IEEE Power & Energy Magazine - November/December 2017 - 75

ERCOT-which has seen its wind capacity grow to more than
19,000 MW and, at times, has had 50% of its instantaneous load served
by wind-has also evaluated changes to its set of reliability services.
cooperation with mandated regional operating centers to
cover multiple transmission system operator footprints.
The package places energy consumers at the heart of the
energy system and gives them the right to use aggregators,
service providers, and increased access to information and
dynamic pricing. In parallel, the package recognizes the
increasing role of distribution system operators (DSOs). It
also alludes to the potential need for increased flexibility and
reliability services.

New Ancillary Products Abound
In electricity markets around the world, the set of reliability
services that are incentivized through ancillary product markets differs by region. Furthermore, those services that were
most important to procure and incentivize in early market
designs may not be exactly the same as they are now, in the
face of new reliability challenges due either to VER creating a need (e.g., ramping) or VER displacing resources that
provided the service inherently (e.g., frequency response).
Numerous regions have responded to these challenges,
including changing reliability standards, either through redesigns of their ancillary products or incremental product additions to the existing set.
In Ireland and Northern Ireland, there is continued progress on the Delivering a Secure, Sustainable Electricity System
program. Operational policy has moved from a 50% system
nonsynchronous penetration (SNSP) level to a 60% level as of
early 2017. However, there are challenges that require resolution before the SNSP can be further increased, such as increasing the rate of change of frequency relay settings to 1 Hz/s.
Key to these new technical challenges is a fundamental
redesign of how performance is paid for. Phase 1 of the redesign, which was introduced in October 2016, changed the
framework from seven to eleven services, with an increased
value of €50 million to €75 million annually. By 2020, three
additional products will be introduced with a value of up to
€235 million. Put in perspective, the revenue of all system
services is moving from less than 2% to more than 10% of
total revenue earned by resources. In parallel, a qualifier trial
program was introduced to prove new technologies for service provision at small scale, allowing them to then provide
services competitively.
The Electric Reliability Council of Texas (ERCOT)-which
has seen its wind capacity grow to more than 19,000 MW and, at
times, has had 50% of its instantaneous load served by wind-
has also evaluated changes to its set of reliability services.
While the current ancillary service framework has performed
november/december 2017

well historically, there are several areas for improvement in
anticipation of a changing system. Some of the issues with the
current framework include the following:
✔ The services were generally based on inherent characteristics of traditional steam plants and not necessarily
technology neutral.
✔ Several services are currently bundled as a single service
and could be provided more efficiently if decoupled.
✔ Some new services are needed to ensure technical requirements, previously provided inherently by traditional technologies, are met.
✔ New and evolving reliability standards have been
introduced.
In 2016, ERCOT proposed a transition to a set of new
ancillary services, as shown in Figure 3. General guidelines
of this new framework were to be technology neutral, market based, needs driven, unbundled, and flexible for emerging technologies. This proposed set of services added and/or
redefined specific products currently used and disaggregated
elements within the current responsive reserve service into
several newly defined services. One unique feature of the
proposal was the recognition of the interdependency of different services to meet a reliability need. For example, to
meet the reliability need specified by the North American
Electric Reliability Corporation Frequency Response Obligation, the required amount of primary frequency response
depends on the amount of available fast frequency response
and synchronous inertia. This adds complexity to the market
design for these services.
In May 2016, ERCOT stakeholders decided against the
package as proposed. However, they continue to work with
ERCOT in considering new changes to help remove barriers
for new resource types and align with the changing needs of
the power system.

Ramp Proposals Now Implemented
New products that explicitly incentivize resource ramp flexibility have been part of a discussion in MISO, CAISO, Eirgrid, and others during recent years. In MISO, shortages
of ramping capability had been the most common cause of
short-term scarcities and price spikes. Flexibility becomes
critical for reliable grid operation and mitigation of these
scarcity periods, but the question of whether current market
design is sufficient to ensure this flexibility has always been
discussed. Can the market value flexibility and send transparent signals to incentivize resources to provide flexibility? Those
areas that have introduced ramping products determined that
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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - November/December 2017

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IEEE Power & Energy Magazine - November/December 2017 - Cover3
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