To complete the analysis carried out in the previous research activity on dispatching services (balancing services, reactive services, re-ignition services), this deliverable contains a detailed description of the remuneration schemes for the reactive power reserve service adopted in the European countries already analyzed: Belgium, France, Spain, and Great Britain. Furthermore, given the relevance of the North American electricity system, the description concludes with a brief reference to the remuneration scheme adopted by the Independent System Operator (ISO)/Regional Transmission Organization (RTO) network managers and recognized by the regulatory authority (Federal Energy Regulatory Commission – FERC) in the USA.
The local nature of the voltage regulation service means that in the countries analyzed the implemented remuneration schemes for the reactive service are almost always defined in a regulated market context in which the transmission network manager or the regulatory authority establishes a given price level of the service. The unit price is established on the basis of costs incurred by the network manager to remunerate suppliers and/or on the basis of cost components expressed by the suppliers themselves (system owners). In particular, the price level is defined to compensate service providers for certain cost items such as investment, operation, maintenance, and any opportunity costs. The remuneration scheme can provide only a variable component (remuneration only for the reactive energy actually exchanged by the regulating plant), only a fixed component (remuneration only for the capacity/bandwidth made available by the regulating plant) or both, in addition to any penalty. Furthermore, some network operators apply remuneration for the provision of the optional service only, whereas others also provide remuneration for the mandatory service.