What is energy storage & ancillary services?

1. Defining energy storage’s identity within the ancillary services market In the US electricity wholesale market, energy storage is viewed as a special type of power resource, defined as a non-generator resource (NGR). Unlike generators, an NGR can be flexibly dispatched to any level within their operating capacity range.

Do ancillary services affect energy storage investment returns?

When the market first opened, energy storage could obtain high value returns primarily in areas where ancillary services would receive compensation according to effectiveness. However, rapidly changing policies have had a major influence on the investment returns for energy storage that participates in the ancillary services market.

Can ancillary services be commercialized?

Energy storage has yet to reach a fully commercial stage, making marketization of ancillary services a challenge to commercial operations of energy storage. According to Wang Si, the key to solving the problem of ancillary services commercialization lies in the power market.

What are ancillary services?

Ancillary services are closely related to the construction of power markets, particularly spot markets. There is an urgent need to improve the ancillary services price mechanism through further power market reforms, and gradually link ancillary services market regulations with spot markets.

What are the ancillary services for green energy consumption?

“Combined energy storage and renewable energy costs are still high at the current stage. In order to promote green energy consumption, consumers must take on the costs of green energy development.” Ancillary services include frequency regulation, peak shaving, operating reserves, voltage control, blackstart, and other services.

Do market regulations support market entry of energy storage?

Current market regulations and related policies do not support market entry of energy storage. This is especially true of ancillary services market and spot market regulations, which cannot support the full participation of storage in the market, nor allow it to receive full benefits.