Market Designs for the Primary Frequency Response Ancillary Service

Date Published: January 2014

Authors: Erik Ela, Vahan Gevorgian, Aidan Tuohy, Brendan Kirby, Michael Milligan, Mark O’Malley

As emerging technologies are introduced and begin to replace generation that offers frequency response in the U.S., innovative market designs could enable the provision of this grid service. This paper suggests implementing a primary frequency response (PFR) market in restructured pool-based power markets as a market design that incentivizes the provision of response reliably. It proposes to include PFR in the market clearing engine, with requirements for achieving sustainable and reliable response. Part II of the paper compares simulation results of various cases with and without PFR constraints, coming to the conclusions that (1) new market designs can affect other linked markets when performing co-optimization, (2) incorporation of PFR constraints may become critical in future systems and (3) pricing can reduce make-whole payments and ensure resources needed for reliability reasons are adequately incentivized.

See Part I See Part 2