Carlos Matamala

The reduction in system inertia is creating an important market for frequency-containment Ancillary Services (AS) such as enhanced frequency response (e.g., provided by battery storage), traditional primary frequency response and inertia itself. This market presents an important difference with the energy-only market: while the need for energy production is driven by the demand from consumers, frequency-containment AS are procured because of the need to deal with the largest generation/demand loss in the system (or smaller losses that could potentially compromise frequency stability). Thus, a question that arises is: who should pay for frequency-containment AS? In this work, we propose a cost-allocation methodology based on the nucleolus concept, in order to distribute the total payments for frequency-containment AS among all generators or loads that create the need for these services. It is shown that this method complies with necessary properties for the AS market, such as avoidance of cross-subsidies and maintaining players in this cooperative game. Finally, we demonstrate its practical applicability through a case study for the Great Britain power system, while comparing its performance with two alternative mechanisms, namely proportional and Shapley value cost allocation.

Modern electricity grids throughout the world, particularly in islands such as Great Britain, face a major problem on the road to decarbonisation: the significantly reduced level of system inertia due to integration of Renewable Energy Sources (RES). Given that most RES such as wind and solar are decoupled from the grid through power electronics converters, they do not naturally contribute to system inertia. However, RES could support grid stability through appropriately controlling the converters, but currently no market incentives exist for RES to provide this support. In this paper we develop a methodology to optimally clear a market of ancillary services for frequency control, while explicitly considering the participation of grid-forming and grid-following inverter-based technologies. We propose a mathematical framework that allows to compute shadow prices for ancillary services offered by a pool of diverse providers: synchronous and synthetic inertia, enhanced frequency response (e.g. from curtailed RES) and traditional primary frequency response (e.g. by thermal generators). Several case studies are run on a simplified Great Britain system, to illustrate the applicability and benefits of this pricing scheme.