Feasibility Analysis of Storage and Renewable Energy Ancillary Services for Grid Operations
Abstract
:1. Introduction
1.1. Electricity and Power Grid Characteristics
1.2. Energy from Renewable Sources Implications on the Power Grid
1.3. Ancillary Services Definitions
1.4. Ancillary Services Trading
2. Research Framing
3. Methodologies
4. Results
4.1. Comparative Analysis
4.1.1. The Israeli Power Grid Energy Market and Ancillary Services
Power Generation in Israel
Current Ancillary Services Schemes in Israel
Regulatory Framework for Ancillary Services Providers in Israel
4.1.2. California
Regulatory Framework and Responsibilities
Ancillary Services Types and Grid Requirements
Procurement Methodology and Market Design
Eligibility, Certification, and Prequalification of Service Providers
Technical Standards for Ancillary Services Providers
Reserve Activation, Dispatch, and Congestion Management
4.1.3. Germany
Regulatory Framework and Responsibilities
Ancillary Services Types and Grid Requirements
Procurement Methodology and Market Design
Eligibility, Certification, and Prequalification of Service Providers
Technical Standards for Ancillary Service Providers
Reserve Activation, Dispatch, and Congestion Management
4.2. Insights and Findings from Interviews with Experts
4.2.1. Strategic Importance, Challenges, and Feasibility
4.2.2. AS Role in Ensuring Stability and Reliability
4.2.3. Evolution of AS Provision
4.2.4. Regulatory Frameworks, Pricing Mechanisms, and R&D
4.2.5. Employment and Education Opportunities
4.2.6. Energy Security, Resilience, and Regional Characteristics
4.2.7. AS Provision, Necessities, and Limitations
4.2.8. Grid Infrastructure and Dependency on Conventional Resources
5. Discussion
6. Conclusions
7. Research Limitations and Recommendations for Future Research
Author Contributions
Funding
Data Availability Statement
Acknowledgments
Conflicts of Interest
Abbreviations and Nomenclature
Abbreviation | Meaning |
RESs | Renewable Energy Sources |
AC | Alternating Current |
aFRRs | Automated Frequency Restoration Reserves |
ANSI | American National Standards Institute |
ASs | Ancillary Services |
BG | Balancing Group |
BPMs | Business Practice Manuals |
CAISO | California Independent System Operator |
DAM | Day-Ahead Market |
DERs | Distributed Energy Resources |
DG | Distributed Generation |
DRESs | Distributed Renewable Energy Sources |
DSM | Demand Side Management |
DSOs | Distribution System Operators |
EC | European Commission |
EEG | German Renewable Energy Act |
EMS | Energy Management System |
ENTSO-E | European Network of Transmission System Operators for Electricity |
EnWG | Germany Energy Industry Act |
F-AS | Frequency AS |
FCR | Frequency Containment Reserve |
FERC | Energy Regulatory Commission |
GW | Gigawatt(s) |
Hz | Hertz |
IEA | Israel Electricity Authority |
IEC | Israel Electric Corporation |
IFM | Integrated Forward Market |
IT | Information Technology |
kW | Kilowatt(s) |
LV | Low Voltage |
mFRRs | manual Frequency Restoration Reserves |
MV | Medium Voltage |
MW | Megawatt(s) |
NERC | North American Electric Reliability Corporation |
NF-AS | Non-Frequency AS |
PNodes | Pricing Nodes |
PV | Photovoltaic |
REs | Renewable Energies |
RR | Replacement Reserve |
RTM | Real-Time Market |
SGs | Synchronous Generators |
SOs | System Operators |
StromNZV | German Electricity Network Access Ordinance |
StSys | Storage Systems |
TSOs | Transmission System Operators |
VRE | Variable Renewable Energy |
WECC | Western Electricity Coordinating Council |
Term | Definition |
Aggregator | Actor grouping generation systems act as single entities when engaging in the electricity markets. |
Balancing Group | Represent all accounts of power producers and consumers managed by a balancing responsible party. |
Balancing Service Provider | An entity in charge of submitting energy balancing bids. |
Capacity Market | A mechanism for revenue provision to power generation owners for their availability to supply power when needed. |
Day-Ahead Market | Buying and selling electricity on the day before the production and delivery. |
Demand Response | Balancing demand by encouraging consumers to change consumption patterns to match the actual power supply. |
Flexibility Measures | Actions and mechanisms are taken to balance supply and demand and support the power grid’s operability. |
Integrated Forward Market | Market for determining the best use of resources while seeking the least costly allocation. |
Market-Based Procurement | Procurement of electricity through competitive, transparent markets where prices are based on supply and demand rather than on regulated tariffs. |
Pricing Nodes | Specific locations on the power system where the system operator calculates prices. |
Real-Time Market | Near real-time, short-term market for balancing and dispatching supply, demand, and ancillary services. |
Self-Loading Systems | Autonomous self-provision of generation units with electricity needs without direct dispatching from the system operator. |
Self-Provided Ancillary Services | Grid-supporting functions supplied by market participants using their own resources. |
Time-of-Use Tariffs | Application of different prices at different times of the day. |
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Service | Where Provided | Where Procured | Procured By | How Often | Procurement Model | Type of Generation/Storage Units Participating |
---|---|---|---|---|---|---|
Regulation Up | Transmission | DAM, RTM | CAISO | Daily | Pay-as-Bid, Market-Based | Large Power Plants, Storage (≥100 kW), Demand Response |
Regulation Down | Transmission | DAM, RTM | CAISO | Daily | Pay-as-Bid, Market-Based | Large Power Plants, Storage (≥100 kW), Demand Response |
Spinning Reserve | Transmission | DAM, RTM | CAISO | Daily | Market-Based, Marginal Pricing | Large Power Plants, Storage (≥100 kW), Demand Response |
Non-Spinning Reserve | Transmission | DAM, RTM | CAISO | Daily | Market-Based, Marginal Pricing | Large Power Plants, Storage (≥100 kW) |
Voltage Control | Transmission and Distribution | Merit-Order Stack, Bilateral Contracts | CAISO | As Needed | Cost-Based for Public Utilities, Market-Based for Others | Large Power Plants, Some Storage, Industrial Loads |
Self-Provided AS | Transmission | IFM | CAISO | Daily | Self-Provision Allowed if Certified | Any Certified Generation or Storage |
Cascading Procurement | Transmission | RTM | CAISO | As Needed | Market-Based, Priority for Higher Quality AS | Large Power Plants, Storage (≥100 kW) |
Service | Where Provided | Where Procured | Procured By | How Often | Procurement Model | Type of Generation/Storage Units Participating |
---|---|---|---|---|---|---|
Primary Frequency Control (FCR) | Transmission | Pan-European Auctions | TSOs | Weekly | Pay-as-Bid | Large Power Plants, Aggregated Small Plants, Batteries, Demand Response |
Secondary Frequency Control (aFRR) | Transmission | National Auctions | TSOs | Daily (6 blocks of 4 h) | Merit-Order Auction (Capacity and Energy Price) | Large Power Plants, Batteries, Demand Response |
Secondary Frequency Control (mFRR) | Transmission | National Auctions | TSOs | Daily (6 blocks of 4 h) | Merit-Order Auction (Capacity and Energy Price) | Large Power Plants, Batteries, Demand Response |
Tertiary Frequency Control (RR) | Transmission | National Auctions | TSOs | Daily (6 blocks of 4 h) | Merit-Order Auction (Capacity and Energy Price) | Large Power Plants, Batteries, Demand Response |
Voltage Control | Transmission and Distribution | Bilateral Contracts | TSOs and DSOs | Per Demand | Fixed Tariff or Contractual Payments | Conventional Power Plants, Large-Scale Renewables, Industrial Consumers |
Reactive Power | Transmission and Distribution | Grid Connection Agreements | TSOs and DSOs | Per Demand | Fixed Tariff or Contractual Payments | Conventional Power Plants, Some Renewables, Industrial Loads |
Black Start | Transmission | Bilateral Contracts | TSOs | Annual Capacity Payment + Per Event Payment | Capacity Payment + Pay-as-Bid for Activation | Conventional Power Plants with Black Start Capability (Hydro, Gas, Some Coal) |
Congestion Management (Redispatch and Curtailment) | Transmission and Distribution | Redispatch Agreements, Curtailment Mechanisms | TSOs and DSOs | As Needed | Cost-Based Redispatch, Compensation per Adjusted MW | Thermal Power Plants, Large-Scale Renewables, Batteries |
Category | California (CA) | Germany (DE) | Relevance to Israel | Implementation Potentials |
---|---|---|---|---|
Frequency Regulation | CAISO procures up and down-regulation services for frequency fluctuations in real-time markets. It requires a quick response within a communicated time frame and amount as needed. | Germany uses a multi-tier approach for frequency regulation, using primary, secondary, and tertiary reserves. They are procured through transparent and competitive market mechanisms, where providers are compensated based on capacity availability and activation during frequency fluctuations. | Israel heavily relies on gas turbines. As the RES capacity in Israel increases, it must adopt more market-based solutions. Adapting real-time procurement of regulation (similar to California) will incentivise RESs and StSys to participate in frequency regulation. The competitive approach in Germany for reserves provides a model for integrating RES into frequency regulation. | Dual-payment model (capacity and activation payments) will incentivise RES and StSy participation in Israel. It will require regulatory changes and new designated market development. |
Voltage Control and Reactive Power | CAISO procures voltage support using a merit-order stack based on cost-effectiveness. Regional zones manage local voltage issues. | Reactive power compensation in Germany is provided through TSOs and DSOs using transparent, competitive auctions. These services are procured over different voltage levels. | Deployed inverters in PV systems to autonomously provide reactive power compensation are sought after in Israel. However, a compensation scheme is yet to be available. Establishing voltage regulation zones in high-RES areas could optimise voltage support services and improve grid stability. | Establishing regional zones for voltage control, as seen in California, in different grid levels, as in Germany, and integrating advanced inverters for autonomous reactive power compensation in RES systems can be a proper measure for the Israeli case. |
Black Start | No explicit mechanism for black start. | Requirements for black start capability from critical plants. Compensation occurs annually with capacity payments and activation payments when used. | Israel should further integrate storage systems to provide black start services, ensuring grid resilience. | Storage systems would need to meet black start requirements. The storage capacity needs further investment and expansion. Compliance with the infrastructure must be established. |
Congestion Management | LMP is used to incentivise RESs and StSys to provide services in areas with congestion issues. Procured in competitive day-ahead and real-time markets. | Redispatch and curtailment are used to manage congestion, with grid reserve capacity contracted through competitive bidding. Costs are passed onto consumers through grid fees. | Israel could establish congestion zones like California with a unified compensation mechanism to incentivise RES and StSy to participate in congestion management. A proper remuneration scheme for dynamic grid measures should be created to ensure fair compensation. | Establishing LMP and congestion zones in Israel could incentivise RES and StSy to participate in congestion management. The regulatory framework requires a reform to allow dynamic responses. |
Regulatory Frameworks | Operation under strict national standards, requiring periodic testing and compliance checks for AS providers. | AS procurement by TSOs and DSOs through competitive, transparent auctions, ensuring non-discriminatory access for all market participants. Compliance with EU directives ensures market efficiency. | A regulatory framework that allows market-based procurement of AS, supporting dynamic participation from RES and StSy is required. The development of certification processes for RE systems and storage technologies is necessary. | The regulatory framework in Israel needs a reform to include market-based AS procurement and participation as well as certification and performance. A set of standards is required. |
Pricing Mechanisms | Use of marginal pricing and pay-as-bid models for AS procurement, adjusting for real-time conditions in DAM and RTM | Use of pay-as-bid for ASs, with fixed payments for capacity and variable payments for activation. This ensures cost-efficiency and transparent pricing for all participants. | A competitive bidding system for ASs, using a dual-compensation system to incentivise RESs and StSys to participate, should be adopted. The pay-as-bid model could help ensure fair compensation for services provided. | The pricing system in Israel can be aligned with California and Germany to incentivise RES and StSy participation in AS markets, ensuring market efficiency and fair compensation. |
Grid Management | Participating systems must be automatically controllable and meet strict EMS response standards. CAISO manages the grid, focusing on balancing supply and demand in real-time markets. However, the grid needs a flexible management system to handle the growing share of VRE. In addition, CAISO oversees all AS in their grid. | TSOs must maintain reserves for grid constraints. Bilateral agreements require providers to have certain technical attributes, such as amount and availability. The TSOs and DSOs manage their grid and AS within their grid levels. Investments in infrastructure and system upgrades are planned to support higher RES penetration. | Technical standards for RES and StSy systems must be updated to ensure they meet the required control capabilities and real-time responsiveness. Adopting advanced grid management techniques such as RTM to manage the intermittency of RESs. | Implementing certification and testing protocols for RESs and StSys could be beneficial. It could be achievable with the right infrastructure and standards. Additionally, grid management capabilities must be upgraded to allow real-time adjustments to power fluctuations. |
Flexibility Measures | StSys are used to manage RES intermittency and real-time balancing, allowing flexibility to respond to fluctuations. | Flexible resources and redispatch are used to manage RES intermittency. TSOs are authorised to redirect generation for real-time power adjustments, managing fluctuations caused by RESs. | Implementation of market-based flexibility mechanisms to manage RES fluctuations is required. Storage solutions and demand-side management can be key for flexibility. | Introducing flexible scheduling and real-time adjustments in Israel would improve grid stability and promote the integration of more RESs. |
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Littwitz, E.; Ayalon, O. Feasibility Analysis of Storage and Renewable Energy Ancillary Services for Grid Operations. Energies 2025, 18, 2836. https://doi.org/10.3390/en18112836
Littwitz E, Ayalon O. Feasibility Analysis of Storage and Renewable Energy Ancillary Services for Grid Operations. Energies. 2025; 18(11):2836. https://doi.org/10.3390/en18112836
Chicago/Turabian StyleLittwitz, Evyatar, and Ofira Ayalon. 2025. "Feasibility Analysis of Storage and Renewable Energy Ancillary Services for Grid Operations" Energies 18, no. 11: 2836. https://doi.org/10.3390/en18112836
APA StyleLittwitz, E., & Ayalon, O. (2025). Feasibility Analysis of Storage and Renewable Energy Ancillary Services for Grid Operations. Energies, 18(11), 2836. https://doi.org/10.3390/en18112836