A new approach for solving reactive power planning problem is presented, which is based on dynamic programming and the use of a sensitivity approach to obtain candidate buses for allocation of reactive power devices in power systems. Once the set of candidate buses has been defined, the program gives the location and size of the reactive sources needed to satisfy operating and security constraints. The presented method employs concepts from dynamic programming for optimization of objective function New reactive power sources are modelled by discrete variables and investment costs are represented in detail
