Ancillary Services

Ancillary Services is a term which covers a wide range of different and specific activities that power system operators can contract in order to ensure security of supply: in particular balancing electricity supply with demand on a range of timescales down to “real time”. So typical examples (not an exhaustive list) include:

  • scheduling (of generators ahead of time, to deliver power when needed)
  • fast reserve (to supply extra energy at short notice if demand threatens to exceed supply)
  • demand response (adjusting demand rather than supply at short notice, when the two threaten to be out of balance)
  • frequency response (to maintain the correct grid frequency)
  • black start (to restart the grid following a blackout)
  • the provision of reactive power (a mysterious-yet-essential aspect of the physics of electricity transmission, required for voltage support: maintaining correct voltage levels within the grid)

There are a number of different entities that can supply the different ancillary services, from power generators to power storage operators to end-users and demand aggregators.

Most importantly, ancillary services have a value, so power system operators have to pay for them (and potential providers often bid via a market system in order to provide them, determining the price). As a general rule, the more urgent – short-notice – the requirement for a service, the higher the cost to buy them.

As an example, this source reported that the total cost of ancillary services in the UK market in 2014/15 was around £1 billion, adding £1.88 to the cost of each MWh generated. By comparison, average wholesale baseload electricity prices (spot) varied between around £35 and £50 per MWh during that period: so ancillary services accounted for ~4-5% of that cost overall.