Provision of ancillary services by electric vehicles and energy storage systems [Part 2/2: New market participants]

Ancillary services need to be adapted continuously to the increasing complexity and demanded flexibility of modern electric power systems. In the traditionally regulated energy markets, ancillary services were usually provided by integrated electric utilities. The transition towards Smart Grids requires a transformation of the traditional energy markets from hierarchical based power systems towards open distributed smart power systems.

The Smart Grid integrates the operation of all connected users (electricity producers, users and prosumers) in order to ensure a safe, efficient and sustainable delivery of electricity. Challenges related to the provision of ancillary services in Smart Grids are mainly due to the characteristics of these systems involving, among others, new types of market participants, renewable energy sources and distributed energy resources. Market, business and cost models related to ancillary services of Smart Grids require changes on the corresponding regulatory frameworks.

Future Smart Grids and ancillary services will have two key components, intelligence and power electronics. Intelligence will come from innovative technologies applied to components and interfaces. Power electronics will be the enabling technology for future generators, loads and energy storage-based devices.

Future provision of ancillary services and new market participants

Ancillary services markets are nowadays open to a wide range of new participants, such as large-scale renewable generation and energy storage systems, grid connected devices like power electronics switched compensation devices, and providers of DERs including demand response, small-scale energy storage systems, distributed variable renewable generation and plug-in electric vehicles.

Wind turbine generators and energy storage systems are capable of providing nowadays different levels of synchronous inertial response. Inertial response has been traditionally provided by large thermal generators and large hydropower plants. Although such frequency disturbances can be addressed using fast frequency response services, synchronous inertial response can provide a more reliable and faster response.

Solar photovoltaic power plants and energy storage systems having power electronics interfaces with the electric power system can provide reactive power support. Reactive power helps to maintain voltages in the system within prescribed limits. Reactive power support is especially important when there is large generation in areas far from main load centres or connected to main load centres via a weak electric power system.

Distributed energy resources such as rooftop solar photovoltaic systems, behind-the-meter energy storage systems, plug-in electric vehicles, and commercial and industrial loads, can provide ancillary services to system operators through price-based incentives, often referred to as “explicit demand response”. By increasing liquidity and competition in the ancillary services markets, DERs can also help lower ancillary service procurement costs. DERs are allowed to participate in the markets independently or through aggregators or retailers, depending on the market design in place.

Ancillary services and electric vehicles

Plug-in electric vehicles (EV for short) have the potential to become a key component in providing ancillary services for the electric power system. They can behave like distributed energy storage systems and have the potential to discharge power back to the electric power system through unidirectional controlled charging (V1G for short) or through vehicle-to-grid technology (V2G for short).

EVs have the ability to supply power at a very fast rate which enables them to be used for providing several ancillary services helping to improve grid stability. Their power capacity is limited; thus, a single EV cannot provide these services for the period of time needed by the electric power system. However, when EVs are aggregated they can complement one other, resulting in a virtual power plant with a fast response and the ability to provide ancillary services for the needed period of time.

Smart charging and discharging of EVs can provide flexibility at both the system level and the local level. At the system level, smart charging could facilitate balancing in the wholesale market. With V1G, the EV charging patterns could be controlled to flatten peak demand, fill load valleys and support real-time balancing of the electric power system by adjusting the charging levels. With V2G, by injecting electricity back to the grid, EVs could also provide ancillary services to TSOs. Smart charging could also help DSOs manage congestion and end users manage their energy consumption.

Ancillary services and energy storage systems

Energy storage systems have nowadays an important role in increasing the efficiency of the electric power system and ensuring its stable operation by their ability to provide several ancillary services in real time and, if necessary, independently from the electrical grid.

The main ancillary services provided by energy storage systems are related to regulation and reserves. Regulation services are used to balance electricity supply and demand on short-notice. Reserve services generate additional electricity used to compensate capacity loss due to the unexpected unavailability of power generation. Additional ancillary services have become recently more viable as the costs of energy storage systems have decreased and energy storage becomes a more integral component of the electric power system.

Ancillary services have provided a foundation for emerging energy storage technologies in several markets around the world. These services are attractive for developers of energy storage projects as they often have either structured contracts or well-established competitive markets that provide a reliable source of revenue.

There is an increasing number of energy storage technologies available in the market that can be used to provide ancillary services. Reducing the barriers that energy storage technologies face to become possible participants of ancillary services markets will help developers to obtain additional sources of revenue for different services provided, enabling financial feasibility.

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About the author:

Pedro Esteban is a versatile, multicultural and highly accomplished marketing, sales, business development and project leader who holds since 2002 a broad global experience in sustainable energy transition including renewable energy, energy efficiency and energy storage. He has been a leading expert at several management positions at Merus Power, General Electric, Alstom Grid and Areva T&D, and he is currently working at Circutor.