Impact of VAR support on electricity pricing in voltage stability constrained OPF market model

In this paper a nonlinear multi-objective optimization problem is formulated to maximize social welfare and the maximum distance to collapse point in an open power market using reactive support like Static Var Compensator (SVC). The production and consumption costs of reactive power are included in the multi-objective OPF which are intended to provide proper market signals to the electricity market agents coupled with (N-1) contingency criterion based on power flow sensitivity analysis. An index to find the optimal site for VAR support considering various technical and economical parameters is proposed. The weights for these parameters are computed through an Analytic Hierarchy Process (ARP). The impact of optimally placed SVC device on electricity spot prices, social welfare and congestion cost are studied.