Reactive Power Locational Marginal Pricing

A proposed mathematical model for calculating the locational marginal pricing (LMP) of reactive power at the load buses was developed and tested on an IEEE 30 bus test system with the framework of the full AC optimal power flow (OPF). The trust region incremental linear programming method was utilized to solve the OPF problem. The power factor pricing approach based on the generator capability curve was used to develop the reactive power cost function. Considering the existence of fixed shunt capacitor banks on the network, the proposed formulation was tested and provided an accurate result.