A Comprehensive Assessment of Markets for Frequency and Voltage Control Ancillary Services


Date & time: 
Fri, October 2, 2009 - 13:00
Duration / timezone: 

1 hour / Central European Time (Brussels, Paris, Berlin)


Yann Rebours, University of Manchester; Hans De Keulenaer, European Copper Institute


All users of an electrical power system expect that the frequency and voltages are maintained within acceptable boundaries at all times. Some participants, mainly generating units, provide the necessary frequency and voltage control services, called ancillary services. Since these participants are entitled to receive a payment for the services provided, markets for ancillary services have been developed along with the liberalisation of electricity markets. However, current arrangements vary widely from a power system to another.

This thesis provides a comprehensive assessment of markets for frequency and voltage control ancillary services along three axes: (a) defining the needs for frequency and voltages, as well as specifying the ancillary services that can fulfil these needs; (b) assessing the cost of ancillary services for a producer; and (c) discussing the market design of an efficient procurement of ancillary services.

Such a comprehensive assessment exhibits several advantages: (a) stakeholders can quickly grasp the issues related to ancillary services; (b) participants benefit from a standardised method to assess their system; (c) solutions are proposed to improve current arrangements; and (d) theoretical limitations that need future work are identified.

Download thesis by Yann Rebours (pdf - 3 MB)



Documents & links

Questions & answers

Prasad R 2: What is the difference in cost of ancillary services provided by generators v/s demand side resources(loads)?

The main cost components (fixed and variable) are the same for both generators and consumers. I did not look specifically to consumer costs, but we can highlight:

  • for the fixed costs, the consumer needs to have specific devices in order to provide ancillary services (e.g., a controller, an IT system to get connected with the system operator…)
  • for the variable costs, loads have clearly an opportunity cost if they participate in frequency control (loss of value from the delivered power). Furthermore, loads participating in ancillary services have certainly increased wear-and-tear costs.

Peiyuan chen: when we talk about reserve and cost of the reserve, we usually refer to spinning reserve (whatever this actually includes). But about the power contribution of generators due to the droop control? Should this be considered as one part of the cost of the 'total reserve' and how this should be evaluated?

Reserve used by the primary frequency control (also called governor response) is not part of the spinning reserve as defined in the section of the thesis: “the spinning reserve is the unused capacity which can be activated on decision of the system operator and which is provided by devices which are synchronized to the network and able to affect the active power”. Please note that the definition of spinning reserve is not universal and varies from one system to the other. The following working paper discusses further the concept of spinning reserve: Y. Rebours and D. Kirschen, "What is spinning reserve?" Release 1, The University of Manchester, 16 September 2005. Available: http://www.eee.manchester.ac.uk/research/groups/eeps/publications/reportstheses/aoe/rebours%20et%20al_tech%20rep_2005A.pdf

Concerning the cost due to primary frequency control reserve (e.g., because of the de-optimisation), it should be considered in the total reserve cost and was included in our study (section 3.4 “Day-Ahead De-Optimisation Cost for a Producer” of the thesis).

Anantharamiah Raja Rao: In India we have a frequency limits of 48.5 - 50.5 Hz What would be your comment on this? (this limit is used to stabilise the system and impose discipline)

Frequencies as low as 48.5 Hz during long periods can be stressing for large generating units, because of the increased torque applied on the turbine fins, amongst various impacts. However, 48.5 Hz as a transient is fine. Therefore, it is important to define the usage of this frequency range (normal, emergency…). The frequency deviation is a function of the frequency characteristic and the size of the imbalance. Hence, frequency deviations can be reduced by increasing the frequency characteristic and/or by giving incentives to avoid imbalances.

Juan Carlos Galvis: who should pay for ancillary services and how to assign that costs properly between customers?

Please refer to the section 4.8.2 “Allocation of system services costs” of the thesis. It is proposed to have the following cost allocation (which is difficult to implement in practice):

  • Fixed cost: shared by all users (transmission tariff)
  • Reservation cost: based on the potential utilisation of users
  • Utilisation cost: “polluter” pays

S.SURENDER REDDY: How to calculate Lost opportunity cost of a generator?

Please refer to the section 3.2.2 “Variable costs” of the thesis. In practice, the opportunity cost may be difficult to compute when it relies on fictitious market prices (e.g., the market prices would have changed by the sale of frequency control reserves on the energy market).

S.SURENDER REDDY: How to calculate the cost of reactive power provided by a generator?

Please refer to the section 3.2 “Main Cost Components of Ancillary Services” of the thesis, which gives an overview on this topic as well as various references such as Eurelectric (1997), Da Silva et al. (2001), Alvarado et al. (2003) or Elizondo et al. (2006).

Alastair Martin: In UK, demand side can't provide reactive/voltage services, because distribution network operators prevent it (even if transmission system operator wishes to buy it).  Are voltage services provided by demand side elsewhere?

In most of the systems, voltage services are indirectly provided by requiring the load to maintain its reactive power consumption within a given range. It is worth noting that in Spain this range is a function of the time of the day. For further information, please refer to: Ministerio de industria y energía, "Resolución de 10 de marzo de 2000, de la Secretaría de Estado de Industria y Energía, por la que se aprueba el procedimiento de operación del sistema (P.O. - 7.4) «Servicio complementario de control de tensión de la red de transporte»": BOE n° 67, 5204, 2000

Remark form Stephenbrowning: As regards demand participation and the distributors, we need the complete SMART' solution to enable participation to ensure distribution and transmission security


S.SURENDER REDDY: Which country has complete market for ancillary services?

This question is difficult to answer for two reasons. First, power systems across the world have different backgrounds and objectives. Hence, a “complete” solution that is used somewhere may be “incomplete” elsewhere. Second, markets for ancillary services of a power system cannot be seen as a whole, because situations can vary widely from one product to the other. For instance, PJM has a top-end spot market for regulation (= secondary frequency control), whereas the primary frequency control reserve is not even formalised.

Anantharamiah Raja Rao: When does it become advantageous to go for FACTS devices?

In theory, it becomes advantageous when the benefits of building and operating a FACTS device becomes higher than the benefits of building and operating other means such as generating units. As benefits depends on local conditions, there is no general rule: each project has to be assessed on a case-by-case basis. It is important to highlight that markets for ancillary services should have prices that reflects the real costs for providers. This is an essential condition in order to assess the viability of a FACTS project.

S.SURENDER REDDY: What is the difference between basic voltage control and enhanced voltage control?

“The basic or compulsory reactive power service encompasses the requirements that generating units must fulfill to be connected to the network. The enhanced reactive power service is a non-compulsory service that is provided on top of the basic requirements”. [section “Vocabulary” of the thesis]

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