Reactive power services at DSO level: a market approach on Belgian network

New challenges in reactive power management are emerging with the massive arrival of decentralised renewables in the medium-voltage grid, especially at the interface points (substations) between the TSO and the DSO. To implement a market-based solution to these problems, ORES (Distribution System Operator) and Luminus (producer) have run a reactive power compensation service demonstrator in 2024. A wind farm provided permanent service at maximum capacity for a full year to compensate for a substation, and multiple parameters are assessed and discussed in this paper: technical and economic viability, market design requirements and steps required for the large-scale deployment of this type of ancillary service on the network. The results obtained are encouraging: the reactive power related operational costs of the demonstrator substation have been halved. Although the implemented solution has proved its worth, a number of possible improvements and research questions are also presented. These concern the method for measuring the gains generated by the reactive power service, the usefulness of a variable setpoint and regulatory aspects. We believe this type of market approach is essential to accelerate the energy transition by integrating as much renewable energy as possible into our networks at the lowest possible cost.