Regional ancillary services procurement in simultaneous energy/reserve markets

Ancillary services are essential to the reliability and security of power system operation in any competitive electricity market environment. Procurement of ancillary services must take into account effective use of the capacity under emergency conditions, delivery time, transmission limitations, and local area requirements. Regional procurement of ancillary services is an approach that results in effective distribution of reserves and ensures continuous reliability in the event of a contingency occurring anywhere in the system. However, most ISOs procure and price ancillary services based on the least-cost service with little regard to zonal dispersion. In general, such an approach is not sufficient to ensure continuous reliability and security of the power system This paper presents a new methodology and numerical examples for procuring and pricing ancillary services on a regional basis, with an explicit representation of imports in a simultaneous energy/reserve market environment.