Regulation markets are used to maintain grid frequency within strict tolerances, ensuring the grid operates reliably on a day-to-day basis without interruption.
Most power markets distinguish regulation-up and regulation-down as two distinct products. Resources provide regulation-up by increasing the rate of power injection onto the grid or decreasing the rate of power withdrawal. Resources provide regulation-down by decreasing the rate of power injection or increasing the rate of withdrawal. Battery storage resources can provide both products due to their unique ability to charge and discharge energy in response to a dispatch signal.
To ensure the grid has enough resources providing frequency regulation every day, capacity is first procured in the day-ahead market. If some of this capacity is needed in the real-time market, a percentage of the reserved capacity will be dispatched. Revenue is collected for the reservation of capacity for regulation in the day-ahead market, and for the provision of real energy, or total mileage/performance, in the real-time market.
In most power markets, regulation capacity is procured ahead of time, typically on an hourly basis in the day-ahead market. HOMER optimizes the participation of the resource in both the energy and regulation markets with consideration to the input variables:
Variable |
Description |
Reg-Up/Reg-Down Capacity Price Signal |
An hourly price signal that is used for economic optimization against committing capacity to the day-ahead energy market. |
Max Reg-Up/Reg-Down Storage Commitment |
This is the maximum amount of storage capacity that will be offered into the regulation market. HOMER will compete the resource’s capacity against the energy market to maximize revenue and may commit any amount of capacity to the regulation market up to this limit each time step. |
Min Reg-Up/Reg-Down Capacity Price |
This is the minimum Reg-Up/Reg-Down Capacity Price Signal needed to commit any capacity to the regulation market. For battery storage resources, it is recommended that this minimum price considers the cycling cost or degradation cost associated with high-frequency cycling. |
Energy Settlement |
The Storage Throughput value defines what percentage of the storage capacity committed to the Frequency Regulation Market will be dispatched as energy into/from the grid by the utility. If the Storage Throughput is defined as 10%, HOMER will inject/withdraw 10% of however much storage capacity is committed in each timestep into the grid. The State of Charge will adjust accordingly so the 10% of committed storage capacity cannot be utilized in any other market.
If Energy Settlement Revenue is enabled, this percentage amount will be used to calculate the energy settlement revenue. |
Reg-UpDown |
Combines both up and down regulations into a single product |
Adding Multiple Regulation Markets
HOMER Front supports participation in multiple regulation markets. Frequency regulation products such as Reg-Up, Reg-Down, and Reg-UpDown can all be stacked.
