Feasibility of a Bilateral Market for Load Following

In the ongoing process to create a competitive electricity market, the problem of ancillary services is assuming a fundamental role. Ancillary services are those services performed by generators, transmission, and control equipment that are necessary to support basic -services and to maintain reliable operations and system security. In this paper, we focus our attention on one of these services, load following, and propose a competitive way to provide this service through bilateral contracts between supplier and customer. In general, we assume that there will be both a competitive market for the provision of load following and an authority responsible for the amount of load following not met by bilateral contracts.