On Some Aspects of Design of Electric Power Ancillary Service Markets

Abstract: Ancillary services are defined as all those activities on the interconnected grid that are necessary to support the transmission of power while maintaining reliable operation and ensuring the required degree of quality and safety. There are several activities of the operator that come under the preview of ancillary services. The definitions of some services and distinctions between some of them are often unclear.

This thesis attempts to examine three of the most important ancillary services provided by the independent system operator in a deregulated power system, that of maintaining the system voltage profile within acceptable limits, the system frequency around the nominal value and enough of spinning reserves to maintain the system security. A broad overview of how reactive power, spinning reserves and frequency regulation services are managed by the system operator in deregulated electricity markets around the world has been provided in the thesis. Subsequently, the thesis proposes models for participants in reactive power, spinning reserve and frequency regulation service markets to submit their offers. The thesis further deals with the optimal procurement of these ancillary services by the independent system operator. The optimal procurement schemes seek to achieve the most beneficial plan for the system, from both technical and economical perspectives. It is observed that the classical models for reactive power optimization or frequency control need to be refined and adjusted to suit the requirements of present day competitive electricity markets.