Optimal Reactive Power Compensation in a deregulated distribution network

In this paper, optimal capacitor placement problem in deregulated medium-voltage distribution network has been reformulated. In a deregulated distribution network, the distribution grid operator can consider reactive power energy as a service that can be sold to the transmission system . Then, optimal locating and sizing of capacitor banks is determined with the objective of loss reduction and maximum return on investment (ROI) from reactive energy selling to transmission system. This problem is influenced with economic values of reactive energy, costs of capacitors, distribution lines and transformer losses. Genetic algorithm is used as optimization technique in this paper. After running genetic algorithm for any step of reactive power economic value, when return of investment (ROI) index increases and changes from negative values to positive values, the threshold value of reactive power price is worked out. The increasing of ROI index as the reactive energy price is reasonable until the network losses is less than losses before compensation.