IEEE Electrification Magazine - September 2015 - 54

signal. The performance score metric
consists of three equally weighted components: accuracy, delay, and precision.
For each hour that a resource is operating in the regulation market, it will
receive a performance score (a value
between 0 and 1.0) which becomes a
2013
direct multiplier on the revenue earned
2014
for that hour as shown in Figure 2.
For resources that choose to fol0
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
Nameplate Megawatts
low the dynamic signal, an added
incentive is applied based on the
Figure 1. The total U.S. installed generation capacity over the last two years. The combined
additional ramping incurred cominstallation of wind and solar is keeping pace with natural gas.
pared to a traditional resource. Additional ramping is calculated as mileThe first change was to create two different control sigage, which is the sum of the absolute value of the change
nals-one for traditional resource types and the other for fastin dispatch between each interval. For example, if a
responding resources called dynamic resources. These two
resource was dispatched from 10 MW down to 9 MW, then
signals work together to balance the PJM system frequency
down to 8 MW, and then back up to 10 MW over three
and area control error (ACE), proportioning a greater amount
intervals, it has traveled 4 MW mi. The total distance travof system frequency control and thus ramping to fasteled by a fast-response resource compared to the traditionresponding resources and a greater amount of ACE balancing
al control signal is considered the mileage ratio and is used
to traditional resources. Under the old single-signal control
as a multiplier in settlements to compensate resources for
system, traditional resources often were not quick enough to
additional ramping costs incurred. In Figure 3, the mileage
ramp in the opposite direction during significant swings in
ratio between the traditional signal and the dynamic signal
regulation up and regulation down and, thus, were "fighting"
for the particular hour shown was 2.67.
the signal and working against system control. By assigning a
After implementing "pay-for-performance" regulation
greater proportion of these significant ramping events to fastin 2012, PJM reduced the total amount of megawatts proresponding resources, less stress is placed on traditional
cured for this service from 1% of peak load down to 0.7%
resource machinery.
and then again to a fixed amount of 700 MW on-peak and
Second, a new market compensation structure rewards all
525 MW off-peak, reducing the total cost of the service and
resources according to a calculated performance score and
freeing up existing capacity to provide energy or other
incrementally rewards fast-responding resources based on
reserves. The market has responded to a more transparent
the additional ramping associated with the fast-response
and intricate valuation mechanism. Since implementing
Fuel Type

Natural Gas
Utility-Scale Solar
Wind
Other Solar
Coal
Biomass
Hydro
Oil
Geothermal
Waste Heat
Nuclear
Other

100
80

Assigned Regulation (MW)
Regulation Control Signal (MW)
Regulation Response (MW)

60
40
20

1
10
19
28
37
46
55
64
73
82
91
100
109
118
127
136
145
154
163
172
181
190
199
208
217
226
235
244
253
262
271
280
289
298
307
316
325
334
343
352
361

0
-20
-40
-60
Figure 2. An example of regulation performance score. Here, a combined-cycle natural gas plant follows the PJM control signal and receives a
78% score (accuracy, 0.95; delay, 0.66; and precision, 0.74).

I E E E E l e c t r i f i cati o n M agaz ine / SEPTEMBER 2015

Table of Contents for the Digital Edition of IEEE Electrification Magazine - September 2015