A Preliminary Analysis of the Economics of Using Distributed Energy as a Source of Reactive Power Supply

Abstract

Reactive power supply is essential for reliable operation of the electric transmission system. Inadequate supply of reactive power can contribute to voltage collapse, as demonstrated in several recent major power outages. In examining the causes of the August 14, 2003 Northeast blackout, the U.S.-Canada Power System Outage Task Force found that "insufficient reactive power was an issue." 1 Reactive power is one of a class of non-energy power system operating needs collectively known as ancillary services. Other ancillary services include regulation, synchronized and non-synchronized reserves, and Black Start Service. Reactive power is unique among other ancillary services in that it must be delivered throughout the transmission system in close proximity to load centers. Reactive power is provided by an array of generation and network devices, including generators, capacitors, synchronous condensers, static VAR compensators, and Static Synchronous Compensators (STATCOMs). Distributed energy devices also have the capability of producing reactive power and voltage support. 2 Intuitively, there seems to be a good match between the requirement for reactive power supplies near load centers and the availability of distributed energy near or at customer loads. The statistics support the intuition that there is tremendous potential for distributed energy to be used for reactive power support. Over 10,000 MVAR of reactive power capability is estimated to be located close to the load. For comparison purposes, the entire New England Independent Service Operator has approximately 12,000 MVAR of available reactive power capacity.

A Tariff for Reactive Power - IEEE

“…2). Capacitors and inductors are relatively inexpensive, but they are typically slow to respond and they are deployed in discrete steps [2]. Generators, synchronous condensers, and static VAR compensators (SVCs) respond quickly and accurately, but they are expensive.…”

“…At the load, one must also take into consideration the reduction of losses in the distribution system and the increased capacity of the transmission system. We estimate these values using the following examples [2] …”

Minimum Synchronous Inertia Requirement of Renewable Power Systems

“…Wind reserve comes with a cost whilst EI response for a short period around ten seconds raises negligible financial problems. EI and APC can effectively reduce RoCoF and frequency deviation in cooperation with the governor response of conventional hydro, gas and steam turbine generators [19].Synchronous generators equipped with synchronous condensing clutches can be decoupled from their driving turbines and temporarily run as synchronous condensers at the expense of small parasitic load [20]. Such an operation mode can cost-effectively increase the synchronous inertia of an RPS.…”

Security assessment due to increased wind generation in a complex power grid

“…The initial purchase of synchronous condensers is usually costly [154]. Based on the anecdotal evidence from the Australian power industry, the typical cost to procure a new synchronous condenser could be around $500/kVA [155,156].…”

“…According to a report published by the U. S. Department of Energy in 2006 [154], the cost of running synchronous condensers may vary from $10 to $40/kVA and maintenance is from $0.4 to $0.8/kVA per year. Considering the average yearly inflation rate of 3% over the last ten years, at present the operational and maintenance costs of synchronous condensers could be from $13.44 to $53.75/kVA and from $0.54 to $1.07/kVA per year respectively.…”