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Title: Survey of U.S. Ancillary Services Markets

In addition to providing energy to end-consumers, power system operators are also responsible for ensuring system reliability. To this end, power markets maintain an array of ancillary services to ensure that it is always possible to balance the supply and demand for energy in real-time. A subset of these ancillary services are commonly procured through market-based mechanisms: namely, Regulation, Spinning, and Non-spinning Reserves. Regulation Reserves are maintained to respond to supply/demand imbalances over short time frames, typically on the order of several seconds to one minute. Resources that provide Regulation Reserves adjust their generation or load levels in response to automatic generation control (AGC) signals provided by the system operator. Contingency reserves are maintained to provide additional generation capacity in the event that load increases substantially or supply side resources reduce their output or are taken offline. The reserves are typically segmented into two categories, 1) Spinning or Synchronized Reserves that are provided by generation units that are actively generating and have the ability to increase or decrease their output, 2) Non-spinning or Non-synchronized Reserves that are provided by generation resources that are not actively generating, but are able to start up and provide generation within a specified timeframe. Contingencymore » reserves typically have response times on the order of ten to 30 minutes and can also be provided by demand-side resources that are capable of reducing their load. There are seven distinct power markets in the United States, each operated by a Regional Transmission Operator (RTO) or Independent System Operator (ISO) that operates the transmission system in its territory, operates markets for energy and ancillary services, and maintains system reliability. Each power market offers its own set of ancillary services, and precise definitions, requirements, and market mechanisms differ between markets. Despite the differences between markets, both in terms of services offered and system requirements, some broad trends generally apply. Regulation Reserves typically have the highest market prices, followed by Spinning Reserves and Non-spinning Reserves. Prices for Regulation Reserves have been the highest in the PJM market, since it opened in October 2012. This is partially because PJM experienced large price spikes during the period of extreme weather conditions in early 2014. ERCOT has traditionally had the highest prices for Spinning Reserves (called Responsive Reserves in ERCOT), including several periods of sustained high prices between 2010 and 2012. This can be explained in part by the relatively high penetration of variable wind resources and a similarly high requirement relative to peak load. ERCOT has also traditionally had the highest price for Non-spinning Reserves, followed by the NYISO East region. Both have experienced several periods of prolonged high prices since their inception, an occurrence that has not been regularly seen in other markets. In ISO-NE and PJM for example, the market clearing price for Non-spinning Reserves is typically $0/MWh more than 95% of the time. Market volume (in terms of the average amount of capacity of each service that is provided to a system) typically follows the reverse order of prices, as systems maintain the most Non-spinning Reserves capacity followed by Spinning Reserves and Regulation Reserves. PJM generally has the largest market for Regulation Reserves both in terms of capacity. The size of most Regulation Reserves markets in terms of capacity stay relatively constant year-to-year, as this is dictated largely by system requirements. PJM also generally has the largest Spinning Reserves market in terms of capacity. SPP, MISO, ISO-NE and SPP (beginning in 2014) all have Spinning Reserve markets with similar average capacity levels. When combined, the markets for Non-spinning and Operating reserves in ISO-NE have a comparable capacity to the market for Primary Reserves1 in PJM. SPP, MISO, and CAISO all have smaller markets for their respective Non-spinning Reserves products that are roughly the same size as each other in terms of capacity.« less
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  1. Argonne National Lab. (ANL), Argonne, IL (United States). Center for Energy, Environmental, and Economic Systems Analysis, Energy Systems Division
Publication Date:
OSTI Identifier:
Report Number(s):
ANL/ESD-16/1 Rev 1
DOE Contract Number:
Resource Type:
Technical Report
Research Org:
Argonne National Laboratory (ANL)
Sponsoring Org:
USDOE Office of Energy Policy and Systems Analysis (EPSA)
Country of Publication:
United States