Frequency Linked Pricing as an Instrument for Frequency Regulation Market and ABT Mechanism

In this paper, a market framework for automatic balance services (ABS), both for primary as well as secondary regulation is implemented. The market structure is based on the assumption that the balance providers automatically respond to frequency dependent price signals sent by the ISO, when there is a frequency excursion in the system. An optimization models are implemented to obtain the market clearing prices for the individual regulation services. These obtained optimum frequency regulation contracts are incorporated within a dynamic simulation model of a two control-area system, and frequency regulation has been utilized as the important signal to maintain grid discipline under the new tariff structure under ABT regime to maintain grid frequency. This paper signifies the role of economic load dispatch as a useful tool for state beneficiaries in reducing their costs and promoting merit order dispatch under the new ABT regime. The results have been demonstrated through studies made on a 14 bus system.