Application of the ant colony search algorithm to reactive power pricing in an open electricity market

Reactive power management is essential to transfer real energy and support power system security. Developing an accurate and feasible method for reactive power pricing is important in the electricity market. In conventional optimal power flow models the production cost of reactive power was ignored. In this paper, the production cost of reactive power and investment cost of capacitor banks were included into the objective function of the OPF problem. Then, using ant colony search algorithm, the optimal problem was solved. Marginal price theory was used for calculation of the cost of active and reactive power at each bus in competitive electric markets. Application of the proposed method on IEEE 14-bus system confirms its validity and effectiveness. Results from several case studies show clearly the effects of various factors on reactive power price. (author)