Synchronous Generators.

Most generators connected to the electricity grid are synchronous generators, meaning that they
operate synchronously at the same electrical frequency. Generator settings can be adjusted to produce
combinations of real power and reactive power. When the generator increases its reactive power
output, its real power capability may need to be reduced if the generator reaches its limits; a
discussion of generator capability limits appears at the end of this chapter. Reactive power supply from
generators requires a minimal additional amount of fuel or real power from the network. The cost of a
generator depends on the capacity, fuel type and voltage level. The reactive power capacity for a
generator is determined by thermal limits. Thermal limits are determined by the thermal properties of
the materials in the generator; if the generator overheats, insulation will degrade and its parts may be
damaged. Because the reactive power constraints in generators are thermal and equipment takes
some time to heat to the point of degradation, generators are designed to provide significantly
increased amounts of reactive power output for short periods. A generator can increase or decrease
reactive power output smoothly and almost instantaneously within its designed capabilities.
Generators have a longer response time if the real power output needs to be adjusted or the generator
is offline; the generator ramp rate and startup time will determine how quickly the generator can
adjust its reactive power output in these situations. Generators have high maintenance costs due to
their moving mechanical parts and cooling systems. There are about 10,000 synchronous generators in
North America with a combined maximum reactive power capacity of 600,000 Mvar5 and maximum real
power capacity of approximately 900,000 MW (but due to generator constraints discussed

Costs. Differences in effectiveness and costs of the different devices dictate that reactive power
generally is provided by a mix of static and dynamic devices. The cost of reactive power service depends
upon the choice of equipment. The costs of satisfying static reactive power demands are much lower
than those of satisfying dynamic reactive power demands. While capital costs tend to dominate, the
costs of providing reactive power also include generator fuel costs, operating expenses and the
opportunity costs from not generating real power. The capital costs of static sources of reactive power,
such as capacitors, are orders of magnitude lower than the capital costs of dynamic sources, such as
generators, SVCs and synchronous condensers. Table 1 shows the speed, voltage support and costs for
the different sources of reactive powers and does not include transformer tap changers. The ability to
support voltage means the ability to produce reactive power when voltage is falling. The availability of
voltage support indicates how quickly a device can change its reactive power supply or consumption.
Disruption is low for devices that can smoothly change reactive power output and high for devices that
cannot change reactive power output smoothly. 16 American Superconductor, www.amsuper.com.
Federal Energy Regulatory Commission Staff Report •February 4, 2005 39 Physical Characteristics and
Costs of Reactive Power in AC Systems

Generator Reactive Power Capability. An electricity generator has two parts. A stator, is the stationary
part of the generator. It is a large cylinder, with slots running lengthwise on the inside. Coils of wire go
through the slots. The field, also known as the rotor, is an electromagnet that rotates inside the stator.
Figure 5 shows a generator stator with a rotor inside (the rotor is sticking out farther than usual for
illustrative purposes). In fast generators, the rotor is made of solid steel; slots are cut into its surface and
coils of wire are wound through the slots. The generator shaft is a rod through the center of the rotor,
and this is connected to the prime mover, which can be a steam, combustion, wind or hydroelectric
turbine. When the turbine spins, the generator rotor spins, and the spinning magnet of the rotor
induces an electric field in the stator wires. The stator is connected to electrical equipment that
transfers electrical power from the generator to the power system. The stator and rotor are enclosed,
and air or compressed hydrogen cools the generator inside the enclosure; some generators have
water pipes installed on the stator for additional cooling.

A generator’s output capabilities depend on the thermal limits of various parts of the generator and on
system stability limits. Thermal limits are physical limits of materials such as copper, iron and insulation;
if the generator overheats, insulation begins to degrade and over time this could result in equipment
damage. Increasing real power output of a generator heats up the armature. Increasing reactive
power output heats up the field windings and the armature. To supply reactive power, the generator
must increase the magnetic field to raise the voltage it is supplying to the power system; this means
increasing the current in the field windings, which is limited by the thermal properties of the metal
and insulation. The field current is supplied by the generator exciter, which is a DC power supply
connected to the generator. The field current can be quickly adjusted by automatic control or with a dial
to change the reactive power supplied or consumed by the generator. Stability limits are determined by
the ability of the power system to accept delivery of power from the connected generator under a
defined set of system conditions including recognized contingencies. All generators connected to a
power system operate at the same electrical frequency; if a generator loses synchronism with the rest of
the system, it will trip offline to protect itself. Current and voltage are both time-varying quantities in
sinusoid waveform; when current lags voltage, it reaches its peak after the voltage, and when current
leads voltage, it peaks before the voltage.

When the generator is supplying reactive power, it has a lagging power factor and its mode of
operation is referred to as overexcited. When a generator consumes reactive power, it has a leading
power factor region and is underexcited.

Regulation for Reactive Power (US)

As to the use of generating facilities, the Commission explained that this service must be unbundled
from basic transmission service and would be considered a separate ancillary service.

To design the reactive power charge, Southern identified six generating components involved in the
production of reactive power: (1) the exciter; (2) the exciter cooling system; (3) generator stator; (4)
rotor; (5) turbine assembly; and (6) step-up transformer. Southern assigned 100 percent of the cost of
the exciter and the exciter cooling system to the reactive power charge and allocated the cost of the
remaining items between real and reactive power based on a relationship of real and reactive power to
apparent power, the nameplate power factor.
Southern then determined the cost of real power capacity and energy losses associated with the
additional reactive power demand and divided the sum of the real and reactive power costs by the total
amount of real power involved and levelized the reactive power charge over the contract term to
produce a fixed annual reactive power charge.

The Commission further found that Southern’s formula for allocating the costs of the generator stator,
rotor and step-up transformer to be reasonable. With respect to the exciter system, the Commission
determined that Southern should not be permitted to allocate the entire costs of these generator
components to the reactive power charge, but should allocate these costs between real and reactive
power in the same manner as the other costs described above. The Commission also rejected the
inclusion of any turbine costs in the reactive power charge. It stated that “in contrast to other
components that produce both real and reactive power, turbines produce only real power.”31

Other Compensation Issues With Generators. The Commission has stated that a generator need not be
compensated for providing reactive power within its design limits and that providing reactive power
within design limitations is not providing an ancillary service; it is simply ensuring that a generator lives
up to its obligations.

Table 1: Characteristics of acteristics of Voltage-Contr oltage-Control Equipment ol Equipment

Equipment type Speed of response Voltage Support Costs Ability Availability Disruption Capital (per
kvar) Operating Opportunity Generator Fast Excellent, additional shortterm capacity Low Low Difficult to
separate High Yes Synchronous Condenser Fast Excellent, additional shortterm capacity Low Low $30-35
High No Capacitor Slow Poor, drops with V2 High High $8-10 Very low No Static Var Compensator Fast
Poor, drops with V2 High Low $45-50 Moderate No STATCOM Fast Fair, drops with V High Low $50-55
Moderate No Distributed Generation Fast Fair, drops with V Low Low Difficult to separate High Yes
Source: Modified from B. Kirby and E. Hirst, Ancillary-Service Details: Voltage Control
Generators who provide reactive support and voltage control should be compensated for the
incremental costs from energy losses incurred by running at non-unity power or costs of running as
synchronous condensers . They should also be compensated for their lost profits if directed to provide
reactive capability outside the market rule requirement range.

Reactive Power Markets in Europe. Since the mid-1990s, a market-oriented approach to reactive power
has evolved. Generators with a capacity greater than 50 MW are required to have a 0.95 leading power
factor to a 0.85 lagging power factor capability at the high voltage side of the generator step-up
transformer.

3 parts Tariff

synchronized capability price: Rs. -------/ Mvar,

Availability capability price: Rs. -------/ Mvar,

Utilization price : Rs. -------/ Mvar,

In India, the state electricity boards were drawing large amounts of reactive power from the EHV grid,
causing 20% voltage drops on the 400-kV system, avoidable transmission losses and considerable
reactive power from generators. The Indian regulator put a 4 paise/kvarh (approximately $1/Mvarh)
price (buy and sell) on reactive power when the voltage dropped below 97% of nominal. In off-peak
periods the charge is reversed when the voltage goes above 103%. All low voltage problems have now
vanished