Voltage Support Agreement
A voltage support agreement compensates generators, storage assets, or FACTS devices for providing reactive power and voltage regulation at specified substations. Agreements define response times, performance testing, and penalties, ensuring local voltage stays within limits as renewable penetration rises.
Utilities enter these agreements when traditional capacitor banks are insufficient or when retiring synchronous condensers leaves voltage gaps. Contracts often accompany interconnection approvals, requiring project owners to install STATCOMs, synchronous condensers, or grid-forming inverters.
Payment structures may include availability retainers plus usage fees during contingency events. Regulators review agreements to ensure ratepayer value and to encourage competitive procurement of voltage services.
Investors consider voltage support revenues when underwriting hybrid projects or flexible transmission assets, particularly in weak-grid regions.
Technical Details
- •Specifies MVAr capability, response time, and voltage setpoints
- •Includes testing, telemetry, and maintenance requirements
- •Can be provided by STATCOMs, synchronous condensers, or inverters
- •Compensation may be cost-based or market-based
- •Aligned with grid code voltage and power factor standards
Why It Matters
Voltage agreements unlock new revenue for assets that stabilize weak grids. Tera tracks agreements, equipment types, and compensation so stakeholders can evaluate opportunities in constrained regions.
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