Assessment the potential of suppliers to exercise market power in Reactive Power markets

Market power refers to the ability of suppliers to alter prices above competitive levels. Market power problems are more complicated in reactive power markets than those in other markets due to the specific properties of this ancillary service. This paper analyzes and investigates market power in reactive markets. A new index for assessment of the potential of reactive suppliers to exercise market power is presented in this paper. Reactive Must Procurement (RMP) is the minimum capacity which must be provided by a reactive resource (whether in generation or absorption mode) to supply reactive requirements of system considering generation and transmission constraints. At another section of this paper some methods for management of reactive power markets are proposed and are compared with each other. The IEEE 57-bus system is analyzed to illustrate the proposed index and suggested market management methods.