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Voltage Regulation: Tapping Distributed Energy Resources

Voltage Regulation
Fortnightly Magazine - September 2004

relate to reducing the risks (reliability and financial) associated with new technologies. Regulating the asset allows system operators and state regulators to control the testing and deployment of new technology. Consequently, they can proactively seek technology-driven improvements. The technology would be deployed only as rapidly as it proved itself and the system operator gained confidence in it.

Ratepayers benefit as well because new cost-reducing and reliability-improving technologies get introduced much more quickly. Technology also is tested in a way that does not jeopardize system reliability. Regulators perform their historic task of acting for ratepayers and assessing when benefits likely will exceed costs and approving worthwhile demonstrations. Ratepayers assume the reasonable risk of funding promising test programs.

Technology investors benefit, too. They can move incrementally toward full-scale deployment. They need not overcome all technical and market-rule obstacles. Instead, they can focus on technical viability. Similarly, T&D companies benefit. They too can focus on technical implementation and getting the technology right. Both are guaranteed cost recovery (assuming the technology performs competently).

The technology may migrate to the competitive market once the system operator is satisfied that it is technically proven and that there is sufficient potential resources to warrant going to the effort to change any market or reliability rules. Alternatively, it may be more appropriate for the technology to remain a regulated T&D asset.

Urgent Need

The supply of dynamic reactive power has been dwindling over the last few years for a number of reasons: (1) generators are being purchased with lower reactive support capability; (2) system planners are relying more on capacitor banks instead of the more expensive dynamic reactive sources; and (3) increased energy transfer levels absorb higher levels of reactive power.

The reactive power supplied by capacitors decreases with the square of voltage, however, and the dynamic response of capacitors is problematic under a disturbance. Excessive use of capacitors can aggravate the imbalance of reactive power and can actually become one of the causes of voltage collapse. Dynamic reactive power reserves from generation increases as voltage decays, and are the most reliable means for voltage stability enhancement.

Reactive power does not flow long distances from a source, especially during times of system stress. Reactive power absorption on transmission lines increases with the square of the flow. Additionally, existing reactive power reserves tend to be lumped together. If reactive power is supplied from resources that are evenly spread across the control area, congestion from contingency planning could be greatly relieved.

Reactive reserves provided from local generation reduce reactive losses resulting from increased active power transfer. In addition, distribution losses are the largest percentage of total system losses, comprising about 27 percent of total losses. When reactive power is supplied from DER, losses on the distribution feeder can be reduced, and local power quality can also be significantly improved.

Reactive power markets are developing both in the United States and in Europe. In general, generators are paid for providing reactive power based on the amount of revenue they lose from lost generation sales and for having the capacity available. In Australia, providers