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What Are Ancillary Services and Why Do Power Grids Need Them?

Updated: Feb 27, 2019

Modern power grids are extremely complex systems, balancing energy generation and consumption in real time. Grid operators must manage a varied mix of power generation technologies to meet a constantly shifting demand, and with the rise of small-scale renewable sources and energy storage the complexity of power grid operation will only increase. In order to be a reliable source of electric power, a grid must offer three main operating characteristics:

  • Voltage Stability: The electrical equipment used in homes and businesses is designed to operate at a specified voltage value. Some types of equipment tolerate slight variations above or below their rated voltage, but over-voltage and under-voltage are detrimental for the performance and service life of equipment in general. There are voltage regulation measures that can be deployed at client premises, but the power grid is responsible for providing a stable output.

  • Frequency Stability: Frequency is the other key variable that describes a power supply, and national power grids typically operate at a fixed frequency, in most cases 50Hz or 60Hz. Just like in the case of voltage, many types of electrical equipment are sensible to frequency fluctuations.

  • Continuous Power Supply: When a power grid suffers from constant blackouts, consumers are forced to rely on backup generators, which are expensive to operate.

Power grid fluctuations normally occur when there is an event that creates an instantaneous mismatch between power generation and consumption. Some examples of these events are:

  • Large-scale faults that trip a high-voltage circuit breaker can cause a sudden and drastic reduction in power grid demand, by disconnecting thousands of consumers at once.

  • Faults at a power plant can have the same effect, but in this case creating a shortage of power supply.

  • Sudden peaks in demand may come from human activity, for example when thousands of homeowners are activating their heating systems at once, or if several industrial customers are starting large motor loads simultaneously.

  • The weather can cause fluctuations in the energy output of VREs. For example, strong winds can cause a sudden peak in output from wind farms, and cloud formations can cause a sudden drop in production from utility-scale solar arrays.

When these events present themselves, the power grid is forced to react and balance supply and demand. In general, excessive supply tends to drive up voltage and frequency, while demand peaks have the opposite effect.

While is true that power grids are now more challenging to manage, there are also powerful tools that were not available a few years ago. The Internet of Things will convert electrical appliances and vehicles into smart devices, whose energy consumption can be coordinated and managed with software, saving money for utility companies and their clients alike.

Reactive Power and Voltage Control

Not all power drawn by utility clients is consumed. The portion of power that is consumed is called real power, but there is also reactive power, which oscillates between the point of consumption and the power grid without net consumption. However, reactive power increases line currents, which results in higher transmission and distribution losses.

Synchronous generators can adjust their operating characteristics to supply or absorb reactive power, and this is a very important ancillary service because it stabilizes voltage. Of course, it is possible to balance reactive power at the point of consumption, and this is the best approach because the transmission and distribution load on the power grid is reduced.

  • When reactive power consumption increases, grid voltage tends to drop.

  • On the other hand, surplus reactive power generation raises voltage.

As previously explained, both situations can be detrimental for equipment connected to the power grid supply, hence the importance of voltage stability.

Frequency Regulation

The portion of VRE sources in the generation mix of power grids is constantly increasing, and this creates a challenge: as a whole, grids have less inertia in the form of rotating machinery, and are more susceptible to events that may raise or decrease frequency within seconds. Fortunately, inertia can be simulated with energy storage, for example by using dedicated battery arrays that absorb or supply energy within milliseconds to compensate for fluctuations:

  • If power grid frequency peaks, utility-scale battery arrays can absorb power to stabilize frequency.

  • On the other hand, if frequency is reduced, energy is injected into the grid to stabilize it.

Although the operating principle is very similar to that of energy arbitrage, the main difference is timeframe – energy arbitrage consists on storing energy when generation costs are low to avoid high-cost peaking power plants, while frequency regulation occurs within seconds, or even milliseconds in the case of enhanced frequency response (EFR).

Currently, frequency regulation is considered the most valuable ancillary service that can be provided by energy storage, even more valuable than energy arbitrage. According to research by the Rocky Mountain Institute in California, energy arbitrage with battery systems has a maximum value of around $100/kW-year, but in the case of frequency regulation it rises to $200/kW-year. Also, energy storage must not necessarily be concentrated at large-scale facilities – it is also possible to use data analytics and software to aggregate storage capacity distributed among multiple customer locations.

Operating Reserve

In simple terms, operating reserve is generation capacity that is available for the power grid, but not being used at a given moment. Operating reserve can be classified into spinning and non-spinning reserve.

Spinning Reserve

As implied by its name, spinning reserve is spare capacity found on generators that are currently supplying energy to the grid. Since the generator is already spinning at rated RPM, there is no mechanical inertia to overcome and increasing the power output is as simple as increasing torque on the generator’s shaft.

An example of spinning reserve would be if a turbine-generator set rated at 50 MW is providing 35 MW. In this case the available spinning reserve is 15 MW.

Non-Spinning Reserve

Also called supplemental reserve, this is generating capacity that is available for use but is not currently spinning and disconnected from the grid. Since the generator is static, there is mechanical inertia to overcome and the response time is longer than that of spinning reserve.

How Are Battery Systems Classified?

Battery arrays used for ancillary services have no rotating parts, and they can typically respond within fractions of a second. Their operating flexibility allows batteries to take over the role of both spinning and non-spinning reserve.

Energy Arbitrage

Power grids are subject to the most demanding operating conditions during peak demand: total generation capacity may operate close to 100 percent, while power lines experience the highest currents and losses. Energy storage has the potential to shift consumption away from peak demand hours, reducing the need for peaking power plants. In addition, if storage is located at the point of consumption, it can also contribute to grid decongestion because energy is transmitted beforehand, during low-demand hours.

Unlike voltage regulation, frequency regulation and operating reserve, energy arbitrage is not a mandatory service for power grid operation. However, it can greatly improve the integration of renewable sources with existing power grids, while reducing dependence on fossil fuels and contributing to grid decarbonisation.

The Potential of Small-Scale Storage

Ancillary services can be delivered by both bulk and distributed storage. In the case of distributed storage, there is an extra degree of complexity because multiple systems have to be coordinated, but this can be addressed with monitoring, data aggregation and real-time analytics. Distributed storage is also more valuable, due to the fact that is benefits are available for both utility companies and their customers.

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