The Italian Ancillary Service Market: Preliminary Cost-Benefit Analysis for BTS Demand Response

Abstract

The significant increase of unpredictable and fluctuating injections of energy into the grid by plants fed with Non-Programmable Renewable Energy Sources (NP-RES), and also connected at the distribution level, has triggered critical power system operation issues, which impact, e.g., on procurement and usage of resources for Ancillary Services (AS). In order to involve new resources, changes are needed both in terms of AS specifications and in the regulatory framework, and thus in the Ancillary Service Market (ASM) rules. In Italy, e.g., pilot projects have been started to allow medium-small generation units (including NP-RES ones), load units and Battery Energy Storage Systems (BESS), also in an aggregated form, to participate in the ASM to supply balancing resources (e.g. replacement reserve). In this work, a preliminary techno-economic analysis is carried out about how aggregated load units, in particular Base Transceiver Stations (BTS) for mobile communications, could supply Demand Response Services (DRS) as upward balancing services via participation in the Italian ASM. BTS flexibility could be further enhanced thanks to the presence of local backup sources, such as BESS or diesel generators. The BTS are assumed here to be available to curtail absorption from the main grid for a set availability time range (some hours); during interruptions, their energy supply is replaced by their backup sources. Economic evaluations are carried out by considering fixed-price offers for the curtailed energy, and CAPEX and OPEX for BTS control and communication systems enabling service supply. Results show good profitability if the pay-as-bid remuneration for the curtailed energy is complemented by a capacity remuneration.