Ancillary services markets in europe: Evolution and regulatory trade-offs. (February 2022)

• Record Type: Journal Article
• Authors: Rancilio, G.; Rossi, A.; Falabretti, D.; Galliani, A.; Merlo, M.
• Is Part Of: Renewable & sustainable energy reviews. Volume 154(2022)
• Publication Date: 2022-02
• Subjects: Balancing markets -- Balancing product -- BSP -- Ancillary services -- Frequency regulation -- Fast reserve -- Trade-offs -- Dispatch -- NRA -- Regulatory barriers -- Distributed energy resources -- Bid size -- Asymmetric -- Aggregation; aFRR automatic Frequency Restoration Reserve -- ASM Ancillary Services Market -- BM Balancing Market -- BRP Balance Responsible Party -- BSP Balancing Services Provider -- CDS Central-Dispatch System -- CHP Combined Heat and Power -- DAM Day-Ahead Market -- DER Distributed Energy Resource -- DG Distributed Generation -- DK Denmark -- DKK Dansk Krone -- DLH Dynamic Low High -- DoF Degree of Freedom -- DSO Distribution System Operator -- EBGL Electricity Balancing GuideLine -- EFR Enhanced Frequency Response -- ESSs Energy Storage System -- FCR Frequency Containment Reserve -- FFR Firm Frequency Response -- GER Germany -- ISO Independent System Operator -- ITA Italy -- LFC Load-Frequency Control -- LFS Low Frequency Static -- LV Low Voltage -- MFR Mandatory Frequency Response -- mFRR manual Frequency Restoration Reserve -- MV Medium Voltage -- MW MegaWatt -- MWh MegaWatt-hour -- N/A Not Available -- NGESO National Grid Electricity System Operator -- NGET National Grid Electricity Transmission -- NRA National Regulatory Authority -- PAB Pay-As-Bid -- RES Renewable Energy Source -- RES-E RES in Electricity -- RR Replacement Reserve -- SDS Self-Dispatch System -- SMP System Marginal Price -- SO System Operator -- TSO Transmission System Operator -- UK United Kingdom; Renewable energy sources -- Periodicals; Power resources -- Periodicals; Énergies renouvelables -- Périodiques; Ressources énergétiques -- Périodiques; 333.794
• DOI: 10.1016/j.rser.2021.111850
• Languages: English
• ISSNs: 1364-0321

Abstract

Abstract: The generating power mix has deeply changed in the last years. Especially in Europe, the electric systems are evolving towards a more decentralized architecture, widely penetrated by renewable and distributed energy resources. These resources usually present less predictability and fast dynamics. To avoid jeopardizing the power system, they should be effectively included in the Ancillary Services Markets (ASMs), which procure the resources for balancing and safely dispatching the system. This work presents a meta-analysis of the evolution of ASMs and the underlying regulatory trade-offs. The evolutions are analyzed modularly to clearly investigate the benefit of each one. The analysis aims to provide an evaluation of each trend regarding the architecture, the services, and the products of the ASMs, based on the level of agreement of the two main counterparties: the system operator who manages the system and the Balancing Services Provider that delivers the service. The outcome is a ranking of the possible regulatory evolutions, with the win–win situations at the top and the cases that imply drawbacks for a counterparty at the bottom. The ranking can represent a guideline for regulatory authorities as well as market operators or players to realize effective market arrangements. Finally, a survey of European countries describes the effort of each one towards each evolution. Highlights: Ancillary services markets are evolving in Europe to integrate RESs and DERs. Asymmetric procurement or reserves is the main win–win evolution. Going towards marginal price and harmonizing the products can be beneficial as well. Central vs. self-dispatch system: an ongoing debate entailing many trade-offs.