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Incentive-compatible primary frequency response ancillary service market mechanism for incorporating diverse frequency support resources

Author

Listed:
  • Li, Kun
  • Wei, Lishen
  • Fang, Jiakun
  • Ai, Xiaomeng
  • Cui, Shichang
  • Zhu, Mengshu
  • Wen, Jinyu

Abstract

Frequency vulnerability will be prominent in future low-inertia power systems with high renewable penetration, which calls for primary frequency response (PFR) services from a wide range of entities. The challenge, however, is to design effective and fair market mechanisms to incentivize diverse PFR resources. To this end, this paper proposes a PFR ancillary service market mechanism to ensure the security of frequency nadir and quasi-steady-state (QSS) frequency while providing equitable settlements to multiple PFR providers. First, bidding rules are designed for accurate depictions of dynamic performances from diverse PFR resources. Then, a PFR market-clearing model, incorporating frequency security constraints that explicitly express PFR providers' contributions, is developed to deploy sufficient PFR resources while maximizing social welfare. Finally, two unified marginal PFR prices are derived to reflect the scarcity of frequency support capabilities for maintaining frequency nadir and QSS frequency security, enabling fair settlements to successful bidders based on their contributions. Moreover, the pricing and settlement mechanism is theoretically proven incentive-compatible, ensuring the PFR market stability. Case studies verify the proposed PFR market's effectiveness in ensuring frequency security, providing fair incentives to diverse PFR providers, maintaining market stability, and supporting scalable implementations.

Suggested Citation

  • Li, Kun & Wei, Lishen & Fang, Jiakun & Ai, Xiaomeng & Cui, Shichang & Zhu, Mengshu & Wen, Jinyu, 2024. "Incentive-compatible primary frequency response ancillary service market mechanism for incorporating diverse frequency support resources," Energy, Elsevier, vol. 306(C).
    • Handle: RePEc:eee:energy:v:306:y:2024:i:c:s0360544224021133
    DOI: 10.1016/j.energy.2024.132339
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    References listed on IDEAS

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    Cited by:

    1. Yang, Jun & Peng, Qiao & Liu, Tianqi & Liu, Youbo & Gu, Tingyun & Meng, Jinhao, 2025. "Fast global flexible power point tracking of photovoltaic systems under partial shading condition with tracking-affiliated environmental parameter estimation," Energy, Elsevier, vol. 318(C).
    2. Wenqi Hao & Yuxing Liu & Tao Wang & Mingmin Zhang, 2024. "Model for Joint Operation of Multi-Energy Systems in Energy and Frequency Regulation Ancillary Service Markets Considering Uncertainty," Energies, MDPI, vol. 18(1), pages 1-18, December.
    3. Changsen Feng & Zhongliang Huang & Jun Lin & Licheng Wang & Youbing Zhang & Fushuan Wen, 2025. "Aggregation Model and Market Mechanism for Virtual Power Plant Participation in Inertia and Primary Frequency Response," Papers 2503.04854, arXiv.org, revised Jan 2026.
    4. Li, Kun & Fang, Jiakun & Ai, Xiaomeng & Wang, Shengshi & Liu, Jingguan & Cui, Shichang & Yao, Wei & Wen, Jinyu, 2025. "Aggregation and scheduling of massive 5G base station backup batteries using a price-guided orientable inner approximation method," Applied Energy, Elsevier, vol. 380(C).

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