806
4, NOVEMBER 2001
Practical Cost-Based Approach for the Voltage
Ancillary Service
Edson Luiz da Silva, Senior Member, IEEE, Jonathan J. Hedgecock, Member, IEEE,
João Carlos O. Mello, Member, IEEE, and João Carlos Ferreira da Luz
Abstract—The restructuring and deregulation of the electricity
sector most noticeably involves the introduction of competition
into energy supply. In parallel with this, however, there is an
increasing desire amongst transmission system operators, gener-
ators and consumers for commercial principles to be applied to
transmission services, including the provision of voltage support
and reactive power control. The identification of the costs of
providing such services is an important first step toward devel-
oping a transmission services market. Implementing a payment
structure based on the remuneration of incurred costs can be an
attractive option to commercial power sector players, who wish
such costs to be recoverable at an appropriate rate of return, and
system operators, who need to be assured of the availability of the
necessary services. This paper addresses both the principles and
practical issues involved in developing cost-based payments for
reactive power, with reference to the ongoing restructuring of the
Brazilian power sector.
Index Terms—Ancillary services, deregulation, reactive power,
transmission services, voltage support.
I. INTRODUCTION
T HE RESTRUCTURING of the electricity sector interna-
tionally is perhaps most obviously characterized by major
reorganization of the commercial arrangements under which
energy is traded. The deregulation of electricity generation
and retailing inevitably, however, introduces new paradigms
to the planners and operators of transmission systems. In
particular, special arrangements are required for dealing with
ancillary services, i.e., services such as spinning reserve, ready
reserve, black-start capacity and voltage support, which are
essential for the operation of the transmission network but
which cause sector agents to incur costs in their provision
which are not readily identifiable within energy tariffs [1]–[3].
If these services are to continue to be made available in
sufficient quantity to system operators, there are essentially
two alternative approaches which can be adopted—either
Manuscript received November 2, 1999; revised May 21, 2001. The work
described was carried out under the auspices of a consultancy assignment led by
PricewaterhouseCoopers. E. L. daSilva was supported by CNPq. Concepts and
methodologies presented in this paper do not necessarily represent the position
of the Brazilian ONS on this subject. Errors or omissions contained in this work
are the sole responsibilities of the authors.
E. L. da Silva is with the Federal University at Santa Catarina, Florianópolis,
SC, Brazil (e-mail: edson@labplan.ufsc.br).
J. J. Hedgecock is with Power Planning Associates, UK (e-mail:
jonathan@powerplanning.com).
J. C. O. Mello is with Administradora dos Serviços do Mercado Atacadista
de Energia, BR (e-mail: joao@cepel.br).
J. C. F. da Luz is with Operador Nacional do Sistema Elétrico, BR (e-mail:
joaoluz@ons.org.br).
Publisher Item Identifier S 0885-8950(01)09437-8.
0885–8950/01$10.00 © 2001 IEEE
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 16, NO.
the introduction of tight technical regulations which require
sector players to provide ancillary services, or the creation of
a commercial environment which encourages the providers of
the service through appropriate payments, as well as recovering
the corresponding revenue from transmission system users.
In this paper, we address both sides of the problem: i) how
to pay the voltage support providers; and ii) how to allocate
the incurred costs to the users. We address specifically the
voltage support problem, which we discuss in the context of the
ongoing restructuring of the Brazilian electricity sector. The
Brazilian electricity transmission system is characterized by
long transmission distances and significant levels of inductive
demand, the combination of which leads to significant voltage
control problems, which need to be addressed in the technical
and commercial arrangements for the restructured electricity
sector. This paper is organized as follows: Section II presents
a description of the problem of voltage control in modern
transmission systems. Section III identifies the costs associated
for providing voltage support from the range of sources which
is typically available. Section IV addresses the question of what
sort of commercial arrangements are appropriate for incen-
tivizing the production/absorption of reactive power. Section V
presents the initial experience in developing recommendations
for cost-based reactive power payments in Brazil, and Section
VI draws some conclusions from this work.
II. PROBLEM DESCRIPTION
A. Background
The control of the voltage profile of modern Electrical En-
ergy Systems (EESs) is a complex task and expensive, due to
the fact that increasingly these systems are being operated close
to their technical limits. Up to now, due to the vertical structure
of the electricity companies, there has been little need to iden-
tify the costs incurred for providing voltage support. In the UK
and elsewhere, there has been rapid evolution toward a market
approach to the provision of reactive power. In those countries
whose power sectors are at earlier stages of unbundling, how-
ever, the continued provision of voltage control services can per-
haps best be ensured by:
• implementing appropriate technical regulations to require
the provision of minimum levels of reactive power from
key sources (particularly generation);
• identifying accurately all the costs which are incurred by
providers of reactive power, in order to set up commercial
arrangements for recovering these costs in a transparent
way.
DA SILVA et al.: PRACTICAL COST-BASED APPROACH FOR THE VOLTAGE ANCILLARY SERVICE
As the deregulated industry matures and sector players be-
come more attuned to the commercial opportunities of partic-
ipating in reactive power production, so the development of
market based approaches can be pursued.
B. Services Provided
The consumption and production of reactive power typically
provides the following functions:
• increasing the power transfer limit between areas of the
system;
• controlling the voltage profile steady state conditions; and
• controlling the voltage profile during transients.
Depending on the objective, the specific type of compensa-
tion component used, as well as the operating regime, will differ.
Thus, while a synchronous compensator is used and must op-
erate in a way that will provide a reserve of reactive power
for controlling fast excursions of voltage during contingencies,
switched shunt capacitors are used for controlling the voltage
profile under longer term regimes.
It can be seen that both functions are of vital importance to
the system. However, in the former case, the synchronous com-
pensator may “float” on the system, not actually supplying or
absorbing reactive power, for significant periods of time. In the
latter case, the supply or absorption of reactive power is more
continuous. As we shall see, this difference in the nature of
the service provided by compensation equipment can have pro-
found implications for the basis which it is appropriate to use
for measuring and remunerating their performance. In addition
to synchronous compensators, static compensators and genera-
tors can also be regarded as sources of reactive power reserve.
The provision of equipment to cover all of these functions incurs
investment costs as well as operating and maintenance costs;
working from these costs, commercial arrangements for voltage
support can therefore be established. Another possibility for es-
tablishing a commercial arrangement to govern voltage sup-
port service consists of determining nodal prices for reactive
power. These prices are calculated using optimal power flow
techniques, which have as their objective the minimization of
generating costs. Under this procedure, the nodal price of reac-
tive power is derived from the sensitivity of generating cost to
the marginal increase of reactive power at a specific system bus
[4]. This procedure does not, however, recognize the costs of
voltage support offered by the compensation equipment during
transient system conditions.
With these considerations in mind, we return to incurred costs
as the basis for establishing at least an interim structure of pay-
ments to the providers of reactive power as an ancillary service
[5]. Thus, in the following presentation, explicit and implicit
costs for each type of component included in an electric power
system are examined.
III. COST IDENTIFICATION
A. Cost Classification
In order to provide voltage support, equipment owners incur
costs that can be classified into two categories:
i) explicit or direct costs; and
ii) implicit or indirect costs.
807
Fig. 1. Typical loading capability of a hydrogenerator.
The explicit costs include the fixed costs represented by the
costs of capital and administration and the variable costs asso-
ciated with scheduled maintenance and operating costs.
The implicit costs can be classified as variable and corre-
spond any loss of profit which arises as a result of producing
reactive power.
In the following Section III-B, for each component with the
capacity to supply voltage support to the system, the respec-
tive variable costs are identified. Fixed costs are considered in
Section III-C.
B. Variable Costs
1) Generator Producing Real Power: Ideally, a generator
should produce real power at its rated power factor so that its
productive capacity is completely used, thus maximizing its
profit. However, due to system requirements, it is possible that
the generator would have to reduce its real power in order to
produce reactive power. This fact is illustrated in Fig. 1, in
which a typical loading capability diagram is shown.
In this situation, the generating cost of reactive power corre-
sponds to the real power profit that can not be achieved, reduced
by its generating cost during the period, divided by the reactive
power produced:
kVARh
where
opportunity cost of reactive power;
energy price;
reduction of real power;
period in which the production capacity of real
power is reduced,
operating cost during the period of real power
reduction;
(kVARh) reactive power produced.
To provide the correct incentive for the production of reac-
tive power, a generator prevented from producing an economic
quantity of real power should not suffer a loss of profit. There-
fore, a mechanism is needed to enable the opportunity costs
arising from a reduction in generation to be recovered through
the wholesale energy market.
808
Fig. 2. Typical operation of a hydrogenerator.
This mechanism can be implemented using an ex-post
approach in which the current production per hour ( ) is
compared with the unconstrained output ( ) that the generator
would have produced if it was not instructed to reduce its pro-
duction in order to control the voltage. can be obtained using
a single bus dispatch using load and generators availabilities
verified in the operation.
As an example, consider that a generator made a bid of
U$25/MWh to the market operator, in a market where the
marginal energy price is U$40/MWh. Furthermore, suppose its
unconstrained output, over a period of 3 hours, is 400 MW but,
in order to control the voltage, the system operator instructed
it to reduce its output at 350 MW for that period, increasing
reactive power injection by 20 MVAr. Then the opportunity
cost of this constrained operation can be calculated by:
U MVArh
2) Generator Operating as a Synchronous Compen-
sator: Frequently, particularly in Brazil, generators run as
synchronous compensators and, under this condition, they
consume real power from the system. This type of operation
typically takes place during periods of minimum load, when
there is an excess of reactive power that must be absorbed as
a way of controlling the voltage profile. A hydro generator
operating as a synchronous compensator in these conditions
typically has no opportunity costs, because the system is under
minimum load and it may not therefore have been dispatched
other than for the absorption of reactive power. Thus, the
generator incurs only the following explicit costs:
• the supply of energy to pumps that are responsible for
eliminating water from the interior of the turbine; and
• energy losses arising in the generating unit due to winding
losses, friction, windage etc.
In order to analyze these losses, first consider the Figs. 2 and
3, where the operation of a typical hydro plant of the Brazilian
system is shown. Fig. 2 shows the average real and reactive
power values per hour. From this, we observe that the generator
is operating as a synchronous compensator in early morning, a
time period which is detailed in the later figure. An important
point is illustrated in the detail of Fig. 3: the real power absorbed
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 16, NO. 4, NOVEMBER 2001
Fig. 3. Hydrogenerator operating as a synchronous compensator.
is virtually constant (i.e., independent of the level of reactive
power absorbed).
3) Switched Shunt Capacitors and Reactors: Variable costs
of this equipment are limited to those incurred for energy losses
and for depreciation resulting from switching operations.
Losses in shunt reactors, however small they may be as
a percentage of the reactive rating of the equipment, can be
significant. Consider, for instance, a reactor of 150 MVAr, for
which losses may typically be around 160 kW. This level of
losses is equivalent to the consumption of many small industrial
consumers.
The frequency of switching is an important issue to be con-
sidered on the analysis of the problem because it may influence
not only the lifetime of the equipment itself, but also the circuit
breakers.
This occurs due to the overvoltage that appears during the
opening operation of reactors and the closing operation of
capacitors. The usual procedure for avoiding premature depre-
ciation of the equipment has been to install a synchronizing
device connected to circuit breakers. In addition, for reactors, a
surge-arrester of ZnO is installed in parallel. The synchronizing
device coordinates the opening and closing of the circuit
breaker at the instant in which the current is practically zero.
A surge-arrester of ZnO is able to limit the overvoltage to the
reactor.
Taking into consideration that equipment could be installed
according to technically regulated specifications, this type of
premature depreciation could be averted and the financial im-
plications limited to the difference in capital cost arising from
the modified equipment design. Thus, the depreciation requiring
consideration as a variable operating cost may be restricted only
to circuit breakers.
Depending on the location of compensation equipment within
the transmission system, the frequency of switching can be sig-
nificant. A circuit breaker for a switched shunt reactor or capac-
itor is submitted to a general review after a specified number of
opening/closing cycles has occurred, after which the equipment
is completely refurbished; it is therefore possible evaluate the
costs of each switching from the costs of refurbishment.
4) Synchronous Compensator: As we have seen, a syn-
chronous compensator may be considered to be a source of
reactive power reserve, whose main function is to control the
voltage profile during transient periods. In order to achieve this
aim, a synchronous compensator is usually operating at a near
zero reactive power level.
DA SILVA et al.: PRACTICAL COST-BASED APPROACH FOR THE VOLTAGE ANCILLARY SERVICE 809

A synchronous compensator can also be used to control TABLE I

voltage under normal operating conditions in order to increase TYPICAL DATA FOR A HYDROGENERATOR
the static stability limit between areas and, consequently,
allow an increase in power exchange between them. For its
operation, it requires real power to compensate for losses
caused by reactive power that is being produced or consumed,
rotational losses, etc. For practical purposes these losses may
be considered constant, reaching amounts about 1–2% of the
rating.
Considering that synchronous compensators are sources of
reactive power reserves, they tend to be continuously attached to
the system when in operation and only disconnected for main-
Considering that it is necessary to have a fund to compensate
tenance purposes. Thus, costs incurred by start-up procedures
for the generator depreciation, the annual revenue ( ) is calcu-
can be ignored.
lated as follows:
5) Static Compensator: Similar to a synchronous compen-
sator, the static compensator has as its main function the con-
trolling of the voltage profile during transient periods. Thus, it
can also be considered as a source of reactive power reserves.
Losses are dependent largely on the reactive power that is being
produced or consumed by it, and arise in transformer windings,
cables, reactor winding losses, etc. Given that the switching
US per year
mechanism of a static compensator is made up of solid state
components, the switching operation does not cause a reduction
The annual cost per kVA is calculated by
in useful life.
6) On-Load Tap Changers—LTCs: LTCs are used for con-
US kVA year US kVA year
trolling the system voltage profile and, according to the ideas
presented in this paper, could be considered as providers of
Using the power triangular relationship among kVA, kW and
ancillary services. The maintenance frequency and hence the
kVAR, the annual cost per kVAR is calculated by
running costs of an LTC are dependent on the number of op-
erations performed by it during a given period. Given that the
US kVAr year US kVAr year
LTC is effectively a component part of the transformer, and that
this equipment will typically be installed in accordance with
There are a number of simplifications inherent in this approach,
technical specifications defined by the ISO, we suggest that
since it is assumed that the vector relationship between real and
it is more appropriate to consider LTCs as integral elements
reactive power is mirrored in the buildup of the capital costs
of the transmission system. The costs associated with LTCs
of the generating plant. In practice, a degree of correction may
can therefore be included in the fixed costs of the transmission
need to be applied to reflect more accurately the actual changes
system. Thus, we propose that under the definitions developed
in plant capital costs associated with more lagging power factor
in this paper, LTCs will not be considered as ancillary services
operation (e.g., the higher conductor costs associated with in-
providers.
creased currents and excitation levels). Further work is required
to refine the triangular cost/power factor relationship, with ref-
C. Fixed Costs erence to actual plant costs. Another possibility would be to use
the replacement cost concept (proxy cost). Under this concept,
the capacity cost per kVAr between a typical synchronous com-
Costs of equipment for providing reactive support depend on
pensator and a typical generator would be used as the reactive
the manufacturer and the type of technology that is used. Typical
power capacity cost. This methodology would take the devel-
cost data has been obtained from out-turn project costs encoun-
opment of payments for reactive power a step closer toward a
tered in Brazil, and can similarly be derived for other systems.
market approach, since reactive power produced by an existing
All reactive compensation equipment has the exclusive function
ancillary services provider (ASP) would be valued on the basis
of providing voltage support to the system. For generators, how-
of the avoided cost of building a new installation. This would,
ever, this is not the case. Thus, it is necessary to separate the
however, represent a departure from the truly cost-reflective
costs associated with the real and reactive power, respectively.
methodology which is the subject of this paper.
Assuming that the cost of current generators can be consid-
ered as an adequate reference, we can identify an average cost
IV. DEFINITION OF PAYMENTS
of (R$/kVA/rpm) or (R$/kVA/poles), then relate it to kW and
kVAR This computation should be made considering the opera- Commercial arrangements for remunerating the providers
tion under nominal ratings, such as shown in the following. For of reactive power in large transmission systems need to take
instance, consider a hydrogenerator for which relevant details into account a number of specific considerations, if they are to
are presented in Table I. encourage adequate levels of VAr production. The key issues
810
which need to be considered from the transmission network
perspective are:
• the potential for wide regional variations in the need for
reactive power on the transmission network;
• the substantial daily variations in the requirements for
reactive power and energy which can arise, both from the
nature of the system demand and the way in which system
voltages are controlled;
• the flexibility which may be required in sources of reac-
tive power, enabling both VAr production and VAr absorp-
tion at different times of the day and in varying quantities;
and
• the extent to which problems of voltage control are ex-
acerbated by long transmission distances (such as those
encountered in Brazil), with the result that localized VAr
control is a clear requirement.
From the commercial perspective of the ancillary services
provider (ASP), the principal concerns are:
• to recover the fixed and variable costs associated with the
installation, operation and maintenance of the relevant re-
active compensation facilities (including those elements
of the costs of generator operation which are attributable
to providing voltage control services); and
• to make a reasonable return on the actual costs incurred in
providing voltage control services, either through a regu-
lated income stream or within the context of a free market
for ancillary services.
All of these points have implications for the commercial de-
velopment of Ancillary Services, which we now discuss.
A. Structure of Payments to ASPs
As we demonstrated in Section III, the costs incurred by
ASPs, and hence the amounts which they receive under any
cost-related payment structure, ultimately need to distinguish
between the fixed and variable costs associated with the
various devices. The most straightforward way of relating these
costs to a structure of payments to be made by transmission
system users (or, practically, the ISO on the users’ behalf) to
ASPs would be:
• to relate fixed costs to a capacity payment, based on the
availability of a given MVAr of reactive power production
capability; and
• to link variable costs to a utilization payment, where the
utilization payment itself is calculated as a function of the
explicit or implicit costs incurred.
The main problem associated with relating payments to
device utilization is that of measuring the quantities necessary
to enable payments to be calculated. This issue is particularly
relevant in relation to metering, since the measurement of
MVArh output for each fixed or switched reactor and capacitor
bank, static var system, synchronous compensator, and gen-
erator, could necessitate a substantial investment in metering
equipment and the associated data collection and transmission
facilities.
Analyzing the findings reported in Section III indicates that
some simplifications can be made to the quantities which would
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 16, NO. 4, NOVEMBER 2001
require monitoring to obtain a reasonably accurate picture of the
variable costs to which ASPs are exposed. For example:
• payments in respect of generators acting as synchronous
compensators, or relating to bespoke synchronous
compensation plant, may be calculated on the basis of
operating time and/or active power consumption, rather
than metered production or absorption of reactive power.
The active power demand of these machines (together
with various maintenance costs) is more closely related
to running time than to reactive power production; and
• certain categories of equipment, such as fixed line reactors
which are permanently connected to transmission lines,
on-load tap changers, etc., may be regarded as basic items
of transmission system equipment, and remunerated in the
same way as other transmission line and substation plant,
rather than defined as ancillary services equipment.
Nevertheless, in the initial stages of introducing Ancillary
Services payments into a newly-restructured electricity sector,
capability payments are likely to provide the most straight-
forward means of commercializing the provision of Ancillary
Services. Regulatory provisions need to ensure, however, that
the option for evolution toward greater sophistication, including
utilization payments, is left open.
B. Payments by Consumers
In order to overcome the locational issues affecting reactive
power control, commercial mechanisms must, in parallel with
technical regulatory requirements, ideally:
• provide incentives for generators located close to demand
centers to participate to a full extent in voltage control; and
• encourage (or penalize) the correction (or lack of correc-
tion) of power factors locally within distribution networks
as far as is practicable.
In addition to remunerating generators directly connected to
the transmission network for the production of reactive power,
therefore, it can be appropriate to consider mechanisms for
paying embedded generators (i.e., those connected at distribu-
tion voltage levels) for the provision of reactive power locally.
Two possible approaches can be considered to providing
economic signals to distribution (D) companies to invest in
power factor correction; either:
• the inclusion of embedded generation in the calculation
process for determining payments to generators for reac-
tive power; or
• the incentivization of distribution companies to contract
for reactive power from embedded generators, by means
of the application of a charge on these companies for me-
tered reactive take from the transmission system. Distrib-
utors are thereby be encouraged to improve power factors
at the interface with the transmission system, either by the
provision of compensation equipment themselves or by
negotiation with embedded generators.
Charging D companies on the basis of their metered con-
sumption of reactive energy offers significant attractions in
terms of sending accurate signals to those companies which
need to invest in power factor correction most urgently as
DA SILVA et al.: PRACTICAL COST-BASED APPROACH FOR THE VOLTAGE ANCILLARY SERVICE
TABLE II
SUMMARY OF KEY ASP PAYMENTS PROPOSED IN BRAZIL
a means of contributing to overall system efficiency. This
Reactive Charge should ideally be derived by examining the
proportion of the reactive energy which is required on the
system which is specifically associated with demand, rather
than inherent transmission (T) network requirements. This
can be done analytically by evaluating in broad terms the
approximate proportion of the reactive requirements of the
system which is associated with reactive power losses in
transmission lines, and subtracting this from the total system
reactive requirement. The balance may be categorized as that
reactive energy which is required to supply the reactive de-
mands associated with D systems and T connected consumers.
A flat rate reactive charge can therefore be applied to D com-
panies and T-connected consumers to cover the component of
system compensation costs which is genuinely attributable to
the impact of their MVArh consumption. This charge would be a
fixed figure of US$/MVAr h irrespective of the regional location
of the demand, reflecting the localized nature of much reactive
power provision at this level. The charge would be developed
on the basis of a representative combination of reactive power
sources being used to supply D companies and T-connected
consumers’ requirements.
The regional variations in reactive power requirements which
can arise on interconnected transmission systems can to some
extent be addressed by the introduction of measures to promote
the provision of reactive power at the distribution level. Beyond
this, it is important that the ISO has the flexibility to decide
whether to contract for reactive support from generators, or to
invite tenders for new compensation plant, at specific locations,
to ensure that the transmission system can operate satisfactorily.
In a cost-based payment scheme, ASPs should only be entitled
to payments which vary geographically if it can be demonstrated
that the costs of installing and/or operating equipment in one
location differ from those at another.
Superimposed on any system- and demand-related geo-
graphical variations the demand for reactive power, seasonal
811
and time of day variations can also be encountered, which vary
in different regions of the system. These can lead to maximum
reactive demand from consumers arising at times when the
transmission system is already stressed, either in intermediate
or peak active demand conditions, leading to the exacerbation
of voltage control problems. Time-based variations should not
have any relevance to cost-based payments to ASPs, however
they may usefully be considered in relation to the differentiation
of reactive tariffs which may be applied to D companies or
large consumers as a means of managing the growth in reactive
demand.
Finally, it can be argued in developing charges to D compa-
nies and T-connected consumers that it would be preferable to
charge for lagging reactive consumption across the full range
of power factors from unity downwards, and to leave the con-
sumers/companies to decide on the economic level of compen-
sation to install in their systems. This is likely to prove less
arbitrary than prescribing an “optimum” power factor through
the adoption of a “dead-band” around unity power factor within
which no charges would be payable.
V. PRACTICAL IMPLEMENTATION
Building on the principles described above, the authors have
been involved in the development of preliminary proposals for
the implementation of cost-based ancillary services payments
and charges in the restructuring electricity sector in Brazil. The
focus of work which has been carried out to date has been on
the identification of a suitable payment mechanism for remuner-
ating the provision of reactive power by ASPs. A later stage in
the process will consider in detail the provisions for recovering
costs from distribution companies and large consumers on the
basis of actual reactive demand. Payments to ASPs are proposed
for which are based on the principles outlined in Section IV.
Table II shows the basic costs which it is intended will be remu-
nerated under the initial payments scheme, broken down into
the major categories of ancillary service provider.
812
VI. CONCLUSION
The work presented in this paper has been directed at
achieving a workable payment structure for the provision
of voltage control services within the Brazilian electricity
sector, as part of the overall restructuring process. The detailed
implementation of the proposals described is ongoing in the
context of the creation of the wholesale electricity market and
the independent system operator. The principles contained in
the approach presented in this paper are likely to shape the
initial arrangements to be put in place for commercializing the
provision of voltage control services in the privatized Brazilian
power sector, and, as such, they may provide a useful basis for
consideration in other international systems.
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electric power systems,” in V Symposium of Experts in Electrical Op-
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[2] , “Methods and tools for costing ancillary services,” in CIGRE
SC-38, Aug. 1999.
[3] S. Harry and A. Papalexopoulos, “Competitive procurement of ancillary
services by an independent system operator,” IEEE Trans. Power Sys-
tems. PE-427-PWRS-0-06-1998, to be published.
[4] S. Hao and A. Papalexopoulos, “Reactive power pricing and manage-
ment,” in IEEE/PES Winter Meeting, Baltimore, Janeiro, 1996.
[5] J. W. Lament and J. Fu, “Cost analysis of reactive power support,” IEEE
Trans. Power Systems. PE-298-PWRS-0-04-1998, to be published.
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 16, NO. 4, NOVEMBER 2001
Edson Luiz da Silva received the B.Sc. degree from Universidade Federal de
Santa Catarina in 1980, and the M.Sc. and Ph.D. degrees, in 1984 and 1994,
respectively, from the same university, all in electrical engineering. From 1982
to 1991, he developed professional activities in the Operations Department and
in the System Planning Department, of Eletrosul, the Southern Brazilian utility.
Since 1994, he has been developing research activities at Universidade Federal
de Santa Catarina, where he is now a full-time professor. He has been working
on the Brazilian Electric Energy Sector restructuring process and his main fields
of interest are power system planning reliability evaluation, and power system
optimization.
Jonathan J. Hedgecock graduated from Imperial College of Science,
Technology and Medicine in London in 1986, in electrical and electronic
engineering. From 1986 to 1997, he worked with Kennedy & Donkin on a
wide range of transmission system planning and analysis projects, including
power sector restructuring and transmission pricing work in Colombia and
Brazil. Since joining Power Planning. Associates, a UK-based power sector
planning and economics consultancy, as a founder member in 1997, he has
focused on transmission-related privatization, restructuring and planning as-
signments. These have included major work on the development of commercial
arrangements for handling ancillary services in Brazil.
Joã Carlos O. Mello received the B.Sc., M.Sc. and the D.Sc. degrees in elec-
trical engineering from Catholic University of Rio de Janeiro (PUC/RJ) in 1983,
1988, and 1994, respectively. From 1989 to 2000, he was with CEPEL, the
Brazilian Electric Power Research Center. There he worked on projects related
to reliability, expansion and operational planning and competitive markets in
power systems. He is currently responsible for market implementation issues
with the Brazilian electricity market operator, ASMAE.
João Carlos Ferreira da Luz received the B.Sc. degree from Universidade do
Estado do Rio de Janeiro in 1975, in electrical engineering. From 1974 to 1996,
he developed professional activities in the Electrical Operation Planning De-
partment of Eletrobrás and from 1996 to 1998 he was Head of the Technological
Development Division of the same department. He coordinated the Task Force
“Planning” on the Brazilian Electric Energy Sector restructuring process. Since
1998, he is with ONS working in the Transmission Administration.