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Ancillary Services

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Ancillary services refer to functions that help grid operators maintain a reliable electricity system. Ancillary services maintain the proper flow and direction of electricity, address imbalances between supply and demand, and help the system recover after a power system event. In systems with significant variable renewable energy (RE) penetration, additional ancillary services may be required to manage increased variability and uncertainty.

Ancillary services can include:

  • Synchronized regulation, which is a service that corrects for short-term changes in electrical imbalances that might affect the stability of the power system.

  • Contingency reserves, which are used to respond to an unexpected failure or outage of a system component, such as a generator, transmission line, circuit breaker, switch or other electrical element.

  • Black-start regulation, which supplies electricity for system restoration in the unlikely event that the entire grid loses power.

  • Flexibility reserves, which is an emerging concept for addressing variability and uncertainty on timescales longer than contingency and regulating reserves.

Regulatory context strongly shapes how different systems procure ancillary services. For example, vertically integrated utilities use administrative tools such as contracts, requests for proposals, and internal acquisitions to procure the suite of ancillary services they need to balance supply and demand and maintain grid reliability. In contrast, in partially or wholly restructured power systems, electricity generators with technical capacity to provide ancillary services can participate in competitive ancillary services markets. In some cases, ancillary services (such as frequency and inertial response) can be assured through interconnection requirements rather than contractual or market mechanisms. Regardless of power system structure, variable RE poses three key considerations for procuring ancillary services:

  1. The variability and uncertainty of wind and solar energy increases requirements for various ancillary services, affecting the scheduling and pricing of those services.

  2. The magnitude of variable RE impacts vary depending on system conditions, which makes the ancillary service demands difficult to generalize across timescales and systems.

  3. Allowing variable RE to provide in ancillary services can offer more supply to the power system, but could pose challenges based on the unique characteristics of the variable resources in question.

The aggregate impact of significant variable RE on the grid suggests the need for modifications to current procurement mechanisms and ancillary services market designs and rules, and the potential for separate ancillary services markets. Further, understanding the interactions among ancillary services, energy markets, and policy is critical to creating incentives that encourage positive interplay between variable RE and the grid. Without proper policy alignment, generators may be discouraged from providing ancillary services if they are rewarded for energy generation alone.

Example Interventions

The following are possible strategies to encourage ancillary services, particularly under high variable RE penetration scenarios:

  1. Enhance the system operator’s ability to monitor variable RE generation (i.e., increase the visibility of variable RE), including distributed systems, allowing for more accurate forecasting and adequate anticipation of ancillary service needs. 
  2. Consider defining and procuring new ancillary services to manage high variable RE penetrations. For example:
    • Following reserves, which provide minute-to-minute balancing during normal system conditions. A following ancillary service would provide faster-ramping resources for systems with high variable RE penetrations, which may increase ramp requirements beyond the capabilities of the generation fleet that normally provides regulation or contingency reserves.
    • Frequency responsive reserve and inertial response, which respond within seconds following a contingency. Historically, these services have been provided by inertia and governor response inherent in the conventional generation fleet, but the displacement of large synchronous generators with significant wind and solar may reduce the ability of the generation fleet to supply these services. Wind turbines with active power controls, fast-acting storage, and possibly demand response can provide frequency and inertial response if properly encouraged to do so through ancillary service procurement mechanisms or interconnection requirements.
    • Reactive power and voltage control, which maintain voltages within acceptable limits and enables the system to respond to both contingencies and shifts in generation and demand. Interconnection requirements or compensation can motivate generators (including solar and wind) to provide reactive power and voltage control. 
  3. When calculating flexibility reserves, do so dynamically by regularly updating calculations based on current conditions or near-term forecasts. For example, if no wind is being generated, then wind ramp-down is not needed.
  4. Encourage participation by variable RE generators in the provision of ancillary services:
    • When cost-effective, place reactive and active power controls on large-scale variable RE generators to diversify and increase reserve resources.
    • Interconnection agreements could include requirements for control capability, ride-through, inertial response, and voltage regulation, which help support grid stability through automatic response.
    • For utility-scale wind, interconnection agreements can also include output modulation and cut-in power ramp control that provide for grid stability.
  5. Technologies such as telecommunications and remote controls for distributed generation (DG) clusters can promote effective communications between system operators and generators.
  6. Access demand response as a reserve and provide sufficient incentives for end-users to participate in demand-side management programs. This can include frequency response provided by consumer aggregators. [See also the Demand Response and Storage topic webpage].

Sources: PJM 2012-2013, Cochran et al. 2012, NERC 2011, ICER 2012, and GE Consulting 2014

Key Video

Flexibility Options in Electricity Systems

Ecofys, May 2014

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