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Distributed Generators as Providers of Reactive Power SupportA Market Approach

Augusto C. Rueda-Medina, Student Member, IEEE, and Antonio Padilha-Feltrin, Senior Member, IEEE
AbstractTraditionally, ancillary services are supplied by large conventional generators. However, with the huge penetration of distributed generators (DGs) as a result of the growing interest in satisfying energy requirements, and considering the benets that they can bring along to the electrical system and to the environment, it appears reasonable to assume that ancillary services could also be provided by DGs in an economical and efcient way. In this paper, a settlement procedure for a reactive power market for DGs in distribution systems is proposed. Attention is directed to wind turbines connected to the network through synchronous generators with permanent magnets and doubly-fed induction generators. The generation uncertainty of this kind of DG is reduced by running a multi-objective optimization algorithm in multiple probabilistic scenarios through the Monte Carlo method and by representing the active power generated by the DGs through Markov models. The objectives to be minimized are the payments of the distribution system operator to the DGs for reactive power, the curtailment of transactions committed in an active power market previously settled, the losses in the lines of the network, and a voltage prole index. The proposed methodology was tested using a modied IEEE 37-bus distribution test system. Index TermsDistributed generators, distribution systems, Markov models, Monte Carlo method, multi-objective optimization, power generation, reactive power market, uncertainty.

Constants: Minimum and maximum reactive power generation limits of the DG . Initial active and reactive power generation of the DG . Reactive power in the absorption region of the DG . Reactive power used by the DG for its internal equipment. Synchronous reactance of the DG . Terminal rated voltage of the DG . Maximum armature current of the DG . Maximum eld current of the DG . Maximum internal voltage of the DG . Component of reactive power cost that needs to be offered in the market by the DG operating in region . Active power transactions contracted between the distribution system operator and the DG . Active and reactive power specied at bus . Minimum and maximum voltage limits at bus . Maximum current limit of line . Maximum angle between the terminal voltage and the quadrature axis of synchronous generator . Total number of generations of the multi-objective algorithm. Sizes of the external and population sets of the multi-objective algorithm. Dimensional adjustment factor associated with the PB. Dimensional adjustment factor associated with the CTD. Dimensional adjustment factor associated with the . Dimensional adjustment factor associated with the TVHI. Penalty coefcient associated with the violated constraint of solution in generation . , Minimum and maximum limits on values of the constraint of solution in generation .

NOTATION The notation used throughout this paper is reproduced below for quick reference. Sets: DGs coupled through synchronous generators. DGs coupled through doubly-fed induction generators. DGs. . Lines of the system. System buses. Load buses. External and population sets of the multi-objective algorithm. Violated constraints.
Manuscript received December 21, 2011; revised April 14, 2012; accepted May 28, 2012. Date of publication July 13, 2012; date of current version January 17, 2013. This work was supported by Fundao de Amparo Pesquisa do Estado de So Paulo (FAPESP), grant number 2007/08307-7. Paper no. TPWRS01226-2011. The authors are with the Universidade Estadual Paulista (UNESPIlha Solteira), So Paulo, Brazil (e-mail: aucerume@gmail.com; padilha@dee.feis. unesp.br). Digital Object Identier 10.1109/TPWRS.2012.2202926

0885-8950/$31.00 2012 IEEE

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Number of discretized states. Study time for evaluation of the system. Number of times to observe the behavior of the system. Lagging power factor. Leading power factor. Variables: Reactive power output of the DG in region . PB operating

Transition probability of moving from an initial state to a nal state . Matrix of transition probabilities. I. INTRODUCTION HE changing regulatory and economic scenarios in the electrical industry, as well as the need for more exible electrical systems, technological advances, rising global fuel prices, and a renewed interest in environmental issues are playing a key role in the development of distributed generation, energy storage systems, demand response programs, and synchronized measurement technologies issues that have been studied in recent years as essential components to meet the smart grid. In the smart grid, as a result of the increasing penetration of the distributed generation and energy storage systems, issues such as the micro-grids concept become more important to harmonize local energy production and consumption. To meet a micro-grids autonomous operation, attention should be paid not only to the power supplied by generators to satisfy the loads but also to other services that are necessary to provide security and stability to the system: the so-called ancillary services [1]. Therefore, with the huge penetration of distributed generators (DGs) as a result of the growing interest in satisfying energy requirements, it appears reasonable to assume that ancillary services could be provided by DGs in an economical and efcient way, considering the benets that they can bring to electrical systems, to the environment [2][5], and to helping fulll the micro-grids autonomy. Among these ancillary services, reactive power support appears as one of the most important. In this work, this ancillary service is addressed through a market approach for DGs in distribution systems, to help meet the smart grid by calling for more active participation of DGs. In this way, DGs could help to satisfy the autonomy of micro-grids regarding reactive power requirements. Several studies have considered DGs as potential providers of ancillary services [6][15]. Many of these studies involve the use of DGs as providers of reactive power support. In [9], a methodology is proposed for combined local and remote voltage control in distribution systems considering capacitors, on-load tap changing transformers, and DGs. Reference [10] presented a proper coordination among on-load tap changing transformers, substation switched capacitors, feeder-switched capacitors and DGs. The possibility of providing reactive power support to the grid from wind farms with inverters based on power electronics, including detailed analysis of capability curves and cost components, are examined in [11]. With regard to markets of reactive power for DGs, few studies have been developed; this is because the consideration of DGs as participants in these markets is a relatively recent idea that is gaining importance as the penetration of distributed generation increases. Among these studies, [12] presents a review of ancillary services market design options for DGs, including spinning reserve and voltage support at the distribution level. In other studies [13][15], although the proposals are directed to technologies that include DGs with variations in the primary

Payment burden of the distribution system operator. Expected nancial compensation for the DG . Transaction deviation of the active power contracted between the distribution system operator and the DGs. Total active power losses in the lines of the network. Active power losses in the line .

CTD

TVHI

Total voltage heterogeneity index of the system. Voltage heterogeneity index at bus . Uniform market prices for region of the offer structure . Binary variable that denes the operating region of the DG with reactive power output . Actual active power transactions between the distribution system operator and the DG . Active and reactive power calculated at bus . Voltage at bus . Current through line . Fitness function that indicates the behavior of solution in generation regarding the . Fitness function that indicates the behavior of solution in generation regarding the PB. Fitness function that indicates the behavior of solution in generation regarding the CTD. Fitness function that indicates the behavior of solution in generation regarding the TVHI. Penalty function associated with the violated constraint of solution in generation . Actual value of the violated constraint of solution in generation . Discrete random variable in the period . Conditional probability function.

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energy source, the management of uncertainties is not included. Other important issues, such as the accurate operation model of the DGs technologies and the expansion of the time horizon of the method, are also disregarded. Furthermore, usually only one objective, operational cost, is considered. We did not nd any proposal for reactive power markets for DGs in distribution systems considering uncertainties. Generally, the power generated by DGs based on renewable resources (e.g., wind and solar radiation) varies considerably over time. A high degree of variability reduces the available capability of these DGs because their power output is uncertain. To determine the true available capability of this kind of DG, this uncertainty must be reduced so that these DGs can be regarded as a reliable alternative, particularly in the provision of sensitive services such as ancillary services. In this paper, a settlement procedure for a reactive power market for DGs in distribution networks is proposed. The power generation uncertainty of the DGs based on renewable resources is reduced by running a multi-objective algorithm (MOA) in multiple probabilistic scenarios through the Monte Carlo method (MCM) and dening the time series associated with the active power generated by such DGs through Markov models (MkvM). One of the most important issues in developing a market for DGs is the type of technology to consider. In this paper, attention is directed to wind turbines (WTs) connected to the network through synchronous generators (SGs) and doubly-fed induction generators (DFIGs). In wind energy applications, DFIGs are more common than SGs. However, SGs with permanent magnets excitation are also gaining their share of ratings in the Megawatt class [16]. The formulated problem is of a mixed integer non-linear programming nature. Nonlinear constraints are handled by incorporating penalty functions directly to the MOA. The proposed MOA is based on an evolutionary optimization technique known as Strength Pareto Evolutionary Algorithm 2 (SPEA second generation) [17]. The objectives to be minimized through this algorithm are the payments of the distribution system operator (DSO) to the DGs for reactive power (i.e., the PB), the curtailment of transactions committed in an active power market previously settled (i.e., the CTD) the losses in the lines of the network, and a voltage prole index. The main contributions of this work are listed below: It calls for more active participation of DGs due to their potential benets and increasing penetration into the system. Two important types of technologies used to connect DGs to the network are considered: SGs and DFIGs. The uncertainty of DGs based on renewable resources is reduced by a proposed forecasting system that combines the MCM and MkvM. Four important objectives are considered to be optimized through a proposed MOA: minimization of the PB, CTD, and TVHI. The expansion of the time horizon of the method is considered. In order to formulate the reactive power market for DGs of this proposal, some assumptions were made:

The system has a huge penetration of DGs. This increases the likelihood of having plenty of support to deliver the service and provides a sufcient number of participants. The market structure used follows the one proposed in [18]. Reactive power is purchased from all the sellers by a single buyer, the DSO. The formulation assumes that the active power generation for the DGs has already been decided. The DSO receives reactive power cost coefcients from the DGs and settles the market in a day-ahead basis. All the DGs receive a uniform price, which is the highest priced offer accepted. According to [19], this provides the DGs enough incentives to bid based on their true cost. II. REACTIVE POWER MARKETS Services associated with reactive power and payment mechanisms differ from one electricity system to another [20]. The New York Independent System Operator (NYISO) follows an embedded cost-based pricing to compensate generators for reactive power services, and also imposes penalties if they fail to provide them [21]. Generators of the NYISO, as well as generators of the California Independent System Operator (CaISO), are also compensated if they are required to produce reactive power by backing down their active power output. CaISO enters into long-term contracts with generators, which are mandated to provide reactive power within a power factor range of 0.9 lagging to 0.95 leading; beyond these limits, the generators are paid for their reactive power [22]. The National Grid Company (NGC) of the U.K. establishes obligatory reactive power services and, for generators with excess reactive power capabilities, enhanced reactive power services [23]. As presented above, in most cases the system operator establishes contracts with the reactive power providers. These contracts are usually bilateral agreements based on the system operators experience and traditional practices, rather than through well-formulated competition mechanisms [20]. Although a market approach presents major challenges in terms of design, particularly for DGs, if it is well dened, it has the potential to provide several advantages, such as better investment signals for suppliers, greater efciency through market determined prices and, if all providers receive a uniform price (which is the highest priced offer accepted), the providers have enough incentives to bid based on their true cost [19]. The reactive power market settlement procedure presented in this work proposes to go one step further with respect to DGs to consider them not only to deliver active power, but also to encourage their participation in the reactive power support through a market environment. To show the impact of inserting a compulsory rule, such as the power factor obligatory limits in the system operated by CaISO, comparative tests were performed using the market approach presented in this work with and without this rule. III. REACTIVE POWER PRODUCTION COST Basically, the reactive power production cost can be divided into additional investment cost and additional operational cost.

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Fig. 2. Reactive power production cost functionOffer structure. Fig. 1. Capability curves: (a) SG, (b) DFIG.

A. Additional Investment Cost In the case of DGs that are not operating at maximum load all the time, the capacity of reactive power is available with certain probability without incurring an additional investment cost due to oversizing [7]. B. Additional Operational Cost Operational cost can further be divided into xed operational cost and variable operational cost. 1) Fixed Operational Cost: This cost is mainly attributed to reactive power generated by the DG for its internal equipment. 2) Variable Operational Cost: a) Cost of Losses: When an increase in the supply of reactive power is required, losses are generated in addition to those existing as a result of the process of energy conversion [7]. b) Lost Opportunity Cost: This cost occurs when more reactive power than what is available is required, and the active power generation has to be reduced to increase the reactive power capacity. As an example of lost opportunity cost (LOC), consider the capability curve of an SG [24] (Fig. 1(a)) or a DFIG [25] (Fig. 1(b)). If more reactive power is required from the DG, say , the operating point requires shifting back from the initial state to the nal state . In this case, the DG loses the opportunity to sell active power because it has to reduce its active power output when higher reactive power is demanded. IV. EXPECTED FINANCIAL COMPENSATION According to the power capability curve of a SG or a DFIG, and the initial operating point , ve operating regions are dened: Regions 1 and 5: dened by the limits (in the reactive power absorption area) and (in the reactive power injecting area), respectively. When the DG operates in these regions, it should receive payment for the loss of sales opportunity of active power. Region 3: dened by limits . The DG does not receive payment when it operates in this region. Regions 2 and 4: dened by the limits (in the reactive power absorption area) and (in the reactive power injecting area), respectively. In these regions, the DG should receive payment because it incurs the cost of losses. Through the reactive power production cost function of each DG presented in Fig. 2, which is based on the operating regions

dened above, an offer structure is formulated [18], [26]. According to this structure, an EFC function for a DG at the time instant is constructed and shown in (1):

(1) and are offers for loss of opportunity when a DG where is operating in regions 1 and 5; and and are offers for cost of losses when a DG is operating in regions 2 and 4. Thus, the coefcients and need to be offered in the market by the DGs. The corresponding EFC for and are quadratic functions of because it is assumed that active power costs are parabolic functions. The corresponding EFC for and are assumed to be linearly varying components. V. MATHEMATICAL FORMULATION Special consideration must be addressed in reactive power markets for DGs. The location of the DGs is of fundamental importance, since a low-priced offer is not necessarily attractive if the DG is located at a remote bus and, in contrast, an expensive offer of a DG located at a heavily loaded center may be unavoidable. Therefore, the reactive power market clearing should consider the parameters and topology of the system, and its operational constraints. The proposed mathematical formulation of the multi-objective optimization problem is shown in the following:

(2) (3) (4) (5)

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subject to: (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) VI. REACTIVE POWER MARKET CLEARING SCHEME In the reactive power market clearing scheme for DGs proposed here, the nal goal is to declare the uniform market price of each component of the EFC function. To achieve this, the general procedure is divided into three sequential stages: 1) initially, all participating DGs submit their offers to the DSO according to the components of the EFC function; 2) after receiving the offers, the DSO performs the reactive power market settlement; 3) nally, with the results of the market settlement process, the DSO sets out the uniform market price for each component of the EFC function. To extend the time horizon of the proposed method, the above procedure is performed considering several time instants, e.g., following a daily load curve and offers sets divided into hourly intervals. Thus, in stage 1), each generator provides a set of offers for each hour of the day; in stage 2), the DSO considers that the system state changes according to a daily load curve; and, in stage 3), the DSO provides a set of 24 uniform market prices (one for each hour of the day). Settlement of a reactive power market for DGs must consider the network conguration and operational constraints, in addition to the offer prices of the DGs. However, another signicant issue is the high degree of variability present in the generation of the DGs based on renewable energy that reduces their available capability. To determine the true available capability of these DGs, this uncertainty must be reduced, so that they can be regarded as a reliable alternative to provide reactive power support. To reduce this uncertainty, an algorithm combining the MCM and MkvM is proposed below. In this algorithm, the time series for the active power outputs of the DGs are dened through the MkvM theory and, using the MCM, the reactive power market clearing is performed by running an MOA in multiple probabilistic scenarios. A. Power Flow and Multi-Objective Optimization Algorithm In the proposed analysis, the power ow is an essential tool. Bearing in mind factors such as speed of convergence, accuracy and robustness, a power ow based on the backward-forward method [28] is used in this proposal. (23) Equation (19) represents the rotor current limit of SGs. Equation (20) represents the rotor current limit of DFIGs. The VHI, as shown in Fig. 3 and mathematically expressed in (23), indicates how far the voltages are with respect to a point that is dened here as the midpoint between and :
Fig. 3. Voltage heterogeneity index.

(19)

(20) (21) (22) and ; bus active and reactive where power balance constraints are guaranteed in (6) and (7); algebraic relations to ensure appropriate operating in the reactive power offer regions are expressed in (8)(13); constraints (14) ensure that the market price for each offer of a given set of offers is the highest priced offer accepted; all bilateral transactions between the DSO and the DGs must be within prespecied limits as shown in (15); reactive power output of the DGs must be within operational limits according to (16)(20); bus-voltages must be within regulated limits (21); and line-currents must be within their limits (22). Reactive power output operational limits of the DGs (16)(20) are as follows: Equation (16) represents the armature current limit in the reactive power absorption area of both SGs and DFIGs. Equation (17) represents the armature current limit in the reactive power injecting area of SGs. Equation (18) represents the under-excitation limit associated with the steady-state stability of SGs [27].

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Fig. 5. Discretization of the active power generated by a DG.

voltage magnitude at the nodes where they are installed. These output variables feed the power ow, which delivers the reactive power generated by the DGs, the network line currents and the voltage magnitude at the load nodes, elements necessary to compute the input variables of the MOA: the tness functions and . B. Markov Models An advantage of using MkvM is that they usually are sufcient to capture the dominant factors of the uncertainties of the system under study. The MkvM represent a stochastic process that moves through discrete time steps. A stochastic process with the variable , taking a value from a state in the period , is said to satisfy the hypothesis of rst-order MkvM if, to move from the initial state to the nal state , the process depends only on the state in the period , and the conditional probability function dened in (29) [29]. It is then possible to formulate the matrix of transition probabilities (30): (29) . . . . . . . . . (30)

Fig. 4. Flowchart of the MOA.

The multi-objective optimization is based on the concept of Pareto optimality. A solution is said to be Pareto-optimal if not one of its objective functions can be improved without degrading all others, that is, a solution is Pareto-optimal if it is not dominated by others. The owchart of the SPEA2 adapted to the proposed MOA is shown in Fig. 4. Note that, in Block A, a power ow must be run for each element of the sets and in order to obtain their tness functions (performance functions) values, which are computed according to (24)(28). The strength criterion used in Block B is based on a mechanism that intuitively reects the idea of preferring Pareto-optimal individuals and distributing them, at the same time, along a trade-off Pareto-Optimal Euclidean Space (POES) [17]: (24) (25) (26) (27) if if (28) The variables used in the codication to represent each individual of and , which are the output variables of the MOA, are the active power generated by the DGs and the

..

According to this representation, each row of the matrix corresponds to the current state of the process, whereas each column corresponds to the next possible state. The element of can be calculated as the number of transitions from the state to the state divided into the number of occurrences of the state . In the proposal presented in this study, the random variable of the time series represented by the rst-order MkvM is the active power generated by each DG subject to variations in the primary energy source. An example of the discretization in ve states of the maximum active power generation of a DG, say , is shown in Fig. 5. For clarity, only the probabilities from state three, i.e., the third row of , are presented in this gure. C. Monte Carlo Simulations Algorithm The MCM is based on random simulation of scenarios to mimic the operation of a real system and determine the future behavior of a random variable. The method consists in creating a model identifying the variables that determine the random behavior of the system and use random numbers with a function that characterizes the historical variations of these variables. In this proposal, the historical variations of the random variable (active power generation of the DGs) will be characterized by transition probabilities between discrete states, obtained

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from the MkvM. Each simulated scenario is dened as an observation. The proposed algorithm to perform the MCM is presented below. Step 1) Choose . Choose . Set the observations counter . Step 2) Set . For each DG, dene an initial state , i.e., an initial upper limit of active power generation. Step 3) For each DG, generate an uniform random number between 0 and 1. Link these numbers to , from matrix associated to the corresponding DG, the to move from the current state to the next state , i.e., to dene the upper limit of active power generation at the next time instant . Step 4) The simulation will increase from the current reference to the time corresponding to . Step 5) Perform the MOA proposed in Section VI-A considering that, for each DG, the upper limit of active power generation is determined by the corresponding state . Store the results. Step 6) If , then set and go to the next step. Otherwise, set and return to Step 3. Step 7) If , then set and , and return to Step 3. Otherwise, stop. D. Criterion to Select a Single Solution From the point of view of multi-objective optimization, all solutions of the POES at each time instant and for each observation of the simulations performed through the MCM are equally valid. Consequently, the DSO must choose the solutions among the stored results in Step 5 of the algorithm of the MCM, in order to set out the uniform market price for each component of the EFC function at each time instant . The proposed criterion of this work to select a single solution is composed of two parts: 1) POES Selection: Initially, at each time instant , only one POES from the POESs stored in the simulations performed through the MCM must be chosen. In a pessimistic outlook, the proposal is to choose the POES with the worst solutions, i.e., the POES with the highest number of dominated solutions when they are compared to the solutions of the other POESs. In order to clarify this idea, consider the following example of POES selection. a) Example of POES Selection: Consider the following assumptions: POESs with only two objectives, i.e., in the Euclidean space of dimension two. Only two observations (labeled here as observation 1 and observation 2), i.e., only two simulations performed through the MCM . The observations were obtained at the time instant . At each observation, a POES with six elements or solutions was obtained . All solutions of the two POESs are feasible. The obtained results after applying the MCM are those presented in Table I. A graphical representation of the POES values of Table I is presented in Fig. 6. As observed in this gure, the POES of

TABLE I RESULTS FOR THE POES SELECTION EXAMPLE

Fig. 6. POES selection example.

Fig. 7. Single-solution selection example.

the observation 1 has four dominated solutions regarding all solutions of the POES of the observation 2; and the POES of the observation 2 has two dominated solutions regarding all solutions of the POES of the observation 1. According to the proposal for POES selection presented here, the POES of choice is the one that was obtained in observation 1, because it has more dominated solutions than the POES obtained in observation 2. 2) Single-Solution Selection: Only one solution of the POES selected according to the previous procedure must be used to set out the uniform market prices. The proposal to perform the single-solution selection is to choose the solution with the best t or lowest absolute residual value after performing a nonlinear partial least-squares regression (NLPLSR) [30]. In order to clarify this idea, consider the following example of a singlesolution selection, which uses the same assumptions and results as the example of POES selection presented above. a) Example of Single-Solution Selection: The residuals, resulting from the application of the NLPLSR in the POES of observation 1, are depicted in Fig. 7. According to the proposal for a single-solution selection presented here, the solution of choice is the one with absolute residual value of , which is lled in black in Fig. 7. VII. TESTS AND RESULTS The proposed methodology was tested using a modied IEEE 37-bus distribution test system [31] (data presented in Appendix A), which is shown in Fig. 8. Five WTs of 1000 kW installed in buses 8, 17, 24, 32, and 33 (labeled from to , respectively), the daily load curve divided into 24 h depicted in Fig. 9, and four cases were considered. In the base case, no WTs are installed; in Case-SG, all WTs are SG-based; in Case-DFIG, all WTs are DFIG-based; and in Case-SG/DFIG,

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TABLE III MATRICES OF TRANSITION PROBABILITIES

Fig. 8. Modied IEEE 37-bus distribution test system.

Fig. 9. Daily load curve. TABLE IV TRANSITIONS AND OCCURRENCESTRUE AND PREDICTED VALUES

TABLE II MARKET PRICES FOR REGIONS OF THE OFFER STRUCTURE

WTs of buses 8, 17, and 24 are SG-based, while WTs of buses 32 and 33 are DFIG-based. The daily load curve was divided into 24 h (i.e., ) and adapted to the average values of peak demand in the months of December, January, and February. To account for different probabilistic scenarios, 1800 observations were performed (i.e., ). The minimum and maximum voltages required at buses of the system are 0.98 and 1.03 pu, and the overcurrent limit in lines is 200 A. In Table II, the market prices supposed as offered by the WTs for the regions of the offer structure are presented. In order to obtain computational speed, robustness, total control over the implementation, and exibility, all parts of the proposed methodology (MOA, power ow, etc.) were implemented using the programming language C++ and the compiler g++ 4.4 in the Linux environment. In Table III(a)(e), the matrices of transition probabilities for to , respectively, constructed using real wind data are shown. The maximum active power of each WT has been divided into ve states, as shown in Fig. 5. Note that most entries of this matrix are concentrated in the main diagonal; this means that great changes in power generation from one hour to another are not likely to happen. In order to validate the predicted values of the WTs generation, comparative tests were performed. In Table IV, true and predicted values for transitions between states and occurrences at each state are presented. The mean absolute deviation of predicted values with respect to true values for to are 1.86, 1.77, 0.84, 0.94, and 1.24%, respectively. Low errors show the high accuracy of the proposed method to characterize the system under study. In Table V, the uniform market prices, which were obtained using the proposed solution methodology and the single-solu-

tion criterion of Section VI-D, are presented. Regarding this table, the following observations are made: In Case-DFIG and Case-SG/DFIG, a few times there was remuneration for operation in Region 1. Note that only in Case-SG no WT operated in this region in any of the 24 h, that is, no WT was remunerated for LOC in the reactive power absorption area in that case. In all cases, at least one generator was remunerated for operation in Region 2 in all 24 h, with the exception of the hour number 24 of Case-SG/DFIG. This indicates that the test system under study requires constant absorption of reactive power. In Fig. 10, the total generation of each WT in the three cases is presented. In this gure, the high participation of the WTs in the reactive power absorption can be conrmed, mainly by and . It can also be observed that most of the time at least one WT operated in Region 4. Note that no WT operated in this region for some hours, which have the common feature of being hours of low demand; for example, between hours 2 and 7 in Case-SG, between hours 1 and 7 in Case-DFIG and between hours 2 and 5 in Case-SG/DFIG, among others.

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TABLE VI NUMBER OF TIMES IN WHICH EACH WT DEFINED THE MARKET PRICE

Fig. 10. Active and reactive power generated by the WTs ( kVAr, respectively).

kW and

TABLE V UNIFORM MARKET PRICES

From the two regions in which compensation for LOC is considered (Regions 1 and 5), Region 5 (in the reactive power injection area) was the region in which there was more participation of WTs. For almost all hours, in all study cases, there was remuneration for operation in this region. Continuing with the analysis of the results presented in Table V, the number of times that each WT dened the market price for each region is presented in Table VI, where Table VI(a) is for Case-SG, Table VI(b) is for Case-DFIG, and Table VI(c) is for Case-SG/DFIG. As presented in this table, was the generator that dened the market price the most times. This is mainly because has the highest offer prices (see Table II). Note that this domain is not related to the amount of reactive power delivered by this generator, which can be conrmed in Fig. 10, where it is observed that was not the generator with the largest reactive power support. The information in Fig. 10 can be used by the DSO to dene strategies to improve system quality and competition in the reactive power market for distributed generation proposed here. Such strategies may be, for example, encouraging the installation of distributed generation in critical areas. Fig. 11 presents the tness function values of and in each hour of the day and the means of

these values for each study case, which were obtained using the proposed solution methodology and the criteria of Section VI-D. As shown in this gure, the operating conditions of the system in terms of losses (subgure ) and voltage prole (subgure ) are improved in all analyzed cases regarding the base case. According to the obtained results regarding the CTD (subgure ), the proposal of this work does not cause major disturbances to the active power market previously established, when the solutions are chosen using the criterion of Section VI-D; however, solutions with minimum CTD also could be chosen within the POESs, at the risk of affecting the other objectives. Regarding the PB (subgure ), the lowest values of this objective, that is, the lowest values of payment of the DSO to the WTs for reactive power, were presented in Case-DFIG; however, this case also presents lower contributions to the system in terms of reducing losses and improving the voltage prole. In Fig. 12, voltages at WTs buses in all cases are presented. Note that in the base case (without WTs), voltages at buses of to violated the required lower limit at least once. In all cases where WTs are considered, the voltages at their buses are brought within the preestablished limits. In Fig. 12, it can also be conrmed that the low values of VHI (subgure of Fig. 11) represent the improvement in the homogeneity of the voltages at WTs buses when these generators are considered. The lowest values of PB in Case-DFIG, presented in Fig. 11, can be better observed in Fig. 13. In this gure, the total number of times that the ve WTs operate in four regions dened using the minimum and maximum reactive power generation limits of the GSs and DFIGs (say , , , and , respectively) are presented. As shown in this gure, WTs of Case-SG and Case-SG/DFIG are required to operate close to their upper limits of reactive power generation 8 and 9 times, respectively. As might be expected, the WTs of Case-DFIG cannot provide reactive power beyond their upper limits of generation that are imposed by the DFIGs, which are lower than those imposed by the SGs. This observation, together with Fig. 2 that shows that the costs are higher in regions close to the reactive power generation limits, explains that the PB is lower for Case-DFIG. As shown in Fig. 14, the has the highest PB among all the WTs for the studied cases. This is because, in addition to being installed in an area of high demand, this generator is the one that has the highest electrical distance in relation to the

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Fig. 14. PBs: (a) Case-SG, (b) Case-DFIG, (c) Case-SG/DFIG.

TABLE VII IMPEDANCES BETWEEN WTS

Fig. 15. Capability curves with power factor limits consideration: (a) SG, (b) DFIG.

Fig. 11. Fitness functions: (a) Hourly values, (b) Means.

generator having the highest PB is . However, this difference is signicant only in Case-SG and Case-SG/DFIG. Generators and have similar PBs for the three cases; in this way, it is evident that these three generators, electrically close (as shown in Table VII), share the reactive power requirements of the area in which they are installed. A. WTs Power Factor Limits Consideration As discussed in the introduction section, in a non-market environment, there are systems in which the system operator enters into contracts with generators, which are mandated to provide reactive power within a power factor range. Beyond that range, the generators are paid for their reactive power, as depicted in Fig. 15. To account for power factor limits, tests were performed using the market approach presented in this work and limiting the remuneration area of the WTs. The idea is to show the impact of inserting this rule in the proposed market clearing scheme. In those tests, a power factor of 0.95, for both lagging and leading, were considered. For the power factor consideration, the at each time instant and for each WT is obtained according to (2) if any of (31)(34) is satised: (31) (32) (33) (34)

Fig. 12. Voltages at WTs buses.

Fig. 13. Occurrences of reactive power generated by the WTs for each case.

others, as shown in Table VII, making it the most required generator of all in terms of reactive power. In all three cases, the next

If neither of (31)(34) is satised, then the WT is not remunerated, i.e., the . In Table VIII, the uniform market prices, which were obtained using the proposed solution methodology, the single-solution criterion of Section VI-D, and consideration of power

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Fig. 16. Active and reactive power generated by the WTs ( kVAr, respectively) with power factor limits consideration.

kW and

TABLE VIII UNIFORM MARKET PRICES WITH POWER FACTOR LIMITS CONSIDERATION

Fig. 17. Fitness functions with power factor limits consideration : (a) Hourly values, (b) Means.

factor limits, are presented. Observations made regarding Table V (without power factor limits consideration) are similar for Table VIII: A few times there was remuneration for operation in Region 1, i.e., a few times WTs were remunerated for LOC in the reactive power absorption area. In all cases, at least one generator was remunerated for operation in Region 2 in all 24 h. In Fig. 16, the total generation of each WT in the three cases is presented. In this gure, the high participation of the WTs in the reactive power absorption can be conrmed, mainly by and . It can also be observed that most of the time at least one WT operated in Region 4. Note that no WT operated in this region for some hours which have the common feature of being hours of low demand. From the two regions in which compensation for LOC is considered (Regions 1 and 5), Region 5 (in the reactive power injection area) was the region in which there was more participation of WTs. the tness function values of and obtained using the proposed solution methodology, the criteria of Section VI-D, and limits to the remuneration area according to the power Fig. 17 presents

Fig. 18. Comparison without and with power factor limits consideration: (a) PBs, (b) Number of times in which the WTs were not remunerated.

factors values preestablished above. In this gure, note that similar results were obtained regarding the tness function values without consideration of the power factor limits (Fig. 11), in terms of improvement of losses (subgure ) and voltage prole (subgure ). The results presented in Fig. 17 regarding the CTD (subgure ) show that the proposed market clearing scheme does not cause major disturbances to the active power market previously established when power factor limits are considered. Regarding the PB (subgure ), the mean values presented in Fig. 17 are lower than those presented in Fig. 11. This can also be conrmed in Fig. 18(a), where total PBs for each case are presented. These values are lower when power factor limits are considered because there are times in which there is no compensation for reactive power support, as presented in Fig. 18(b). Fig. 19, as a decomposition of Fig. 18(b), presents the number of times in which each WT was not remunerated when power factor limits are considered. In this gure, it can be observed that is the generator which does not receive compensation

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Fig. 19. Number of times in which the WTs are not remunerated with power factor limits consideration: (a) Case-SG, (b) Case-DFIG, (c) Case-SG/DFIG.

TABLE IX DATA OF THE MODIFIED 37-BUS RADIAL DISTRIBUTION TEST SYSTEM

The establishment of a market of reactive power for DGs means, under the proposal of this work, benets for the distribution system in terms of reducing losses and improving the voltage prole. According to the results, the proposal of this work does not cause major disturbances to the active power market previously established when the solutions are chosen using the proposed criterion. The reactive power market settlement procedure presented in this work proposes to go one step further with respect to DGs to consider them not only to deliver active power, but also to encourage their participation in the reactive power support through a market environment.

APPENDIX A IEEE 37-BUS DISTRIBUTION TEST SYSTEM Data of the modied IEEE 37-bus distribution test system, which consists of a single-phase equivalent system, are presented in Table IX. REFERENCES
[1] M. Shahidehpour, H. Yamin, and Z. Li, Market Operation in Electric Power System. San Francisco, CA: Wiley, 2002. [2] H. H. M. Quezada, J. R. Abbad, and T. G. S. Roman, Assessment of energy distribution losses for increasing penetration of distributed generation, IEEE Trans. Power Syst., vol. 21, no. 2, pp. 533540, May 2006. [3] C. L. T. Borges and D. M. Falco, Optimal distributed generation allocation for reliability, losses, and voltage improvement, Int. J. Elect. Power Energy Syst., vol. 28, no. 6, pp. 413420, Jul. 2006. [4] H. A. Gil and G. Joos, On the quantication of the network capacity deferral value of distributed generation, IEEE Trans. Power Syst., vol. 21, no. 4, pp. 15921599, Nov. 2006. [5] C. L. Su, Stochastic evaluation of voltages in distribution networks with distributed generation using detailed distribution operation models, IEEE Trans. Power Syst., vol. 25, no. 2, pp. 786795, May 2010. [6] G. Joos, B. T. Ooi, D. McGillis, F. D. Galiana, and R. Marceau, The potential of distributed generation to provide ancillary services, in Proc. IEEE PES Summer Meeting, Seattle, WA, Jul. 1620, 2000, pp. 17621767. [7] M. Braun, Provision of ancillary services by distributed generators, Ph.D. dissertation, Univ. Kassel, Kassel, Germany, 2008. [8] R. Angelino, A. Bracale, G. Carpinelli, M. Mangoni, and D. Proto, A fuel cell-based dispersed generation system providing system ancillary services through power electronic interfaces, Int. J. Renew. Energy, vol. 36, no. 9, pp. 23122323, Sep. 2011. [9] F. A. Viawan and D. Karlsson, Combined local and remote voltage and reactive power control in the presence of induction machine distributed generation, IEEE Trans. Power Syst., vol. 22, no. 4, pp. 20032012, Nov. 2007. [10] F. A. Viawan and D. Karlsson, Voltage and reactive power control in systems with synchronous machine based distributed generation, IEEE Trans. Power Del., vol. 23, no. 2, pp. 10791087, Apr. 2008. [11] N. R. Ullah, K. Bhattacharya, and T. Thiringer, Wind farms as reactive power ancillary service providersTechnical and economic issues, IEEE Trans. Energy Convers., vol. 24, no. 3, pp. 661672, Sep. 2009. [12] D. Porter, G. Strbac, and J. Mutale, Ancillary service provision from distributed generation, in Proc. 18th CIRED, Turin, Italy, Jun. 69, 2005, pp. 14. [13] R. Palma-Behnke, J. L. Cerda, L. S. Vargas, and A. Jofr, A distribution company energy acquisition market model with integration distributed generation and load curtailment options, IEEE Trans. Power Syst., vol. 20, no. 4, pp. 17181727, Nov. 2005. [14] P. M. De Oliveira-De Jesus, E. D. Castronuovo, and M. T. de Leao, Optimal reactive power provision of wind farms in liberalized marketsA generation viewpoint, in Proc. IEEE PES T&D Conf. Exhib., Dallas, TX, May 2124, 2006, pp. 295300.

the greatest number of times. However, as can be conrmed in Fig. 16, also was involved in the reactive power support, mainly in the reactive power injection area. VIII. CONCLUSION A settlement procedure for a reactive power market for DGs in distribution networks was proposed. The uncertainty of the power generated by DGs based on renewable resources was reduced by running an MOA in multiple probabilistic scenarios through the MCM and dening the time series associated with the active power generated by WTs through MkvM. Low values of the mean absolute deviation of predicted values with respect to true values for WTs generation show the high accuracy of the proposed inference method to characterize the system under study. The accurate model of the DGs technologies is of great importance in determining the true capabilities of the DGs to deliver reactive power support. Another important issue in distribution systems, the expansion of the time horizon of the method, was also considered.

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[15] F. Bignucolo, R. Caldon, and A. Sacco, A novel market based distribution system controller for active distribution networks, in Proc. 44th Int. UPEC, Glasgow, U.K., Sep. 14, 2009, pp. 15. [16] VENSYS, Aug. 2011, Wind Turbines. [Online]. Available: http://www. vensys.de/energy-en/. [17] E. Zitzler, Evolutionary algorithms for multiobjective optimization: Methods and applications, Ph.D. dissertation, Swiss Federal Inst. Technol., Zurich, Switzerland, 1999. [18] I. El-Samahy, K. Bhattacharya, C. Caizares, M. F. Anjos, and J. Pan, A procurement market model for reactive power services considering system security, IEEE Trans. Power Syst., vol. 23, no. 1, pp. 137149, Feb. 2008. [19] R. Ethier, R. Zimmerman, T. Mount, W. Schulze, and R. Thomas, A uniform price auction with locational price adjustments for competitive electricity markets, Int. J. Elect. Power Energy Syst., vol. 21, no. 2, pp. 103110, Feb. 1999. [20] A. Singh, P. K. Kalra, and D. S. Chauhan, New approach of procurement market model for reactive power in deregulated electricity market, in Proc. Int. Conf. Power Syst., Kharagpur, India, Dec. 2729, 2009, pp. 16. [21] NYISO, New York Independent system Operator Ancillary Services Manual, Oct. 2011. [Online]. Available: http://www.nyiso.com/public/ webdocs/documents/manuals/operations/ancserv.pdf. [22] Principles for Efcient and Reliable Reactive Power Supply and Consumption, FERC Staff Report, Oct. 2011. [Online]. Available: http://www.ferc.gov/eventcalendar/les/20050310144430-02-04-05reactive-power.pdf. [23] NGC, The Connection and Use of System Code, Oct. 2011 [Online]. Available: http://www.nationalgrid.com/uk/Electricity/Codes/. [24] S. J. Chapman, Electric Machinery Fundamentals, 4th ed. New York: McGraw-Hill, 2005. [25] R. J. Konopinski, P. Vijayan, and V. Ajjarapu, Extended reactive capability of DFIG wind parks for enhanced system performance, IEEE Trans. Power Syst., vol. 24, no. 3, pp. 13461355, Aug. 2009. [26] J. Zhong and K. Bhattacharya, Toward a competitive market for reactive power, IEEE Trans. Power Syst., vol. 17, no. 4, pp. 12061215, Nov. 2002. [27] N. E. Nilsson and J. Mercurio, Synchronous generator capability curve testing and evaluation, IEEE Trans. Power Del., vol. 9, no. 1, pp. 414424, Feb. 2002.

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Augusto C. Rueda-Medina (S09) received the B.Sc. and M.Sc. degrees from the Universidad Tecnolgica de Pereira, Colombia, in 2005 and 2008, respectively, and the Ph.D. degree from the UNESPIlha Solteira, So Paulo, Brazil, in 2012. He is currently a researcher at the UNESP. His main research interests are distributed generation, and planning and analysis of electrical distribution and transmission systems.

Antonio Padilha-Feltrin (M89SM06) received the B.Sc. degree from the EFEI and the M.Sc. and Ph.D. degrees from the Universidade de Campinas, Brazil. He is currently a Full Professor at the Electrical Engineering Department of the UNESPIlha Solteira, So Paulo, Brazil. From 1995 to 1997, he was a Visiting Faculty at the Electrical and Computer Engineering Department of the University of Wisconsin Madison. His main interests are in analysis and control of electrical power systems.