation and not reactive power generation and perhaps this will be the case in the near future. Nevertheless, we argue the necessity of an investigation on separating the energy markets into two interrelated, one associated with active and the other with the reactive power. This separation is motivated by the emerging energy market mechanisms and dynamics, the information available through smart grid and the distributed local energy generation, in particular through renewable source which bring additional stochasticity on the system. In particular we believe that it is worth to start our study with the simple case in which each consumer and producer bid into the market for its demanded power. The rest of this paper is organized as follows. In the next section we briefly describe the landscape of the currently available simulation systems and models of reactive power market that are closely related to our study. In section III we present the implementation and the experimental configurations. Section IV contains the simulation results. Our future prospects and conclusions can be found in Section V. II. BACKGROUND AND STATE OF THE ART The main characteristics of a reactive power market are based on the facts that: • Reactive power cannot be transmitted over long distances due to its excessive losses, so the local production of reactive power is desired. • A reactive power market is usually monopsony – only one buyer, the system operator that actually takes the charges from the customers. Recent research efforts have been recently devote on reactive power and in particular on issues related to its management and pricing and the coupling of reactive and active power markets. Specifically [1], [9] and [3] concern reactive power management mechanisms. In particular,[9] assumes that the operation of reactive power market is decoupled from the active power market and in order to formulate the reactive power dispatch, reactive power reserve management associated with “Voltage Control Area” and payments are considered. In the mechanism that is proposed in [3], a must-run capacity of a generator through an index called, reactive must-run index is used. This index is utilized for the reactive power calculation based on network topology, reactive power compensators and reactive power producers. Furthermore, [1]concerns about several issues associated with existing provision policies for reactive power services like procurement, energy price volatility, optimal provision for reactive power and payment mechanisms(auction, bilateral and long term agreements). The proposed mechanism is based on two levels, associated with long-term (seasonal) and shortterm management (real time). The necessity of incorporating in addition to the conventional generic power generators, into the network reactive power providers that reduce market prices is also discussed. Moreover, in [6] the production costs and the reactive power capacity are considered and analyzed. The coupling of reactive and active market is considered several studies. In [12], the design of the reactive power market that is based on the clearing type of market (first price, uniform auction), the monopsony market and the long-term contracts is proposed. The market is built on the providers’ “Expected Payment Function” in which each component is associated with a region of the reactive capability curve of a generator. The proposed approach is also associated with (a) the minimization of total payment, (b) the minimization of transmission losses and (c) the minimization of deviations from contracts.[7] and [8]are based on the above mentioned study in order to develop their market model. They study a coupled energy and reactive market based on power system security and voltage dependent load models respectively. Methods for reactive power payments and reactive pricing schemes like “Total Payment Function”, “Loss Minimization”, “Load Served” and “Voltage Stability Enhancement Index” are discussed in detail in [8]. Furthermore, [7] presents a coupled day-ahead energy and reactive power market based on the settlement mechanism, which is cleared through an optimal power flow problem. As regards to the pricing methods, in [4] a non-linear programming method for reactive power pricing based on marginal costs in competitive electricity market is presented which encourages the producers to procure reactive power by ensuring retrieval of their costs. The above reactive market related studies concentrate almost exclusively on the producers. To the best of our knowledge the only study that investigates the role of the consumers in reactive power markets is presented in [10] where it is shown that the “Locational Marginal Prices” could be used as price signals to the consumers in order to compensate for reactive power by introducing compensation devices. It is shown that the insertion of such devices leads on decreasing of the electricity cost. III. IMLEMENTATION AND EXPERIMENTAL CONFIGURATIONS A. Design and Implementation The aim of our study is to develop, implement, and analyze a coupled power market. We design and implement a related simulation platform that is based on GridLAB-D [2] utilizing five of its modules. We have extended the functionality of several components of these modules to support the operation of the proposed market model. Specifically, we used • The residential module, which implements houses with various appliances. • The climate module which provides weather data. • The tape module, which allow us to specify (and modify) various parameters of a model and to collect the simulated data. • The module that solves the power flow equations. • The auction based market module, which accepts offers and bids either from stub bidder objects or controller objects (controllers for devices and generators). The bid period is 15 minutes and the clearing price and quantity is obtained after an insignificant latency interval. In our study, the local reactive power sources are either diesel engines or wind turbines (see Table 2). They are connected to the grid through a meter and bid through a controller, both objects of GridLAB-D. The consumers (the residential module of GridLAB-D) are connected to the distribution network through the object triplex meter, object of GridLABD. As usual, producers\generators and consumers bid into the market which is organized as an auction. The producers offer power (active and reactive) at a single price irrespective the fact that they bid into the market only for active power. The reactive power is produced anyway. Therefore, the price that the consumers take, after the clearing of the market, is both for reactive and active power. The producer bids its produced active power and the market operator aggregates the reactive power from all the producers that are included after the clearing into the market. The reactive power that each producer offers depends on its capability curve. Moreover, the bid price of each producer is associated with the reactive power that it could give. If the producer reduces the production of active power to produce more reactive power, then the bid price will be higher in order to balance the losses of producing more reactive power. Similarly, consumers bid for active power and the market operator aggregates the reactive power needed from all the consumers. The consumers don’t bid for reactive power. After the market clearing, the market operator collects the supplied reactive power and the demanded reactive power, and compares those quantities in order to decide if more reactive power is needed. If the producers, that are included in the clearing of the market, cannot satisfy the demanded reactive power then the Experiment II connects 20 IEEE-13 feeders, with some modifications regarding the load that can be supported, and accounts to a total of 30,000 houses .Each house may contain a water heater, an HVAC system, a refrigerator, a light system and a microwave. Note that only the HVAC system requires reactive power. Different house configurations have been used as this is depicted in Table 1. As regards the generator side, we assume that there are both local generators and transmission generators. The latter feed, through the transmission lines, the distribution substation of the distribution network, which offers active and reactive power as well. The generators have appropriate properties, which are associated with the active and reactive power at each particular simulation instance. The controller uses these 3 2 3 2 2 1 5 Microwave 2 4 4 2 Water Heater 1 1 3 1 2 2 Refrigerator 2 2 7 1 3 1 1 Devices per house Lights 1 2 Diesel Generators 1 6 Large-GE Medium 6 11500 4 3600 1 1600 1 840 1 850 1 900 1 540 1 1040 1 1135 1 874 1 650 1 1350 Wind Turbines Small C1 C2 T1 T2 T3 T4 T5 T6 T7 T8 T9 T1 0 Local generators HVAC Experiment I consists of one IEEE-37 feeder realizing a town with 790 houses each accommodated with an HVAC (heating, ventilating, and air conditioning) system and a water heater. Two small wind turbines, a diesel generator, with max capacity approximately 0.011MW are the local distributed generators. Table 1– Configuration of Experiment II. Number of Houses B. Experimental Configurations For the needs of our experimentation we have designed several case studies that are as realistic as possible and of significant large scale. Based on IEEE distribution feeders we generate through various scripts the associated glm (GridLAB-D Model) (see [2]) files according to our various experimental design decisions. For our present paper we have selected the following two. The GE_25MW, LARGE, MID and SMALL wind turbines models found in the GridLAB-D platform have been used. Their characteristics and the bid prices for local generators are given in Table 2.The transmission generator bids on 0.40 $\KVA (for both active and reactive). In our experiments, for both diesel and wind turbine, we set the power factor in 0.85, 0.99 and 0.85, 0.97 respectively. We have to mention here that the price of the generators regarding the power factor changes is based on the capability curve of the generator. IEEE Feeders The clearing price of active power is calculated via the auction procedure which is part of the simulation framework. The price of reactive power that consumers have to pay when the reactive power is satisfied from the producers which are included in the market is the clearing price. On the other hand, the price of reactive power that the consumers have to pay, when the producers, that are participated in the market clearing don’t offer the needed reactive, is calculated through a simple procedure. Market operator is responsible for that procedure. Actually, that procedure is taken place after the clearing of the market and calculates the price of reactive power as the average price of producer’s bid price that is not included in the market clearing. This procedure does not affect the simulation and it’s is not part of the simulation procedure. It is worth to be mentioned that there is no bidding operation for reactive power. Consumers ask for active power but they have to pay for reactive as well. Similarly, producers offer active and reactive power at a single price but they bid only for active power and are paid for reactive as well. properties in order to calculate its bid (price and quantity) for the market. We have not considered solar panels since due to the particular weather data selected, theWA-SEATTLE.tmy2 in the climate module (a tmy2 file is a weather data file for a particular location of a given day and hour) resulted in the low contribution on total supply. Table summarizes the configuration of Experiment II while Table 2 presents the characteristics of the local generators involved. Cities and Towns producers that are not included in the clearing of the market offer only their reactive power at their bid price. The consumers in that case have to pay (a) the clearing price for both active and reactive power and (b) an additional price per KVAr for each additional unit of reactive power. The calculation of the additional price is described below. 1 1 1 1 1 1 1 1 1 1 1 1 0 0 1 1 0 1 0 0 1 0 0 0 0 1 1 1 0 0 1 0 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 1 0 1 0 0 1 0 0 1 1 0 0 0 Table 2–Capacities-prices of the local generators in Experiments I and II. Max capacity Active (MW) Reactive (MVAr) Price ($/KVA) Price(($/KVA) (pf=0.85) Small .0058 .0025 .40-.45 .60 Wind Turbine Medium Large .15 1.50 .045 0.65 .40 -.45 .40-.45 .60 .60 Diesel 2.50 1.09 .678 .72 The reactive power from the transmission nnetwork is offered at 0.75$/KVAr when it is supplied from wind turbines or synchronous condensers. The price is highher because these sources will give only reactive power andd because of the disadvantage of reactive power to be transsmitted over long distances due to its excessive losses. Thhe price for bulk transmission generators is 0.40$/KVA. Thhe devices bid on average 0.50$/KW for the refrigerator, 0..45$/KW for the lights, and 0.45$/KW for the microwave. T The bids for these devices are made through the stub_bidder object of GridLAB-D based on properly configuured scheduling. Furthermore, we make the assumption that thhe reactive power that is needed for the lines is supplied by synchronous condensers which have not direct participattion in the market but through forward contracts as it is usual inn such cases. IV. SIMULATION RESULTTS Based on the above-described simulation environment, the market characteristics and the experimennt configurations mentioned, we presented below selectiive experimental results. In all figures we have on the horizoontal axis the time (24 hours) of a simulated date that starts at 00:00 and on the vertical axis either the per unit price in $\K KVAr or $\KW or the power quantities in MW. We also note thhat in the Figure 1 (on the left) red line represents price for aactive power and reactive power in $\KVA and blue corrresponds to the additional price for reactive in $\KVAr. In F Figure 3 grey lines denote the price for active and reactive pow wer, blue lines the additional price per KVAr of reactive poower, with power factor close to 1 and with orange or blue linees the case studies when we change the power factor for both ddiesel engines and wind turbines as given above. 1 0 2 0 Figure 1–Demand, supply and clearing quantitiees for experiment I and active, reactive price (on the left).In the x axis we have the simulation time (24 hours) and in the y axis the pprice in $/KVAr (on the left) for the blue line and in $\KW for thhe red line and the amount of active power in MW (on the right). For Experiment I the active power assoociated with the clearing quantity (blue line), seller’s (red) annd buyer’s (green) total quantity in MW is presented in Figure 1(on the right). It is observed that there is unsatisfied demandd of active power. This is due to the insufficient amount off power that the generators provide. Additionally, the generators that participated in the market offer insufficcient amount of reactive power and therefore the consumerrs are obliged to pay more for reactive power. Only diesel eengines can offer reactive power, but it is not enough to sattisfy the demand. Therefore, the consumers have to take parrt of the reactive power needed from the transmission networrk. The final price that they have to pay for each unit of reacttive power, as we can see in Figure 1 (on the left), is 0.71 $\K KVAr, the average of 0.678, price of diesel engine, and 0.75, price of wind turbine or synchronous condenser off transmission network. In Figures 2 and 3 we present the results associated with Experiment II. In Figure 2 at Town T 7 for example, we observe that at 15:45 there is a big disturbance at the power that the generators supply. This is mainly m on account of the wind turbine operation and the fact that t at that particular time instance its supplied power is dramaatically decreased. This is due to the low wind speed. The size of wind turbines that is selected differs from town to town n as it is depicted by the different supply curve between T5 T and T4 in Figure 2. Moreover, we note that although the supply is sufficient, the total demand is not fully satisfied beecause of the price that the devices may bid into the market. Th his is due to the business logic of controller, object of GridLA AB-D, which is attached to each device. Actually, the bid prrice of each device is a function of the average price and thee standard deviation of the clearing price from the past markets and the comfort zone the participant is willing to use. Altho ough, when the supply is enough, there are consumers that bid d to a lower price than the most expensive producer, and thus these consumers are not included in the market clearing. Note that (Figure 1(on the left) and 3) 3 there are time instances where the market operator requests more m reactive power from generators that are not participating in the market. In the case of unsatisfied reactive power those generators that offer only its reactive power gain more profit because in that case they are participated into the market although a they give only reactive power instead of giving noth hing. Moreover, for experimental purposes, we change the power factor either from diesel generators or from wind turbines in order to observe the effect that the power factor has on the price of reactive power. For Town 1-5 we set the power factor of diesel engine to 0.85(blu ue line in Figure 3) and 0.97(orange line in Figure 3). For City 1 we set the power factor for five wind turbines to 0.97 and for the last four to 0.85 (blue line in Figure 3). For thee City 2 we do not make any changes at the power factor of generators. g For the rest of the towns we make a combination n of different values on power factor for both wind turbines and diesel engines. At the case where the power factor for both h wind turbines and diesel engine is 0.85, we observe (orange line l for Town 8 and 10 in Figure 3) that the additional price is higher. This is due to the fact that the price when the powerr factor is less than 1 is higher because of the opportunity cost and the cost of losses that the generator has to cover. We observe that for Town 6 (Figure 3), which is associated with four large wind turbines, when the power factor is 0.85 for two of the wind turbines and 0.97 for others, the price that consumers c have to pay is 0.576$\KVAr and when the power factor is 0.97 for all the wind turbines the price is 0.565$\KVAr. It is worth to mention here that in Town 6 transsmission generators offer reactive power as well. In differeent cases, if the reactive power from local generators is suffficient then the price will be 0.452$\KVAr in the case where the power factor is 0.97 for the four wind turbines – the bid pricce of local wind turbine. It is worth to mention here that if we reduce the power factor in order to take more reactivee power does not affect positively the additional price that thhe consumer have to pay but the consumers have to pay more. That is also due to the participation of diesel engines price in the calculation of the final price. transmission losses. We would lik ke to note here that the unsatisfied reactive power may leaad the consumers to shift their demand for active power to o off peak hours. It is observed from the experiments thaat the unsatisfied reactive power is occurred on on-peak hourrs. This is due to the fact that the wind turbine has a significan nt influence on the supply of the reactive power. Therefore, due d to the stochasticity of wind turbine, the reactive power could c not be exclusively provided from wind turbines. Instead distributed capacitors, diesel generators and synchron nous condensers from transmission network could be used d. However, in the case of transmission generators the price is a crucial factor. V. SYNOPSIS AND FUTURE PROSPECTS This paper presents our initial effo forts to integrate models, theories and technologies into a larg ge-scale simulation engine that combines the concepts of the active a and reactive power. Specifically, we present the design n of both our simulation engine and our case studies and present selective experiments, which show how the price, p that the consumers have to pay, is affected by the deficient of reactive power when the system needs more reactivee power than its supplies. Figure 2 - Demand, supply and clearing quantitiies in the ten towns and the two cities in Experiment II. In the x axis we have the simulation time (24 hours) and in the y axis thhe amount of active power in MW. Figure 3 depicts significant variations on thhe prices in Town 9. This is due to the fact that the transmisssion generators in that town bid on 0.38$\KVA due to the bussiness logic of the controller. Moreover, it is observed from thee market price that a diesel generator is participated in the marrket. The price at which the controller bids into the markett depends on the average price and standard deviation of the ppast market as it’s mentioned before. So, the variations in thee price are due to the price that the consumers actually bid into the market which is effected by the high price of the diesel engine. At Town 9 there are also variations on the price of reactive power. That town is equipped only with sm mall wind turbines and one diesel engine and therefore the deemanded reactive power is not satisfied from the generators thhat are included in the market. Similar results are observed aat Town 4 where only one wind turbine and 2 diesel engines aare installed. For our experiments, we verify the facct that the local compensation of reactive power costs less tto the consumers. If we make the assumption that there are noo local generators that could offer reactive power, the consum mers have to pay more for reactive power because of the loong distance that reactive power must "travel" and the reactive power Our experimentation shows that, as expected, there exist realistic configurations where locall consumers need to buy additional reactive power from local and non-local producers at a presumably more “expenssive” price. When the compensation of the reactive power is form the non-local producers then the price is rising. Allthough our efforts mainly focus on consumers, we plan to utiliize the recent studies (see section II above) on the markets associated with reactive power generators. This will allow w us to study even more realistic large-scale energy grids further elucidating the interactions between the two markets. Our current models and experim mentation will be further expanded also towards more intelligent methodologies in order to model a bidding operation for f reactive power as well. The objective functions that consstruct the related multiobjective optimization problem ressponsible for the reactive power are more complicated than thee ones associated with the active power market. Actually theese functions are mainly concerned about the opportunity co ost, voltage drop and line overloading. Transmission losses and generator reactive power constraints must be taken und der consideration in order to calculate the price that maintains the system reliability and his extension will allow maximizes the social welfare. Th further experimentation that will lead to deeper understanding of the characteristics of reactive power market and its connectivity to the active power marrket. Other important issues should sureely be considered but are beyond the scope of our study. Forr example, inverters may provide real-time reactive power to compensate for large reactive power loads. Therefore, theeir effect on the emerging energy markets should be clearly ideentified. ACKNOWLEDGM MENT The authors gratefully acknowled dge the contributions of D. Zimeris through our numerous technical discussions. ES REFERENCE [1] Figure 3 – Clearing active and reactive prices pper unit paid to the generators for Experiment II. In the x axis we hhave the simulation time (24 hours) and in the y axis the price in $\K KVAr and the grey line corresponds to the price in $\KVA Last but not least, we should mention thaat reactive power markets are obviously more appropriate for the commercial and industrial case studies. We have restriicted ourselves in the residential case study since it was the oonly one currently available in GridLAB-D. Studies that include commercial and industrial configurations are underway and will be presented elsewhere. I. El-Samahy, K. Bhattacharya, and C.. Canizares. Aunifiedframework for reactive power management in derregulated electricity markets. In Power Systems Conference and Expo osition, 2006. PSCE ’06. 2006 IEEE PES, pages 901–907, Oct 2006. [2] R. Fainti, A. Nasiakou, E. Tsoukalas,, and M. Vavalis, “Design and Early Simulations of Next Generation n Intelligent Energy Systems”, International Journal of Monitoring and Surveillance Technologies Research, 2(2),2014. [3] D. Feng, J. Zhong, and D. Gan. Reactive market power analysis using must-run indices. Power Systems, IEE EE Transactions on, 23(2):755– 765, May 2008. wer pricing using marginal cost [4] R. Ghazi and M. Asadi. Reactive pow theory in competitive electricity marketts. In IEEE International Energy Conference and Exhibition, Energy Con n 2010, pages 369–372, 2010. [5] W. W. Hogan. Markets in real electric networks n require reactive prices. In M. Einhorn, and R. Siddiqi, editors, Electricity E Transmission Pricing and Technology, pages 143–182. Spring ger Netherlands, 1996. [6] X. Li, C. Yu, and W. Chen, A novel value based reactive power procurement scheme in electricity maarkets International Journal of Electrical Power and Energy Systems, 43(1):910 4 – 914, 2012. [7] A. Rabiee, H. Shayanfar, and N. Amjad dy. Coupled energy and reactive power market clearing considering power p system security. Energy Conversion and Management, 50(4):907 7–915, 2009. [8] S. Reddy, A. Abhyankar, and P. Bijwe. Market clearing of joint energy and reactive power using multi objeective optimization considering voltage dependent load models. In Pow wer and Energy Society General Meeting, 2011 IEEE, pages 1–8, July 20 011. [9] J.Saebi, H.Hakimollai, H. Amiri and H.Ghasemi.Anewframework H for reactive power dispatch in electricity markets. Research Journal of hnology, 5(2):380–386, 2013. Applied Sciences, Engineering and Tech [10] T. Vaskovskaya. Market price signals for customers for compensation of reactive power. In European Enerrgy Market (EEM), 2014 11th International Conference on the, pages 1–4, May 2014. [11] J. Vlachogiannis and K. Lee. Optimal operation of smart grids in an C Proceedings Volumes (IFACopen energy market environment. IFAC PapersOnline), 18(PART 1):3701–3703 3, 2011. [12] J .Zhong and K. Bhattacharya. Tow ward a competitive market for reactive power. Power Systems, IEEE E Transactions on, 17(4):1206– 1215, Nov 2002.