Reactive Power Supplied by

Wind Energy Converters

Cost-Benefit-Analysis
M. Braun
ISET
Institut fuer Solare Energieversorgungstechnik e. V.
Koenigstor 59, D-34119 Kassel, Germany
Phone +49(0)561/7294-118
E-mail: mbraun@iset.uni-kassel.de

Abstract:
This paper provides a cost-benefit-assessment of
reactive power supplied to network operators by
Wind Energy Converters (WECs). An approach is
proposed to estimate the costs of reactive power
supply by WECs with inverter-coupled generators.
A cost-benefit-analysis shows the economic
attractiveness of reactive power supply in many
cases, but also significantly varying costs. An
economic optimisation of both, the WECs and the
networks operation, must consider these cost
variations.
Keywords: Ancillary Services, Economic Analysis,
Inverter Losses, Reactive Power, Wind Energy
Converter

1 Introduction
In standard Alternating Current (AC) electrical
networks the voltage and current pulsate with the
networks frequency (in Europe: 50 Hz). Due to a
phase shift between voltage and current two
different types of power are distinguished: active
power for the useful work and reactive power
which oscillates between electrical storage
elements (capacitors and reactors). Many loads
and generators as well as the passive network
elements have a certain reactive power
characteristic. Different types of compensating
units can be installed to compensate reactive
power flows in the network. This goes alongside
with the objectives of network operators who have
to control the grids voltage within allowed limits
(e.g. EN50160). Furthermore, network operators
aim at reducing grid losses and congestions by

use of reactive power control. The distributed

supply of reactive power by Wind Energy
Converters (WECs) is an option to support network
operation.
Presently, WEC have to fulfil grid code
requirements for reactive power (e.g. Germany
[1,2] or Spain [3]). This paper analyses the costs
and the benefits of this service to provide more
insights into its economics which allows designing
improved economic frameworks with regard to
reactive power supply. Firstly, it describes the
capability and availability of reactive power supply
by WECs. Secondly, the costs are assessed, and,
finally, a cost-benefit-analysis shows the economic
attractiveness of this ancillary service by WECs.

2 Reactive Power Supply

Capability of WECs
In principle all generators which are coupled to the
network either with inverters or with synchronous
generators are capable of providing reactive power
[4]. Principal WEC designs [5] are
directly-coupled induction generators (IGs) in
fixed speed or variable slip design with
capacitor banks;
doubly-fed induction generators (DFIGs) with
a power electronics converter between the
point of grid connection and the rotor circuit of
the IG (designed only with a fraction of the
rated power);
directly-coupled
synchronous
generators
(SGs) with a dynamic gearbox and excitation
control; and
inverter-coupled generators with a full power
electronics converter (FC) which couples
different
designs
of
induction
and
synchronous generators.

IGs are not considered further on because their

control capabilities are limited compared to the
requirements of network operation and their
capacitors can be regarded as additional passive
network elements (see section 4.1.1). Also SGs
with little installation rates are not considered in
detail. However, the approach for FCs is
transferable to SGs. The focus of this paper is on
the two market-dominating power electronic
designs: DFIG and FC with a market share of 50%
and 42% respectively (rest: IG) in Germany [6].

2.1 Inverter-Coupled Generators (FC)

Reactive power occurs only in AC networks due to
a phase shift between voltage and current. In DC
networks it is not defined. Consequently, only the
grid-side inverter of the power electronic back-toback converter needs to be considered as it
defines the phase angle of the current to the mains
grid.
One fundamental limit is the maximum current
transfer of the inverter or the maximum apparent
power Smax. The phase angle of the current vector
can be arbitrarily controlled as long as the absolute
value of the current does not exceed its maximum.
The active power transfer Pact is generally handled
by the operational control of the WEC with first
priority so that it limits the maximal possible
reactive power supply Qmax according to
2
2
Q max (t) = S max
Pact
(t ) .

capacitive reactive power limit

Qmax (blue, right-hand side), and
apparent power limit
Smax (green)
the reactive current of the inverter can be
controlled arbitrarily with response times in the
order of milliseconds.
While the solid blue line in Figure 1 shows often
published reactive power limits even more is
possible as displayed by the dashed blue line. Also
reactive power can be supplied if no active power
is transferred [8,9]. An extension of the solid to the
dashed blue line, given by equation 1, depends on
the power electronic design. The availability is then
dependent on the actual active power transfer so
that not 100% availability can be stated but less.
As an exemplary database (source: ISET), the
measurements of an Enercon E-66 WEC (with
Pmax = 1300 kW) in Germany are analysed. For
each five minute interval, the maximum active
power is measured in the years 2001-2003. The
maximum reactive power Qmax is calculated with
equation 1 for different inverter sizes Smax. This
leads to the availability of a certain reactive power
Q as displayed in Table 1 showing the influence of
oversizing the inverter. With Smax = 1400 kVA =
1.077 Pmax it is possible to guarantee 520 kVAr and
with Smax = 1500 kVA = 1.154 Pmax even 748 kVAr
for the full active power operation range. More
reactive power can be supplied but the availability
is less than 100% but still more than 90% up to
1000 kVAr.

(1)

However, also the reactive current faces limits

mostly due to reasons of stability and availability.
Figure 1 presents an example of the loading
capability chart (power domain) of a FC which
transfers active power and supplies reactive power
(practical values see [7]).

Q
kVAr
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500

Availability of Q with
Smax =
Smax =
Smax =
1300 kVA
1400 kVA
1500 kVA
>99%
100%
100%
>99%
100%
100%
>99%
100%
100%
99%
100%
100%
97%
100%
100%
95%
>99%
100%
94%
98%
100%
94%
95%
>99%
93%
94%
97%
92%
93%
94%
89%
92%
94%
84%
90%
93%
5%
85%
90%
0%
5%
86%
0%
0%
5%

Table 1: Available reactive power Q of an Enercon

E-66 WEC (with Pmax = 1300 kW) in Germany with
different inverter sizing Smax
Figure 1: Loading capability chart of a FC
(Q > 0: capacitive)
Within the
active power generation limits
Pmin and Pmax (red),
inductive reactive power limit
Qmin (blue, left-hand side),

Also certain overload capabilities for short-term

reactive power supply exist, e.g. for fault-ride
through support. In contrast, active power has no
overload flexibility if not throttled because it is
directly linked with the maximum mechanical
power due to the wind conditions. However, the
possibilities from these overload capabilities are
not discussed further in this paper.

2.2 Doubly-Fed Induction Generators

(DFIG)
A DFIG is an IG whose rotor windings are coupled
by a power electronic converter to the grid. This
design allows an excitation in the rotor coils for
speed regulation and reactive power control of the
IG by the rotor-side inverter as well as reactive
power supply by the grid-side inverter. Three limits
define the reactive power capacity of a DFIG [10]:
stator current (heating of stator coils)
Smax (green), Qmin (blue, left-hand side),
rotor current (heating of rotor coils)
Qmax (blue, right-hand side), and
rotor voltage (limiting the rotor speed).
The rotor voltage can be a limit at high slip s,
reducing Qmax further on. Figure 2 shows the
loading capability chart at s = 0. At lower slip the
defining circles are extended in direction of the P
axes (and compressed at higher slip). A detailed
discussion on the functional dependencies
provides Lund et al. in [10].

3.1 Investment costs

In principle, grid-side inverters can control reactive
power without the need of additional investments
due to the described power electronic
functionalities. However, additional investment
costs have to be considered if the inverters rated
capacity is extended for higher capabilities and
availabilities of reactive power supply. Inverters are
generally oversized by WEC manufacturers to
comply grid code requirements.
Assuming inverter costs of 150-300 /kVA leads to
additional investment costs as listed in Table 2 and
depicted in Figure 3. Also the annual costs are
given in Table 2 with a lifetime of 20 years and 5%
discount rate. If 0.5 MVAr should be available from
a WEC with FC of 1 MW it has to be oversized by
12%. This oversizing generates investment costs
of 36-71 /kVAr. A general finding is that the
additional investment costs are low at small
secured reactive power capacities. Other ways of
assessing capacity costs are discussed in [11,22].
Q [MVAr]
0.1
0.2
0.3
0.4
0.5

Additional Costs
[/kVAr]
8-15
15-30
22-44
29-58
36-71

Annual Costs
(20 a, 5%) [/kVAra]
0.6-1.2
1.2-2.4
1.8-3.5
2.4-4.7
2.9-5.7

Table 2: Additional investment costs for secured

reactive power supply Q of a 1 MW WEC with
inverter costs of 150-300 /MVA
Figure 2: Loading capability chart of a DFIG
(Q > 0: capacitive)

3 Costs of Reactive Power

Supply by WECs
Costs for reactive power supply can be separated
into investment costs [/kVAr] and operational
costs [c/kVArh]. Both costs are very specific and
show large ranges. The purpose here is to give an
order of magnitude and an understanding of the
various dependencies.
Hence, additional minor cost factors are not
discussed in detail. They tend to be dependent on
the higher currents (often with I) causing
electromagnetic forces (mechanical stress) and
higher temperatures (thermal stress). These
effects result in higher maintenance costs and
equipment aging as well as higher costs of
unavailability. Due to their I-dependency these
additional minor costs might be added to the
operational costs (see section 3.2).
The following analysis of investment and
operational costs focuses on WECs with FC. It is
possible to transfer this approach to DFIG and SG.

Figure 3: Additional investment costs for secured

reactive power supply capacity

3.2 Operational Costs

WECs have low variable operational costs
[/MWh] because no primary energy costs have to
be paid for the wind. However, similar to all other
power plants they have a certain self consumption.
The additional self consumption due to reactive
power supply corresponds to the additional losses
of the grid-side inverter.
The following operational cost estimation approach
has been introduced in [12] for photovoltaic
inverters. It is further developed, adjusted and
applied to determine the costs of reactive power

supply by WECs. It can be divided into two main

steps:
1) Reactive power supply in addition to active
power supply increases the losses of the gridside inverter of WECs.
2) These additional losses need to be
compensated by active power
a. by reducing the amount of active power
generation
resulting
in
operational
opportunity costs, or
b. by network purchase if no active power is
fed into the mains (at low wind conditions).
The determination of the self consumption of
inverters starts with the available data on the
inverters efficiency
eta =

(2)

PAC
PAC
=
PDC
PAC + P'loss

We can then calculate the additional losses Ploss

by taking the difference of the inverters losses with
reactive power supply Q(t) 0 and without Q(t*) =
0 for the same DC link power PDC at time t and at
reference time t* respectively:

Ploss (t ) =

(3)

(4)

Ploss (PDC (t ), Q(t ) 0 )

Ploss (PDC (t *) = PDC (t ), Q(t *) = 0 )

These additional losses can be attributed to the
reactive power supply to get the related value in
kW/kVAr (or kWh/kVArh in energy units):

Ploss (t ) =

depending on the active power output PAC on the

AC side and the active power input PDC on the DC
side. The difference between PDC and PAC define
the losses Ploss of the inverter.
The losses of an inverter can be approximated by
a second-order polynomial function of the apparent
power supply S [12]

Ploss (S ) = cself + cVloss S + c Rloss (S )

the maximal apparent power Smax for further

generalisation.

Ploss (t )
Q(t )

(5)

With the loss curve of Figure 4 this leads to the

related additional losses caused by reactive power
supply as displayed in Figure 5. The graph is
limited by the semicircle of the devices maximal
apparent power Smax and the maximal active power
Pmax. It shows the symmetry of negative and positive
reactive power supply. These additional related
active power losses for reactive power are the
basis for the following cost calculation.

with self losses (standby losses) cself, voltage

dependent losses over the power electronic
components cVloss (proportional to I), and current
dependent losses over the impedances cRloss
(proportional to I2).
An exemplary efficiency curve and the
corresponding loss curve are used for the following
calculations (Figure 4).
100%

Efficiency

98%
2

96%
94%

92%
90%

Losses [%Smax]

0
0

20

40

60

80

100

Apparent Power (%Smax)

Figure 4: Efficiency (red) and losses (blue) of an

exemplary grid-side inverter of a WEC
The considered grid-side inverter has a maximal
efficiency etamax = 98%. The values of active power
losses and apparent power are given in percent of

Figure 5: Losses due to reactive power supply Q

with different active power transfer P
(Smax = 1.1Pmax and step size = 5%Pmax)
Two cases
assessment:

are

distinguished

for

the

cost

Active WEC (P > 0):

Active power generated by the wind turbine is fed
into the mains grid. In addition reactive power is
supplied. The additional losses accompanying the
reactive power supply reduce the active power
injection. Hence, the costs of the additional losses
are the opportunity costs due to reduced active
power supply. Active power production by WECs is
site-dependent and can vary considerably.
Average costs of active power generation by
WECs in Germany can be estimated as 9 c/kWh
[13,14] within the range of the feed-in tariffs of 4-

9 c/kWh for the years 2005-2015 [15].

Inactive WEC (P = 0):
According to the measurement database (Table 1)
the WEC did not generate active power in 5% of
the 5 minutes intervals. The inverters losses are
then compensated by the external grid (here:
mains) resulting in costs due to the tariff of active
power purchase. These costs of active power
purchase vary with regard to voltage level, energy
supplier and consumption profile. Here we
consider costs of 9 c/kWh [16].
With the given assumptions the operational costs
of reactive power supply by WECs can be
classified in cost ranges as given in Figure 6
showing
an increase of the costs with increasing
reactive power supply; and
a decline of the costs of a certain reactive
power supply with increasing active power
supply.
These functional dependencies lead to the general
finding that the operational costs are the lowest at
low levels of reactive power supply. This goes
alongside with the finding in section 3.1: Reactive
power should be preferably delivered by many
WECs instead of few ones.

studying the benefits for network operation.

This section provides a comparison with
conventional reactive power supply technologies,
network purchase, and an analysis of the benefits
of reactive power based ancillary services for
network operation.

4.1 Comparison with Conventional

Reactive Power Supply Technologies
The following conventional devices for reactive
power supply are looked at:
1. static capacitors and reactors;
2. static
compensators
with
power
electronics;
3. synchronous condensers; and
4. synchronous generators of conventional
power plants.
4.1.1 Static Capacitors and Reactors
A standard network component for reactive power
compensation is a capacitor bank. The analysis of
costs of capacitor banks results in the kVArh
prices displayed in Figure 7. They depend on the
used full load hours: few full load hours cause high
costs per kVArh which are reduced rapidly with
increasing full load hours. The cost estimation is
based on the following assumptions: investment
costs of 15 /kVAr [17], lifetime of 20 years,
discount rate of 5%, losses of 1.5 W/kVAr [17] and
power purchase costs of 9 c/kWh [16]. Figure 7
includes two operational cost ranges of reactive
power supply by WECs according to Figure 6. The
additional investment costs are not yet considered.

Costs of Q [c/kVArh]

0.15

Figure 6: Ranges of operational cost of reactive

power supply by WECs
(Smax = 1.1Pmax and step size = 1%Pmax)
These costs are compared to the benefits of
reactive power supply and costs of alternative
supply technologies in the following section.

4 Cost-Benefit-Analysis
The benefits of reactive power supply by WECs
can be assessed by looking at alternative sources
of reactive power which are presently used. If
WECs have lower costs they can economically
substitute the conventional technologies. Another
approach is the analysis of the network effects by

Capacitor Banks
0.10
WEC:
0.03 - 0.10 c/kVArh

0.05

WEC:
< 0.03 c/kVArh

0.00
0

2000

4000
6000
Full Load Hours [h/a]

8000

Figure 7: Cost of capacitors (in c/kVArh) over the

used full load hours (in h/a) in comparison to the
cost ranges of WECs
The comparison in Figure 7 shows that reactive
power supply by WECs in the low cost range of
< 0.03 c/kVArh (approx. |Q| < 15%Pmax) is
cheaper than capacitors in general. Considering
the middle cost range of 0.03 0.10 c/kVArh
(approx. 15%Pmax < |Q| < 50%Pmax) WECs are
cheaper than capacitors if only used for few 1000
full load hours per year. Taken these insights
together it can be stated that reactive power supply

by WECs can be beneficiary compared to reactive

power supply by capacitor banks at the same
network node (without additional network losses)
and without taking into account additional
investment costs assuming that no 100%
availability is necessary.
This conclusion is also valid for static reactors
which tend to be some tens of percent more
expensive than capacitors. If reactors as well as
capacitors have to be installed at one node WECs
having the full range are even more attractive.
As discussed in section 3.1 it is necessary to
consider the additional investment costs if 100%
availability of Q is required. A comparison with
Table 2 and Figure 3 shows that guaranteeing 1020% of the reactive power capacity already results
in investment costs in the order of those of
capacitors. However, if reactors have to be
installed as well up to 40% of Qmax can be
guaranteed. Including investment costs it becomes
more difficult for WECs to be competitive.
However, with higher inverter efficiencies and
decreasing inverter costs this situation might
improve in the future.

supplying Q in comparison to conventional power

electronic based compensators.

Figure 8: Operational cost (in c/kVArh) of Q

supply by inverters which only supply Q (blue) and
WECs which supply Q in addition to P (red)
(Smax = 1Pmax and step size = 2%Pmax)

The comparison with static capacitors and reactors

might be not reasonable in all cases. An important
feature of reactive power supply by WECs is their
possibility to follow smoothly the demand. This is
an important advantage compared to capacitor
banks which switch discretely resulting in
suboptimal compensation and transient voltage
disturbances. In many cases a comparison to
static compensators with power electronics of
similar functionalities should be preferred.

4.1.3 Synchronous Condensers

Synchronous condensers are synchronous
generators without prime mover. They are devices
dedicated for reactive power supply. Because of
this dedication all costs are attributed to reactive
power supply. Figure 8 can also be referenced
with regard to operational costs. In contrast, the
investment costs are approx. one order of
magnitude lower than those of inverters of WECs
[18]. Nevertheless, at low Q capacities (see
Figure 3) WECs can be competitive at the same
network node, also because of low efficiencies of
synchronous condensers.

4.1.2 Static Compensators with Power

Electronics
Different types of static compensators with power
electronics
are
available.
Static
VAR
Compensators (SVCs) are capacitors and/or
reactors connected by thyristors (grid-commuting).
Static Compensators (STATCOMs) are power
electronics-based (self-commuting) with gate turnoff thyristors (GTOs) or insulated gate bipolar
transistors (IGBTs) comparable to those of
inverter-coupled WECs. Kueck et al. [18] estimate
the investment costs in the range of 40-100
US$/kVAr which is assumed to be in the range of
30-75 /kVAr. This cost range corresponds to
costs for oversizing the inverter of a WEC in order
to have up to 100% of the reactive power capacity
secured available (cf. Table 2 and Figure 3).
The energy losses depending on the efficiency of
STATCOMs and grid-side inverters of WECs are
similar due to similar power electronic designs.
Figure 8 shows that STATCOMs tend to have
higher operational costs because all losses would
be attributed to Q (blue line) while only the
additional losses are attributed to Q in case of
WECs (red area) because P is transferred as well.
If designed properly WECs can be competitive in

4.1.4 Synchronous Generators of Conventional

Power Plants
Conventionally also central power plants are used
for reactive power supply in the transmission
network. The efficiency of their synchronous
generators can be assumed to be similar to the
efficiency of the grid-side inverter of WECs. One
important difference is that they generally sell their
power generation on the power exchange with
average prices, for instance, of 2.9 (2004), 4.6
(2005) and 5.1 c/kWh (2006) on the European
Energy Exchange (EEX). They are with 4.2
c/kWh (average 2004-2006) considerably lower
than the feed-in tariff prices in Germany of 9
c/kWh (see section 3.2). A second difference to
WECs is that conventional power plants normally
operate at rated power and not with variable P
which tends to lead to lower losses (see Figure 6).
Even more significant is the situation for the
investment costs of inverters compared to
synchronous generators which can be about one
order of magnitude higher at MW sizes.
Taken these differences together shows that costs
for reactive power by conventional power plants
are generally lower than those of WECs. However,
the dispersed installation of WECs increases the

competitiveness because a distributed supply near

the consumer loads reduces the network losses
compared to more centralized supply of
conventional generators.
4.1.5 Additional Aspects
Additional aspects need to be considered, e.g.:
Harmonics:
IGTB-based inverters are capable to
compensate harmonics while synchronous
generators have no influence and SVCs even
generate harmonics [4].
Short-circuit behaviour and overload
capability:
Synchronous generators add with their inertia
to system stability and they have an inherent
transient overload rating which does not exist
with the other technologies.
Q dependency on bus voltage V:
Independent: synchronous generator
Q ~ (1/V): inverter
Q ~ (1/V): SVC, capacitors, reactors
In case of voltage dips the behaviour of
synchronous generators but also inverters is
beneficiary.
These and further aspects should be included in
comprehensive comparisons (see also [19]) of
alternative reactive power sources.

4.2 Comparison with Network Purchase

A comparison with reactive power supply costs or
tariffs of network operators allows taking all
present sources of reactive power together.
An analysis of [20] shows that German distribution
network
operators
charge
on
average
1.1 c2005/kVArh (0.0 - 2.7 c/kVArh) if the power
factor is lower than 0.9 (in average). In the high
voltage network the average charge is 1 c/kVArh
(0.0 1.5 c/kVArh) and in the extreme high
voltage one network operator has a charge of
0.3 c/kVArh. However, this charge is more a
penalty than the real costs which should be lower
according to section 4.1.
National Grid in the United Kingdom spends
approx. 0.2 c/kVArh on the reactive power market
of the transmission network [21].
The three transmission network organizations
PJM, NYISO ad ISO-NE in the United States
provide an annual payment in the range of 10055907 US$/MVAr [18] assumed to be 0.75-4.4
/kVAra. This payment would compensate an
oversizing of more than 40% of WECs according to
Table 2. In addition, the three US network
organizations also provide a compensation for lost
profits on real energy sales (opportunity costs).
ERCOT, for instance, pays not for capacity but for
the utilization 2.65 US$/MVARh at power factors
smaller than 0.95 [18].
In Spain a royal decree [3] defines three load

situations (peak, plateau, and off-peak). If

generating units provide the correct power factors
they receive an incentive if they counteract they
have to pay a penalty. This incentive is attractive
for operators of WECs in Spain. But it cannot be
contrasted reasonably here because the incentive
is paid per kWh.
If the converter is designed appropriately reactive
power supply by WECs can be economically
attractive looking at the actual prices of network
purchase or incentives for network delivery.
However, many countries have not yet established
any market design. It is recommended to improve
reactive power market designs based on real costs
of this ancillary service (see also [22]).

4.3 Comparison with

Network Operation

Benefits

for

Reactive power is necessary for an optimized

network operation. It is used mainly for three
ancillary services:
1. voltage control,
2. reduction of grid losses, and
3. reduction of congestions.
The value of these services is analyzed in the
following sub-sections individually. It is difficult to
analyze all three of them combined in general
because reactive power control might have
opposed effects on these ancillary services
depending on the systems state. However, the
network operator can take into account all these
effects within the optimization of the networks
operation.
4.3.1 Voltage Control
Voltage control is a basic need for network
operation because the voltage has to stay within
certain limits throughout the whole network (cf.
EN50160). Capacitive reactive power increases
the voltage level while inductive reactive power
decreases the voltage level. However, the voltage
needs to stay within certain limits demanding for
distributed reactive power compensation. Different
reaction times are used to optimize the voltage in
the network: primary, secondary and tertiary
voltage control during normal operation, as well as
grid design in the installation phase (especially of
distribution networks), and transient voltage control
during faults.
WECs can be integrated in primary, secondary and
tertiary voltage control during normal network
operation. Here they have to be compared to
standard network components providing this
service:
tap-changing
transformers
and
conventional reactive power sources. The
competitiveness of WECs in comparison to
conventional reactive power suppliers is analysed
in section 4.1. Depending on the converters
design, its location as well as the network

operators needs WECs can be attractive suppliers

of reactive power.
Another benefit can arise at the installation phase.
The grid design might have caused a restriction of
larger WECs due to voltage limits [1,2]. Such
connection conditions might be complied by using
reactive power control of the respective WECs.
The network can be utilized more effectively with
this functionality.
Transient voltage control happens in milliseconds.
This is a service already required from WECs. Due
to very fast reaction times and their spatial
distribution throughout the network the voltage is
supported effectively during faults (cf. fault-ridethrough requirements e.g. in [2,23]). The general
benefit is difficult to assess but is expected to be
bigger than the costs of providing reactive power
for few seconds if the security of supply can be
increased.
4.3.2 Reduction of Grid Losses
The transfer of reactive power causes active power
losses in the network. Reactive power
compensation reduces these active power losses.
In addition, more network capacity can be used for
active power transfer. This additional benefit is not
included in the following considerations.
Different load power factors cos() and different
average network losses dPL (in %) are looked at
with constant active power flow P. A quadratic
correlation (at constant voltage: ~I) is assumed
between losses PL and the apparent power flow S:

PL = dPL S 2 = dPL P2 + Q2

(6)

cos()
0.95
0.9
0.85

Table 3: Savings in c/kVArh due to reduction

of active power losses due to reactive power
compensation with different load power factors
cos(), average network losses dPL, and with
costs for active power losses of 5 c/kWh
4.3.3 Reduction of Congestions
By active compensation of reactive power it is
possible to reduce the reactive power flows in the
network. Particularly at peak load situations this
can reduce the loading of the network helping to
avoid congestions. In addition, also network losses
are reduced but not considered in the economic
assessment in this subsection.
Figure 9 displays the relative reduction of the
loading of a considered network element (e.g. line
or transformer) by reactive power compensation.
The network element is assumed to operate at
100% rated capacity Sg considering different load
power factors cos() with active power flows P and
reactive power flows Q. The reactive power flow is
compensated by WECs with 50% of their rated
capacity. Their installed capacity Pw is assumed to
be 5%, 20% and 50% of the network capacity Sg.
The reduction of apparent power S (in %
meaning [kVA/kVAr]) relative to reactive power
compensation with the reactive power supply Qw
by the WECs can be calculated by:

with

S =
2

1
1 > 0.
Q = P
cos( )

(7)

PL =

[(

dPL P 2 + Q 2 P 2
= dPL Q
Q

(8)

1
1
= dPL P
cos( )

With costs for the compensation of active power

losses of 5 c/kWh [24] the benefit of the loss
reduction is given in Table 3.
A comparison with the costs in Figure 6 shows that
it can be economically attractive to use WECs for
reactive power compensation in network situations
with high network losses and low load power
factors (high reactive power flow).

S g P 2 + (Q Qw )

Qw

S g (S g cos( )) + (S g sin( ) Qw )
2

The reduction of active power losses by reactive

power compensation Q relative to Q [kW/kVAr] is
then defined by:

Average Network Losses dPL

1%
2%
3%
4%
0.016
0.033
0.049
0.066
0.024
0.048
0.073
0.097
0.031
0.062
0.093
0.124

(9)

Qw

Figure 9 shows that the loading can be reduced by

15% (cos()=0.98), 30% (cos()=0.94) or 45%
(cos()=0.87) of the WECs reactive power supply
at a penetration level of 20%. This reduction is
significant. With the range of S = 15-45% and
network costs of 30-60 /kVAa [20,25] the benefit
can be calculated as 4.5-27 /kVAra which is by
far greater than the investment costs in Table 2.
The operational costs can be neglected because
some hours of reactive power compensation, say
10-30 h/a for solving the congestions, result in only
1-3 c/kVAra with 0.1 c/kVArh according to
Figure 6.
The calculated benefit is by far higher than the
costs of reactive power compensation by WECs.
However, most networks operate below 100%
capacity. In such state the described congestion
management does not have any benefit. However,
in the future with a more optimised network
operation and design, the reactive power

compensation capability of distributed generation

can be applied effectively for using the network
infrastructure more effectively at higher loading
levels. The peak load normally occurs on winter
evenings in Europe [26] or under emergency
network situations.

Relative Reduction of Loading by

Reactive Power Supply

60%
Pw = 5%Sg
Pw = 20%Sg
Pw = 50%Sg

50%
40%
30%
20%
10%
0%
0.99

0.97

0.95

0.93

0.91

0.89

0.87

0.85

losses in the order of 5 c/kWh [24] we get to a

value of approx. 240 Mio of loss reduction. This
calculation does not take into account the value of
the increased network capacity and further
benefits for network operation (e.g. voltage
control).
The overall benefits and costs of reactive power
supply are often considered as minor cost factors
in
the
total
electricity
supply
turnover.
Nevertheless, it is very important from an
economic perspective because it allows operating
the network more stable and secure, e.g. by
keeping the voltage limits, solving congestions,
supporting stability in case of faults and flexible
islanded operation (Microgrid concept [27]). As
stated in [22]: inadequate reactive power leading
to voltage collapse has been a causal factor in
major power outages worldwide.

cos(phi)

Figure 9: Relative reduction of network loading due

to reactive power compensation by WECs
considering different WEC penetration levels Pw/Sg
and different load power factors cos()

5 Economic Impact
The cost-benefit analysis shows that the benefit
is in most cases greater than the costs of reactive
power supply by WECs. Although seeing costs in
the order of some 0.01 c/kVArh might result in a
statement like: negligible. It is correct that
reactive power supply has relatively seen no major
cost influence on the profitability of WECs.
However, in absolute terms we are discussing
about costs which should be taken into account.
The following two examples should give an idea
about the relevance.
We consider a 1 MW WEC with average reactive
power supply costs of 0.1 c/kVArh, secured
reactive power capacity of 0.5 MVAr, and full load
hours of 1000 h/a (for reactive power supply). The
operational costs of reactive power supply of this
single WEC are then 500 /a. In addition, an
oversizing to secured 0.5 MVAr results in
additional investment costs of 2.9-5.7 /kVAra or
1,450-2,850 /a. The total costs due to reactive
power supply are then 1,950-3,350 /a. This is a
minor cost factor (approx. 1%) for a 1 MW WEC
with active power generation revenues of 225,000
/a (full load hours for active power supply of 2,500
h/a and 9 c/kWh). But if we are looking at 50 GW
of WEC installed in Europe (beginning of 2007) we
are talking about annual reactive power supply
costs of 97.5-167.5 Mio .
From the network perspective we can have a look
at the total reactive power demand in the electricity
network which has been estimated in [17] to be
1759 TVArh annually for the EU-25 in 2002.
Further estimations in [17] result in 1069 TVArh to
be compensated and a corresponding network
loss reduction of 48 TWh. With costs of network

6 CONCLUSIONS
This paper describes the capabilities and
availabilities of reactive power supply by WECs
showing an interesting potential. This potential is
studied concerning its economic usability with an
approach of allocating costs of additional losses as
well as cost due to oversizing to reactive power
supply and assessing the benefits for network
operation.
The cost-benefit-analysis shows that reactive
power supply by WECs can be cheaper than
reactive power supply by conventional devices.
Reactive power supply by WECs for voltage
control can be an economic attractive supplement.
It can also be economically attractive for reducing
network losses and congestions as well as
providing better security of supply in case of faults.
One advantageous characteristic of reactive power
supply by WECs is its distribution in the network
and its location which is often next to loads. This
dispersion of reactive power sources can reduce
the overall network losses considerably.
The paper presents an economic potential of using
reactive power supplied by WECs. This potential
should be used to optimize the quality, economy
and security of network operation. Further on,
regulatory issues have to be analysed to design
appropriate market frameworks based on real
costs of reactive power and giving reasonable
incentives to operators of WECs for providing a
benefit for network operators. These frameworks
should lead to a win-win-situation: for the operators
of WECs as well as for network operators.

ACKNOWLEDGEMENT
This work was supported by the European
Commission in the framework of the FENIX project
(SES6 518272, see http://www.fenix-project.org)
as well as by the German Federal Ministry for the
Environment, Nature Conservation and Nuclear
Safety in the framework of the national project
Multifunktionale
Photovoltaik-Stromrichter

Optimierung von Industrienetzen und ffentlichen

Netzen (FKZ 0329943, see http://www.multipv.de). Only the author is responsible for the
content of this publication.
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