Wheeling rates of reactive power flow under marginal cost pricing

Wheeling is the transmission of electrical power and reactive power from a seller to a buyer through a transmission network owned by a third party. The wheeling rate is an area of intense research in view of increased deregulation. This paper uses a wheeling rate based on marginal cost pricing and implemented using a modification of the optimal power flow (OPF). A case study based on the IEEE 30-bus system illustrates the magnitudes and ranges that wheeling rates might have in different circumstances. Special attention is paid to reactive wheeling, which cannot be analyzed with a DC model used by previous authors. The ratio of wheeling rates between real and reactive flow shows the importance of the latter. The paper also discusses the significance of this for the trade-off between paying for reactive wheel or investing in compensating plant.>