Ancillary Services in Power System Transition Toward a 100% Non-Fossil Future: Market Design Challenges in the United States and Europe

TL;DR

This paper reviews the challenges and solutions for designing ancillary service markets to support a 100% renewable power system in the US and Europe, focusing on market design and stability issues.

Contribution

It provides a comprehensive review of current practices and proposes future solutions for integrating high levels of renewable energy into ancillary service markets.

Findings

Identification of key drivers for energy transition

Analysis of current US and European AS markets

Proposed solutions for technical and market design challenges

Abstract

The expansion of variable generation has driven a transition toward a 100\% non-fossil power system. New system needs are challenging system stability and suggesting the need for a redesign of the ancillary service (AS) markets. This paper presents a comprehensive and broad review for industrial practitioners and academic researchers regarding the challenges and potential solutions to accommodate high shares of variable renewable energy (VRE) generation levels. We detail the main drivers enabling the energy transition and facilitating the provision of ASs. A systematic review of the United States and European AS markets is conducted. We clearly organize the main ASs in a standard taxonomy, identifying current practices and initiatives to support the increasing VRE share. Furthermore, we envision the future of modern AS markets, proposing potential solutions for some remaining fundamental technical and market design challenges.