Regulation markets

Regulation markets

Image Courtesy: PJM Interconnection

markets that provide compensation to resources that have the ability to adjust output or consumption in response to an automated signal to correct for short-term changes in electricity use that might affect the stability of the power system. Assets are said to "play" in the markets.

In technical terms, the main goal of regulation is to keep the system’s area control error, or ACE (i.e. the difference between scheduled and actual electrical generation), within acceptable bounds, accounting for variations in the system’s frequency.

Pros

These markets align the technical and financial aspects of maintaining the balance between energy supply and demand.

Cons

These markets can be limiting to smaller resources and difficult or expensive to access.

Real Talk

Energy markets will be needed but they need to be shaped around new primary sources of PV and wind.

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