Ancillary Service Market Research Articles

The Clearing Strategy of Primary Frequency Control Ancillary Services Market from the Point of View ISO in the Presence of Synchronous Generations and Virtual Power Plants Based on Responsive Loads

Since the increase in penetration of renewable energy sources connected to the system reduces the inertia of power systems, the penetration of these sources leads to increase in the requirements of primary frequency control (PFC) services. Fortunately, with the expansion of network intelligence platforms, responsive loads (RL) can be effectively useful in ancillary services in the near future and can be used like traditional power plants. Since these equipment have a high rate of change of status, if they are visible in the market by aggregating (with virtual power plant (VPP)), they can compete with synchronous generations (SG). Because the response speed of the participants in the market can affect the decision independent system operator (ISO) in determining the winning units, therefore in this article, we have proposed a market framework to create competition between SGs and VPPs in providing ancillary services. In the proposed framework, ISO minimizes the weighted sum of power purchase costs from VPPs and SGs. The proposed weighting coefficients express the response speed of each unit. In fact, the desired objective function is affected by two terms, cost and speed. The presented model has been simulated on a test system including four SGs units and one VPP unit in matrix laboratory (MATLAB) software and checked under five different scenarios. The comparison of the obtained results indicates an increase in the possibility of accepting units with a smaller weighting factor and a higher response speed (the meaning of accepting units are market players, i.e. SGs and VPPs).

Two-stage coordinated scheduling of hydrogen-integrated multi-energy virtual power plant in joint capacity, energy, and ancillary service markets

With the emergence of distributed resources (DRs), developing an effective, profitable, and green management method is of great importance. Virtual power plant (VPP) can aggregate various DRs, optimize their schedules, and participate in electricity markets uniformly to earn profit. The optimal scheduling problem in spot market has been widely studied, however, few studies have extended the services of VPP to the long-term scale. This paper proposes a coordinated scheduling method for a multi-energy virtual power plant (MEVPP), considering the integration of hydrogen facilities. A holistic market framework, including capacity market, energy market (EM), and ancillary service market (ASM) is developed jointly for the coordination among the annual capacity schedule, daily energy schedule, and daily reserve schedule of MEVPP. A hybrid hydrogen storage system including daily hydrogen storage and seasonal hydrogen storage is modeled to achieve both intraday and cross-seasonal peak shaving. Stochastic programming is used to tackle the uncertainties and risk management is considered by conditional value at risk. With the help of numerical analysis in case studies, it can be concluded that the proposed coordinated scheduling method can improve the economy of MEVPP. The profit from joint market decreases the total cost by about 52 %. The capacity adequacy and flexibility of MEVPP can be improved by the coordination of capacity and reserve services. The hybrid hydrogen storage system can realize the efficient integration of hydrogen and increase hydrogen production and consumption by about 9 %.

Interaction of Local Flexibility with National Ancillary Services Markets: Paving the Way for Türkiye’s Sustainable Grid

Interaction of Local Flexibility with National Ancillary Services Markets: Paving the Way for Türkiye’s Sustainable Grid

BESS and the ancillary services markets: A symbiosis yet? Impact of market design on performance

The evolution of ancillary services markets (ASM) and balancing products is ongoing. The aim of the evolution is to integrate the products over the national boundaries and to open the ASM to distributed energy resources (DERs). Among DERs, battery energy storage systems (BESS) are increasing their importance. In this work, we investigate by means of numerical simulations the effect of different evolutions in the regulatory framework on the performance of a BESS providing ancillary services. The analyzed regulatory barriers are selected based on ongoing evolution in EU market design. The following parameters are involved: power vs energy-intensive services, symmetry of procurement, time definition and distance to delivery. The considered case study is a BESS associated to a large-scale energy district including load, a cogeneration plant, and a PV plant. Results are given in terms of energy flows, economics, operational efficiency, and reliability of service provision. Where both reliability, provision of large flexibility volumes, and good economic performance are achieved, we say that there is a symbiosis between BESS and the markets. This way, the best ASM arrangements abating regulatory barriers for BESS are defined.

Hybrid strategy of flexibility regulation and economic energy management in the power system including renewable energy hubs based on coordination of transmission and distribution system operators

Energy management of energy hubs in the power system impacts both transmission and distribution networks and their operations. Hence, to enhance efficiency, there should be bilateral coordination between distribution and transmission networks. Moreover, thanks to including power sources, storage, and responsive loads, hubs can earn financial benefits from the energy and ancillary services market. Therefore, this paper presents the operation of distribution and transmission networks in the presence of flexible-renewable energy hubs based on transmission system operator (TSO)-distribution system operator (DSO) coordination according to the market clearing price modeling in energy and flexibility markets. The proposed scheme minimizes the sum of the expected operating costs of the networks and hubs minus the expected flexibility profit of the hubs. The scheme is constrained to optimal power flow equations of the networks, flexibility limit of the networks, and flexibility-operation model of renewable energy hubs located in transmission and distribution networks. The unscented transformation method is used to model the uncertainties of load, renewable sources, and stationary storage (aggregation of electric vehicles). Energy price and flexibility are among the dual variables of the problem. To simultaneously calculate these variables and the main variables of the problem, an integrated model of the suggested scheme based on the penalty function technique is extracted. Eventually, numerical results validate the capability of the scheme in enhancing the operation, economic, and flexibility status of the proposed scheme, in which renewable sources along with storage and responsive load in the energy hub can obtain 100 % flexibility conditions for the networks. They help enhance the economic and operation indices of distribution and transmission networks by about 26 %-44 % and 22 %-33 % compared to the case without hubs and renewable sources.

Incentive-compatible primary frequency response ancillary service market mechanism for incorporating diverse frequency support resources

Frequency vulnerability will be prominent in future low-inertia power systems with high renewable penetration, which calls for primary frequency response (PFR) services from a wide range of entities. The challenge, however, is to design effective and fair market mechanisms to incentivize diverse PFR resources. To this end, this paper proposes a PFR ancillary service market mechanism to ensure the security of frequency nadir and quasi-steady-state (QSS) frequency while providing equitable settlements to multiple PFR providers. First, bidding rules are designed for accurate depictions of dynamic performances from diverse PFR resources. Then, a PFR market-clearing model, incorporating frequency security constraints that explicitly express PFR providers' contributions, is developed to deploy sufficient PFR resources while maximizing social welfare. Finally, two unified marginal PFR prices are derived to reflect the scarcity of frequency support capabilities for maintaining frequency nadir and QSS frequency security, enabling fair settlements to successful bidders based on their contributions. Moreover, the pricing and settlement mechanism is theoretically proven incentive-compatible, ensuring the PFR market stability. Case studies verify the proposed PFR market's effectiveness in ensuring frequency security, providing fair incentives to diverse PFR providers, maintaining market stability, and supporting scalable implementations.

A Method for Calculating the Adjustable Capacity of Feeder Load Aggregators Considering the User’s Wishes

Abstract With the deepening of China’s energy reform, large-scale renewable energy access has put forward higher requirements for the flexible adjustment ability of the power system. The research and application of mining flexible and adjustable resources on the user side to participate in the peak regulation and frequency regulation of the power grid have received extensive attention. With the gradual opening of the power market and the deepening of the reform of the power system, the feeder load aggregator has gradually become a new role in the power market, and the feeder load aggregator plays an important role in the centralized management of users, the optimization of distribution, and the realization of market-oriented transactions. However, the research on the participation of feeder loads in the auxiliary services of power grid peak regulation and frequency regulation is not perfect. In this context, this paper proposes a method for calculating the adjustable capacity of feeder load aggregators considering the wishes of users, in which the maximum voltage adjustable at the feeder and the change of the capacity of each user caused by the feeder voltage regulation are calculated by the feeder load aggregator through the power flow relationship, and finally the adjustable capacity declaration for the ancillary service market is completed.

Multi-agent deep reinforcement learning based fully decentralized aggregation frequency regulation of electric vehicle

Electric vehicles (EVs) are high-quality flexible resources to provide frequency regulation services. However, the EV real-time participation in ancillary service market for frequency regulation (FRASM) under the existing aggregation framework faces data privacy and interest conflicts problems. To solve these issues, this paper proposes the fully-decentralized aggregator (FDA) as a trusted and non-profit agent to replace the traditional aggregator and help EVs interact with FRASM in a decentralized manner. Then a fully decentralized aggregation framework based on consortium blockchain is constructed to protect the interaction data security during frequency regulation process. Furthermore, the inference network is introduced so that EVs can learn better performance and optimize regulation mileage without sharing their private data. This paper proposes an inference network based multi-agent soft actor-critic (IN-MASAC) method that realizes the decentralized interaction between EVs and FRASM and considers multiple user preferences. The case studies demonstrate the efficiency and scalability of the fully decentralized aggregation framework and IN-MASAC method.

Speeding Up Renewable Energy Integration with Invisible Hands: Ancillary Service Market and the COVID-19 Natural Experiment

Speeding Up Renewable Energy Integration with Invisible Hands: Ancillary Service Market and the COVID-19 Natural Experiment

Vehicle-to-Grid Revenue from Retail Time-of-Day Rates, Compared with Wholesale Market Participation under FERC Order 2222

This article compares potential revenue from electric storage in retail and wholesale electric markets. The retail value can be extracted when storage responds to time-of-day retail prices. The wholesale value is enabled by the recent US Federal Energy Regulatory Commission Order 2222, which requires regional transmission operators (RTOs) to allow distributed storage behind the meter to participate in wholesale electric markets. To quantify the value of these markets, we use realistic time-of-day rates and market prices in one RTO’s ancillary service market. Formulae are developed to estimate the value of behind-the-meter storage in wholesale and retail markets, using an example electric vehicle in a fleet setting. The formulae are also used to compare whether or not net metering is available and different charging rates. The aggregate national storage behind the retail meter is very large, given the projected growth of electric vehicles. Our findings indicate the revenue from wholesale markets can be significantly more than that of retail opportunities. However, the potential in either retail or wholesale markets is currently limited by both state policy and incomplete RTO implementation of FERC orders.

An energy management system to schedule the optimal participation to electricity markets and a statistical analysis of the bidding strategies over long time horizons

This paper presents a tool that allows to perform an ex-ante estimation of the profitability to participate to the electric energy and service markets for a microgrid or a polygeneration power plant. The tool is the evolution of an Energy Management System (EMS) previously developed by the University of Genoa and Renantis Solutions Srl. Constraints are added to the original EMS to model the Ancillary Service Market (ASM) and Day Ahead Market (DAM) mechanisms in the framework of a planning tool that allows to get estimates of the microgrid/plant costs and revenues over a long-time horizon. As the market outcome strongly depends on the Transmission System Operator (TSO) acceptance/rejection of bids and offers, a statistical approach is proposed. The optimization process is split in two steps: the first one optimally dispatches the energy units and proposes DAM offers and ASM bid and offers over a specified time horizon. Then, a Monte Carlo method is launched; at each extraction the TSO acceptance/rejection of each ASM bid and offer is simulated and there is a second step of optimization in which the energy sources are optimally re-dispatched to meet the bidding program and so to avoid imbalance power exchange that would increase the energy cost. The cost/revenue is thus computed at each extraction. The result is the probability density function of the costs/revenues that allows to estimate the profitability of the participation to the electricity markets. One test performed on a real microgrid shows that the computational time needed to complete one iteration related to a time horizon of one month is approximately 20 s. Moreover, the comparison of the outcomes with two independent launches to define the set of bids and offers to be accepted in ASM demonstrates that the statistical analysis allows to avoid misleading conclusions on the costs/revenues. Consequently, the fact that the developed EMS allows to perform a statistical analysis in a reasonable time enables the possibility of comparing multiple scenarios and gives an indication related to the range of cost/revenues in which the microgrid/plant may incur. Finally, the computational efficiency of the proposed approach allows to conclude that the developed EMS is appropriate to perform a long-time horizon (of the order of magnitude of years) analysis and, at the same time, allows to model all the involved components with a high level of details.

Robust Optimization of Scale and Revenue for Integrated Power-to-Hydrogen Systems Within Energy, Ancillary Services, and Hydrogen Markets

Robust Optimization of Scale and Revenue for Integrated Power-to-Hydrogen Systems Within Energy, Ancillary Services, and Hydrogen Markets

FUNCTIONING OF THE MODERN ELECTRICITY MARKET IN UKRAINE AND PRICING FEATURES ON ITS SEGMENTS

Objective. The study aims to investigate the functioning peculiarities of the modern electricity market in Ukraine and pricing on its segments, and to justify proposals for their improvement. Methodology. To address the set tasks, a variety of methods and approaches were utilized in the work, including: abstract-logical – in defining the purpose and objectives of the research; analytical-monographic – in studying literary sources, legislative, and normative legal acts in the sphere of functioning of the modern electricity market in Ukraine; causal-analysis – in identifying a series of barriers hindering the development of the domestic electricity market; statistical-economic – in the process of collecting, processing statistical data and studying the results of energy market operation in 2020-2023. Results. The article examines the main aspects and problems of the functioning of the modern electricity market in Ukraine, based on competitive trading volumes of electricity in integrated market segments such as: day-ahead market, intraday market, bilateral contracts market, balancing electricity market, ancillary services market. Special attention is paid to the mechanism of electricity pricing. Scientific novelty. Recommendations for further liberalization of the electricity market in Ukraine regarding electricity pricing mechanisms on market segments are provided, which will help align price distortions, disproportions in market participants' calculations, and create competitive advantages in energy markets in Ukraine, based on the analysis of its operation results in 2020-2023. Practical significance. The recommendations provided in the article can be applied in the development of individual elements of Ukraine's Energy Strategy, creating conditions for sustainable development of Ukraine.

Fast Frequency Response for Future Low-Carbon Indian Power System: Challenges and Solutions

India has transitioned from being an energy-deficient nation to an energy-surplus nation. As of July 2023, India’s power system has seen a rapid transformation, with renewable energy, including large hydro, accounting for 40% of the total installed capacity at 177 GW. The ongoing energy transition has not only changed the country’s energy mix but also brought new challenges for system operators. The primary challenge is frequency instability due to the reduction of system inertia and governor-based primary frequency response (PFR) availability by large-scale integration of uncertain renewable energy resources (RES) such as wind and solar photovoltaic generators. Furthermore, the absence of frequency control ancillary services market, inadequate penetration of electric vehicles (EVs) and uncertainty of RES generation enhance the complexity of the frequency response services in the Indian power system. In this context, this paper presents a comprehensive review of the frequency response challenges of the future low-carbon Indian power system and underlines the new potential fast frequency response (FFR) services from advanced energy storage and renewable generation technologies. Such FFR services can be swiftly deployed in low-inertia grids through the integration of energy storage systems and inverter-based resources in a shorter span. Modeling of FFR services in security constraint unit commitment (SCUC) can enhance grid resiliency and facilitate high penetration of RES in the Indian power system without loss of frequency stability.

Design of an Enhanced Dynamic Regulation Controller Considering the State of Charge of Battery Energy Storage Systems

In recent years, the escalating electricity demand in Taiwan has heightened the prominence and discourse surrounding the issue of power supply. With the enactment of the European climate law, global commitment to achieving net-zero emissions has gained momentum. Concurrently, the Taiwanese government has articulated the Taiwan 2050 net-zero emissions policy. To realize this objective, Taiwan has vigorously promoted renewable energy in recent years, increasing the proportion of renewable energy in its energy mix. However, confronted with the intermittent and unpredictable nature of renewable energy generation, challenges arise concerning the stability and quality of power supply. In response to the impact of integrating renewable energy into the grid, the Taiwan Power Company (Taipower) has introduced the day-ahead ancillary service market. Through this platform, power generation and battery energy storage systems (BESSs) engage in competitive bidding, fostering the integration of diverse distributed energy resources into the system. These resources serve as dispatchable assets for Taipower, contributing to grid stability by providing ancillary services. This study has developed an advanced dynamic regulation reserve controller by employing an industrial PC (IPC) in conjunction with a multifunctional power meter. Through real-time measurement of the power grid frequency by the multifunctional power meter, a sophisticated dynamic frequency reserve control strategy has been devised, taking into account the charging state of energy storage systems. This strategy exhibits high operational quality, effectively regulating the charging and discharging of energy storage systems. In addition to swiftly adjusting the current grid frequency, it encompasses the capability to facilitate the transfer of peak electrical energy. This effectively stabilizes the power grid, alleviating supply pressures during nighttime peaks and enhancing the overall supply stability of the power system.

Redispatch Model for Real-Time Operation with High Solar-Wind Penetration and Its Adaptation to the Ancillary Services Market

Modern electrical power systems integrate renewable generation, with solar generation being one of the pioneers worldwide. In Latin America, the greatest potential and development of solar generation is found in Chile through the National Electric System. However, its energy matrix faces a crisis of drought and reduction of emissions that limits hydroelectric generation and involves the definitive withdrawal of coal generation. The dispatch of these plants is carried out by the system operator, who uses a simplified mechanism, called “economic merit list” and which does not reflect the real costs of the plants to the damage of the operating and marginal cost of the system. This inefficient dispatch scheme fails to optimize the availability of stored gas and its use over time. Therefore, a real-time redispatch model is proposed that minimizes the operation cost function of the power plants, integrating the variable generation cost as a polynomial function of the net specific fuel consumption, adding gas volume stock restrictions and water reservoirs. In addition, the redispatch model uses an innovative “maximum dispatch power” restriction, which depends on the demand associated with the automatic load disconnection scheme due to low frequency. Finally, by testing real simulation cases, the redispatch model manages to optimize the operation and dispatch costs of power plants, allowing the technical barriers of the market to be broken down with the aim of integrating ancillary services in the short term, using the power reserves in primary (PFC), secondary (SCF), and tertiary (TCF) frequency control.

Spillovers from ancillary services to wholesale energy markets

AbstractIn electricity markets, generators are rewarded for providing energy and for enabling grid reliability. The two functions are compensated separately: with energy market payments and ancillary services market payments. We provide evidence of changes in the generation mix in the energy market that are driven by exogenous changes in an ancillary services market. We provide a theoretical framework and quasi‐experimental evidence for understanding the mechanism: it results from the multi‐product nature of power plants combined with discontinuities in costs. Although much research focuses solely on the energy market, our results suggest that spillovers between the two markets are important.

Peer-to-peer energy trading participating in ancillary service market as federated power plants

The high penetration of distributed renewable energy resources (DERs) on the user side is essential for developing the low-carbon power system. Peer-to-peer (P2P) energy trading has emerged as an effective method to consume the DERs’ surplus energy locally. However, the uncertainty of massive DERs poses challenges to the system operation. We thus propose a coupling market framework, where the P2P energy trading market can participate in both energy and ancillary service markets. Since the operation problems are mainly caused by uncertainty sources (i.e., PV generations or wind turbines), these independent uncertainty sources are first charged with uncertainty marginal prices derived from the distributionally robust economic dispatch models. These payments can be allocated to reserve providers. Then, the P2P energy trading is modeled as an equivalent federated power plant (FPP) to provide ancillary services and energy for the other market entities. The FPPs’ reserve capacities are generated considering intra- and inter-FPP uncertainty. Finally, an extreme point scanning algorithm is developed to efficiently identify whether the FPPs can ensure the market operation and allocate the payments according to their reserve contributions. Case studies verify the theoretical properties and show the practicability of the proposed algorithms.

THE PARTICIPATION OF RESIDENTIAL CONSUMERS IN ENERGY MARKETS THROUGH DEMAND RESPONSE

Abstract. The article considers the approach to the interaction of the transmission system operator with consumers - the demand management mechanism, as well as its role and place in the energy markets. The tools and experience of implementation of demand management are described. With the help of a natural experiment, the possibility and effectiveness of the participation of consumers with household storage hot water boilers in the balancing market was evaluated. Optimizing the participation of large numbers of consumers in energy markets is a challenging problem, especially for portfolios with thousands or millions of flexible resources. One of the aggregator's tasks is to transform the functionality of automation technologies, such as a consumer's "smart" home, into products that could be traded on energy markets. The task of optimization consists in the effective and timely management of a large number of flexible resources. A key feature of demand management is the sale of managed load on a par with generating capacity. This is explained by the fact that, from the point of view of the balance, in the energy system, one kWh not consumed equals one kWh produced. As a result, the financial benefits of managing consumer electricity demand are equivalent to the prices of balancing services and the provision of capacity reserves from other market participants. The sale of a demand-side management resource can be implemented through balancing market (BM) and ancillary service market (SMS) instruments, which use TSOs to balance the power system. Attracting additional participants in RDP and BR should stimulate competition and allow TSOs to meet their needs for auxiliary and balancing services, which will positively affect the reliability of the energy system and increase competition. In general, the level of provision of the power system with reserves depends on a wide range of factors, including: different hours of the day, weather conditions or trading strategies of market participants, etc. The optimal way to involve household consumers in responding to demand is to use the services of aggregators. But this does not mean the simple accumulation of a certain resulting power of consumers. The quantitative and qualitative composition of the aggregator's portfolio should ensure the execution of OSP commands in full, even in conditions of unavailability of part of the boilers or other aggregated units. For this, it is necessary to have a certain reserve of regulating power, for example, other boilers or energy storage units for the possibility of their prompt replacement (reconfiguration) within the portfolio. Demand management in the power system can effectively reduce the peak load of the system and delay the necessary capital investment in additional generating capacity and transmission lines. In addition, demand management facilitates the integration of renewable energy sources and reduces the costs of setting up, starting or shutting down thermal power units during peak load periods. Consumer participation in demand management requires bidirectional communication infrastructure, advanced metering, efficient economic tariffs and energy management algorithms. With the rise of smart grid technologies and automated demand response systems, demand management systems are a key element expected to provide a cost-effective alternative to traditional generation-side solutions to meet increasing demand for electricity during peak load or high prices. Demand management competes with auxiliary services provided by "traditional" providers - power plants and is used by TSOs to stabilize UES parameters when the power grid faces unforeseen situations, accordingly, the development of this sector is an important component of energy security.

Research on Grid-Connected Optimal Operation Mode between Renewable Energy Cluster and Shared Energy Storage on Power Supply Side

The renewable energy cluster can reduce the total power deviation of renewable energy stations and also bring cooperative benefits to renewable energy stations. Shared energy storage can assist in tracking the power generation plan of renewable energy and has advantages in the scale of investment, utilization rate, and other aspects. Therefore, this article proposes a study on the grid-connected optimal operation mode between renewable energy cluster and shared energy storage on the power supply side. Firstly, for the complementary characteristics blurring each member’s contribution to the cluster power deviation, an improved Shapley value method is used to build a rational mechanism for apportioning the cluster power deviation penalty. Secondly, based on the Nash negotiation model and allocation mechanism, the revenue model of the renewable energy cluster is constructed, and an improved particle swarm optimization algorithm is proposed to solve the cluster operation strategy. Then, based on the charge and discharge demand of renewable energy cluster, with the goal of maximizing the benefits of shared energy storage, capacity pricing is optimized, as well as capacity allocation and participation in the frequency control auxiliary service market. Finally, the solving process of grid-connected optimal operation mode is proposed, and the rationality of the grid-connected optimal operation strategy between renewable energy cluster and shared energy storage is verified by example analysis. The results indicate that renewable energy cluster and shared energy storage can effectively increase both benefits, and a win-win situation for all parties can be realized. On the one hand, the cooperation mode and allocation mechanism can effectively guarantee the benefit of each renewable energy station. On the other hand, shared energy storage is beneficial for assisting in tracking the power generation plan of renewable energy and reducing the renewable energy power curtailment situation. There also has residual capacity in the shared energy storage system; it can participate in the frequency control ancillary service market, which can improve the capacity utilization rate and benefit of shared energy storage.