What is Ancillary Services?

Analyst’s Note

As renewables market penetration increased, each market's system volatility also increased. Therefore, Ancillary Services became more and more critical in recent years. Considering the large number of solar and wind generation unit applications in the queue increasing the system uncertainty, analyzing Ancillary Services price and volume patterns will be more critical for the market stakeholders soon. On the other hand, batteries are a new key player in the merchant markets, and their impact will be important to change market dynamics. Various battery storage applications should be evaluated to assess how Ancillary Market volume will be affected because battery technologies are flexible enough to provide each ancillary service. The number of applications shows there is an essential appetite from market participants to be benefited from Ancillary Services as another revenue stream in addition to Energy and Capacity Markets. PowerDev provides detailed analytics on Ancillary Services price and volume for each ISO/ RTO and their revenue stacking opportunities with battery storage applications.

PowerDev provides detailed analytics on Ancillary Services price and volume for each ISO/RTO as well as their revenue stacking opportunities with battery storage applications.

Ancillary Services

North American electricity markets are operated and managed by Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). The United States has seven different ISOs and RTOs, which have their own territories and market structures. ISOs and RTOs are responsible for maintaining grid reliability by balancing the transmission system’s electricity supply and demand procurements. For these reasons, each ISO/RTO operates its ancillary service market and sets some requirements throughout market-based settlement mechanisms. In this direction, they are procuring Ancillary Services called Regulation Up, Regulation Down for frequency balancing, and Operating Reserves such as Spinning, Non-Spinning and Supplementary reserves.

  • Regulation Up and Regulation Down services are procured via Day-Ahead and Real-Time settlements by the system operators via Automatic Generation Control (AGC) signals for system frequency control purposes. This way, eligible power generators can reliably respond to the system’s frequency fluctuations caused by load and supply changes.

  • Operating reserves are other ancillary service types that can contribute to system balancing activities in two ways:

    1. Providing additional generation to cover increasing system load.
    2. Decreasing generation of the units or going offline to help low load system conditions.

There are two types of operating reserves that are common in the ISO/RTO markets:

  • Spinning or Synchronized Reserves means a unit already generating and injecting electricity to the grid can decrease or increase its generation capacity to help high or low load system conditions.
  • Non-spinning or Non-Synchronized reserve, meaning the generation unit is currently offline-not generating electricity- but can start-up and provide electricity to the grid in a specific timeframe. This timeframe and technical requirements vary for each ISO/RTOs but generally change between 10-30 minutes.

Each ISO/ RTO manages its transmission network based on its geographic area and may define system- wide or zonal level Ancillary Services procurements. Also, technical requirements can change based on each market’s grid stability needs. The matrix below shows high-level ancillary service types by each ISO.

CAISO (California ISO)

  • Spinning Reserves
  • Non-spinning Reserves
  • Regulation-up
  • Regulation-down
  • Regulation Mileage-up
  • Regulation-Mileage-down

ERCOT (Electric Reliability Council of Texas)

  • Responsive
  • Non-spinning
  • Regulation-up
  • Regulation-down

ISO-NE (ISO New England)

  • Ten-min Synchronized
  • Ten-min Non-Synchronized
  • Thirty-min Operating
  • Regulation

MISO (Midcontinent Independent System Operator)

  • Spinning
  • Supplemental
  • Regulation

NYISO (New York Independent System Operator)

  • Ten-min Spinning
  • Thirty-min Spinning
  • Ten-min Non-Synchronized
  • Thirty-min Non-Synchronized
  • Regulation

PJM (PJM Interconnection)

  • Synchronized
  • Primary
  • Regulation

SPP (Southwest Power Pool)

  • Spinning
  • Supplemental
  • Regulation-up
  • Regulation-down

PowerDev provides Ancillary Service day-ahead, real-time prices, and load volumes for every ISO and sub-regions. All historical data is available, and live data can be monitored through the PowerDev dashboards. PowerDev also provides price and volume data for comparative analysis purposes between Ancillary Service types for different ISOs or within a specific ISO to determine the required services and their diurnal and monthly procurement seasonalities. Before digging into market analytics via PowerDev dashboards, here is the summary market information for Ancillary Services, their type, and requirements for each ISO.

CAISO (California ISO)

CAISO has two Ancillary Service regions and eight sub-regions. Each sub-region may have its own minimum requirements.

  • Regulation-up
    • Must immediately increase output in response to automated signals.
  • Regulation-down
    • Must immediately decrease output in response to automated signals.
  • Regulation Mileage-up/down
    • The absolute change in output between four-second set points.
  • Spinning Reserves
    • Synchronized to the grid.
    • Must respond within 10 minutes.
    • Must run for at least two hours.
  • Non-spinning Reserves
    • Must respond within 10 minutes.
    • Must run for at least two hours.

ERCOT (Electric Reliability Council of Texas)

There is only a single ERCOT region related to Ancillary Services in ERCOT service territory.

  • Regulation-up
    • Must immediately increase output in response to automated signals.
  • Regulation-down
    • Must immediately decrease output in response to automated signals.
  • Responsive Reserves
    • Must respond within the first few minutes of an event that causes a significant deviation from the standard frequency.
  • Non-spinning Reserves
    • Must respond within 10 minutes.
    • Must run for at least two hours.

ISO-NE (ISO New England)

ISO-NE has four different zones for Ancillary Service settlements: Southwest Connecticut, Connecticut, Northeast Massachusetts, and Boston, Rest of the System.

  • Regulation
    • Must immediately increase or decrease output in response to automated signals.
  • Ten-minute Synchronized Reserves (TMSR)
    • Synchronized to the grid.
    • Must respond within 10 minutes.
  • Ten-minute Non-Synchronized Reserves (TMNSR)
    • Must respond within 10 minutes.
  • Thirty-min Operating Reserves (TMOR)
    • Must respond within 30 minutes.

MISO (Midcontinent Independent System Operator)

MISO operates both a system-wide and zonal level Ancillary Service market, resulting in seven different Ancillary Services regions.

  • Regulation
    • Must respond fully within five minutes.
    • Online and synchronized with the grid.
    • Able to respond to automated signals.
  • Spinning Reserve
    • Synchronized with the grid.
    • Must respond within 10 minutes.
  • Non-Spinning Reserve
    • Not necessarily synchronized with the grid.
    • Must respond within 10 minutes.

NYISO (New York Independent System Operator)

NYISO's Ancillary Services are categorized into three regions.

  • Regulation
    • Must immediately increase or decrease output in response to automated signals.
  • Ten-min Spinning Reserves
    • Synchronized to the grid.
    • Must respond within 10 minutes.
  • Ten-min Non-Synchronized Reserves
    • Must respond within 10 minutes.
  • Thirty-min Spinning Reserves
    • Synchronized to the grid.
    • Must respond within 30 minutes.
  • Thirty-min Non-Synchronized Reserves
    • Must respond within 30 minutes.

PJM (PJM Interconnection)

PJM's Ancillary Services are split between two zones.

  • Regulation
    • Must immediately increase or decrease output in response to automated signals.
  • Synchronized Reserves
    • Synchronized to the grid.
    • Must respond within 10 minutes.
  • Primary Reserves
    • Must respond within 10 minutes.
    • Includes synchronized reserves.

SPP (Southwest Power Pool)

SPP operates with 16 balancing authorities, corresponding to five different ancillary service regions.

  • Regulation
    • Must immediately increase or decrease output in response to automated signals.
  • Synchronized Reserves
    • Synchronized to the grid.
    • Must respond within 10 minutes.
  • Non-Spinning Reserves
    • Not necessarily synchronized to the grid.
    • Must respond within 10 minutes.

More...

Start using PowerDev to experience its extraordinary capabilities and unmatched scope.