Determination of the Optimal Level of Reactive Power Compensation That Minimizes the Costs of Losses in Distribution Networks

The objective of the presented paper is to verify economically justified levels of reactive energy compensation in the distribution network in the new market conditions, including the extensive use of smart metering systems, new types of load, or distributed generation. The proposed methodology is based on the minimization of annual costs of losses caused by the flow of reactive energy to the supplied loads through the equivalent resistance of the distribution system determined on the basis of statistical energy losses in this network. The costs of losses are compared to the costs of using compensating devices expressed by the levelized costs of reactive energy generation. The results are the relations describing the optimal annual average value of the tgφ factor to be maintained by customers to optimize the cost of loss of the distribution network caused by reactive energy flows. The dependence of the optimal tgφ value on the analyzed load and network parameters is also discussed. The resulting optimal tgφ levels should be considered in the tariffication process of services offered by distribution system operators to improve capacity and limit the costs of power network operation due to reactive energy transmission.