Economic evaluation of variable renewable energy participation in U.S. ancillary services markets

Variable renewable energy (VRE) is not yet meaningfully participating in U.S. ancillary services (AS) markets. VRE participation AS markets could provide a new source of revenue for resource owners to offset declining and capacity values tool power system operators address emerging constraints. This paper uses price-taker dispatch model historical prices estimate the economic value standalone hybrid (battery-paired) markets, from owner electricity perspectives, each seven independent operator regional transmission organization (ISO/RTO) where service are set. Across ISO/RTO average (2015–2019) simulated incremental revenues regulation market were $0.0–2.9/MWh (+0–15% without participation) $1–33/MWh (+1–69%) owners. However, reserve relatively thin have potential become saturated by storage projects that currently interconnection queues. In most reserves during periods with high prices, suggesting value. The analysis highlights relevance separate upward downward products indicates ISOs/RTOs might consider initially focusing on enabling provision AS.