IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v312y2022ics0306261922000010.html
   My bibliography  Save this article

A social cost benefit analysis for the procurement of reactive power: The case of Power Potential

Author

Listed:
  • Anaya, Karim L.
  • Pollitt, Michael G.

Abstract

This paper quantifies the benefits of introducing reactive power markets that promote the participation of distributed energy resources (DER) in a coordinated way, between the electricity system operator and the electricity distribution utilities. The contribution that DER could make by displacing conventional network assets in supplying reactive power support is evaluated in the context of a case study, the Power Potential (PP) project in Great Britain. We discuss the rising need for absorptive (leading) reactive power in the PP trial area, driven by the rapid connection of renewable generation in an area of low demand growth. A social cost benefit analysis (SCBA) is performed to quantify the net benefits, with sensitivities regarding bid prices, % of DER participation, time horizons. Price information from the PP live trial conducted between January and March 2021 is also used to evaluate the robustness of the SCBA and to estimate benefits using actual prices. Our results suggest that energy consumers could save from 8 to 21% of business as usual asset costs by 2050. The introduction of actual bid prices increases these savings by around 3% of business as usual asset costs out to 2050. Potential sources of additional benefits on top of those identified in the SCBA are also discussed.

Suggested Citation

  • Anaya, Karim L. & Pollitt, Michael G., 2022. "A social cost benefit analysis for the procurement of reactive power: The case of Power Potential," Applied Energy, Elsevier, vol. 312(C).
    • Handle: RePEc:eee:appene:v:312:y:2022:i:c:s0306261922000010
    DOI: 10.1016/j.apenergy.2022.118512
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261922000010
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2022.118512?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anaya, Karim L. & Pollitt, Michael G., 2020. "Reactive power procurement: A review of current trends," Applied Energy, Elsevier, vol. 270(C).
    2. Gandhi, Oktoviano & Zhang, Wenjie & Rodríguez-Gallegos, Carlos D. & Verbois, Hadrien & Sun, Hongbin & Reindl, Thomas & Srinivasan, Dipti, 2020. "Local reactive power dispatch optimisation minimising global objectives," Applied Energy, Elsevier, vol. 262(C).
    3. Karim L. Anaya & Michael G. Pollitt, 2021. "How to Procure Flexibility Services within the Electricity Distribution System: Lessons from an International Review of Innovation Projects," Energies, MDPI, vol. 14(15), pages 1-26, July.
    4. Ahmadimanesh, A. & Kalantar, M., 2017. "A novel cost reducing reactive power market structure for modifying mandatory generation regions of producers," Energy Policy, Elsevier, vol. 108(C), pages 702-711.
    5. Rabiee, A. & Shayanfar, H. & Amjady, N., 2009. "Multiobjective clearing of reactive power market in deregulated power systems," Applied Energy, Elsevier, vol. 86(9), pages 1555-1564, September.
    6. Zubo, Rana H.A. & Mokryani, Geev & Abd-Alhameed, Raed, 2018. "Optimal operation of distribution networks with high penetration of wind and solar power within a joint active and reactive distribution market environment," Applied Energy, Elsevier, vol. 220(C), pages 713-722.
    7. Biswas (Raha), Syamasree & Mandal, Kamal Krishna & Chakraborty, Niladri, 2016. "Pareto-efficient double auction power transactions for economic reactive power dispatch," Applied Energy, Elsevier, vol. 168(C), pages 610-627.
    8. Anaya, Karim L. & Pollitt, Michael G., 2015. "Options for allocating and releasing distribution system capacity: Deciding between interruptible connections and firm DG connections," Applied Energy, Elsevier, vol. 144(C), pages 96-105.
    9. Sidhu, Arjan S. & Pollitt, Michael G. & Anaya, Karim L., 2018. "A social cost benefit analysis of grid-scale electrical energy storage projects: A case study," Applied Energy, Elsevier, vol. 212(C), pages 881-894.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Davi-Arderius, Daniel & Jamasb, Tooraj & Rosellon, Juan, 2024. "Network Operation and Constraints and the Path to Net Zero," Working Papers 8-2024, Copenhagen Business School, Department of Economics.
    2. Utama, Christian & Meske, Christian & Schneider, Johannes & Ulbrich, Carolin, 2022. "Reactive power control in photovoltaic systems through (explainable) artificial intelligence," Applied Energy, Elsevier, vol. 328(C).
    3. Davi-Arderius, Daniel & Schittekatte, Tim, 2023. "Carbon emissions impacts of operational network constraints: The case of Spain during the Covid-19 crisis," Energy Economics, Elsevier, vol. 128(C).
    4. Davi-Arderius, Daniel & Schittekatte, Tim, 2023. "Environmental Impacts of Redispatching in Decarbonizing Electricity Systems: A Spanish Case Study," Working Papers 1-2023, Copenhagen Business School, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karim Anaya & Michael Pollitt, 2021. "An evaluation of a local reactive power market: the case of Power Potential," Working Papers EPRG2124, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Anna Pechan & Marius Buchmann, 2023. "Market design for the procurement of reactive power: the current state in Germany," Bremen Energy Working Papers 0046, Bremen Energy Research.
    3. Jay, Devika & Swarup, K.S., 2021. "A comprehensive survey on reactive power ancillary service markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    4. Ahmadimanesh, A. & Kalantar, M., 2017. "A novel cost reducing reactive power market structure for modifying mandatory generation regions of producers," Energy Policy, Elsevier, vol. 108(C), pages 702-711.
    5. Hennig, Roman J. & de Vries, Laurens J. & Tindemans, Simon H., 2023. "Congestion management in electricity distribution networks: Smart tariffs, local markets and direct control," Utilities Policy, Elsevier, vol. 85(C).
    6. Karim L. Anaya & Michael G. Pollitt, 2021. "The Role of Regulators in Promoting the Procurement of Flexibility Services within the Electricity Distribution System: A Survey of Seven Leading Countries," Energies, MDPI, vol. 14(14), pages 1-25, July.
    7. Karim L. Anaya & Michael G. Pollitt, 2021. "How to Procure Flexibility Services within the Electricity Distribution System: Lessons from an International Review of Innovation Projects," Energies, MDPI, vol. 14(15), pages 1-26, July.
    8. Rodríguez-Gallegos, Carlos D. & Vinayagam, Lokesh & Gandhi, Oktoviano & Yagli, Gokhan Mert & Alvarez-Alvarado, Manuel S. & Srinivasan, Dipti & Reindl, Thomas & Panda, S.K., 2021. "Novel forecast-based dispatch strategy optimization for PV hybrid systems in real time," Energy, Elsevier, vol. 222(C).
    9. A.S. Jameel Hassan & Umar Marikkar & G.W. Kasun Prabhath & Aranee Balachandran & W.G. Chaminda Bandara & Parakrama B. Ekanayake & Roshan I. Godaliyadda & Janaka B. Ekanayake, 2021. "A Sensitivity Matrix Approach Using Two-Stage Optimization for Voltage Regulation of LV Networks with High PV Penetration," Energies, MDPI, vol. 14(20), pages 1-24, October.
    10. Lechón, Y. & de la Rúa, C. & Rodríguez, I. & Caldés, N., 2019. "Socioeconomic implications of biofuels deployment through an Input-Output approach. A case study in Uruguay," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 178-191.
    11. Zhou, Yu & Li, Zhengshuo & Wang, Guangrui, 2021. "Study on leveraging wind farms' robust reactive power range for uncertain power system reactive power optimization," Applied Energy, Elsevier, vol. 298(C).
    12. Davi-Arderius, Daniel & Schittekatte, Tim, 2023. "Carbon emissions impacts of operational network constraints: The case of Spain during the Covid-19 crisis," Energy Economics, Elsevier, vol. 128(C).
    13. Sun, Wei & Harrison, Gareth P., 2019. "Wind-solar complementarity and effective use of distribution network capacity," Applied Energy, Elsevier, vol. 247(C), pages 89-101.
    14. Dong, Hanjiang & Zhu, Jizhong & Li, Shenglin & Wu, Wanli & Zhu, Haohao & Fan, Junwei, 2023. "Short-term residential household reactive power forecasting considering active power demand via deep Transformer sequence-to-sequence networks," Applied Energy, Elsevier, vol. 329(C).
    15. Muhammad, Yasir & Khan, Nusrat & Awan, Saeed Ehsan & Raja, Muhammad Asif Zahoor & Chaudhary, Naveed Ishtiaq & Kiani, Adiqa Kausar & Ullah, Farman & Shu, Chi-Min, 2022. "Fractional memetic computing paradigm for reactive power management involving wind-load chaos and uncertainties," Chaos, Solitons & Fractals, Elsevier, vol. 161(C).
    16. Jayesh Thaker & Robert Höller, 2023. "Evaluation of High Resolution WRF Solar," Energies, MDPI, vol. 16(8), pages 1-13, April.
    17. Quan, Junlong & Kim, Se-Heon & Kim, Ju-Hyung, 2018. "A study on probabilistic social cost–benefit analysis to introduce high-efficiency motors into subway station ventilation," Energy Policy, Elsevier, vol. 121(C), pages 92-100.
    18. Jerzy Andruszkiewicz & Józef Lorenc & Agnieszka Weychan, 2023. "Determination of the Optimal Level of Reactive Power Compensation That Minimizes the Costs of Losses in Distribution Networks," Energies, MDPI, vol. 17(1), pages 1-24, December.
    19. Bielecki, Sławomir & Skoczkowski, Tadeusz, 2018. "An enhanced concept of Q-power management," Energy, Elsevier, vol. 162(C), pages 335-353.
    20. Pollitt, M. G., 2023. "Locational Marginal Prices (LMPs) for Electricity in Europe? The Untold Story," Cambridge Working Papers in Economics 2352, Faculty of Economics, University of Cambridge.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:312:y:2022:i:c:s0306261922000010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.