Trading Ancillary Services for Frequency Regulation in Competitive Electricity Markets

With the introduction of the electricity market the system operators as well as the market operators are facing more and more unpredictable challenges. As a completive for the Day Ahead Market, the Balancing Market is meant to perform a more market oriented frequency regulation by using a merit order for real-time dispatch of the generators, particularly for the secondary regulation as well as for the tertiary regulation. Due to the social implications of the electricity market, the market mechanism should be designed so that to avoid market speculations of some participants and to obtain the smallest price possible of energy and ancillary services while maintaining a necessary active power reserve to ensure a certain level of the network security. Based on the actual expected changes in the generation sector of the Romanian power systems as well as the implementation of a possible regional market, the authors will propose some suggestions for the balancing market mechanism to maximize the reserves available for frequency regulation and to minimize the cost of the regulation energy. A comparison between actual implemented mechanism and the proposed mechanism will be performed.