When you flip a light switch, you expect instant power. Behind that simple action is a complex system of electricity ancillary service market that ensures the grid can handle sudden changes. These services are the "insurance policy" of the power system. They are not the energy itself, but the capabilities that allow energy to be delivered reliably. As variable renewables grow, the electricity ancillary service market is expanding, with new participants (batteries, demand response) and new market designs.
The broader ancillary services power market includes this segment. A key service is "frequency regulation." The grid operates at a nominal frequency (e.g., 60 Hz in North America). If generation exceeds load, frequency rises; if load exceeds generation, frequency falls. The electricity ancillary service market for "regulating reserve" (automatic generation control, AGC) corrects small, continuous deviations. The electricity ancillary service market for "fast" regulation (response in <1 second) is increasingly provided by batteries.
Another key service is "operating reserves." These are extra generating capacity (or load reduction) available to meet unexpected demand spikes or generation losses. The electricity ancillary service market for "spinning reserves" (synchronized to the grid, ready in 10 minutes) is essential for contingency events (e.g., loss of a large power plant). The electricity ancillary service market for "non-spinning" (or supplemental) reserves (offline, can start within 30 minutes) is also procured. The electricity ancillary service market for "replacement" reserves (slower, 60-120 minutes) is for longer-duration events.
The electricity ancillary service market for "voltage support" (reactive power) is often managed locally, with generators supplying reactive power within a specified power factor range. The electricity ancillary service market for "black start" services (the ability to start up without external power) is procured for critical generating units. The electricity ancillary service market is typically managed by Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs). They run day-ahead and real-time markets for energy and ancillary services.
The electricity ancillary service market for "co-optimization" (simultaneous optimization of energy and ancillary services) is standard. A generator may bid to provide energy and also sell its regulation capability when not producing energy. The electricity ancillary service market for "opportunity cost" (the revenue a generator forgoes by reserving capacity for ancillary services) is included in the bid. The electricity ancillary service market for "market power" is monitored to prevent manipulation.
Looking ahead, the electricity ancillary service market will see the integration of "distributed resources." A fleet of residential batteries, aggregated by a VPP, can bid into the regulation market. The electricity ancillary service market for "telemetry" (real-time monitoring of distributed resources) is a challenge. The electricity ancillary service market will also see "shorter" market intervals (e.g., 5-minute, 1-minute) to better match renewable variability. As the grid evolves, the electricity ancillary service market will be the platform for ensuring reliability.
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