Frequency Regulation

Maintaining the system's frequency at 50 Hertz is critical. Every generator in a large power grid must spin at the same speed or the whole system might collapse. The grid will become unstable if the system's frequency differs slightly from 50 Hz. In those situations, power grid officials use frequency regulation to keep the system within the required range.

Consider a bathtub with a faucet and drain to represent a power grid. The amount of water in the tub is similar to the power grid's frequency. If the faucet is bigger than the drain, the level of water in the bathtub will rise.

If the supply in a power grid suddenly rises above demand, the frequency will rise above 50 Hertz. This might happen as a result of a large increase in supply (for example, if the wind picks up quickly and dramatically increases wind power output), or due to a significant decrease in demand.

Frequency regulation example
image source: Introduction to electricity markets, Penn State University

„The power system frequency is like water flowing in and out of the bathtub. The inflow of the water must exactly equal the outflow if we want the water level to stay constant."

If the drain is larger than the faucet, the water level will fall. The system frequency will fall below 50 Hertz if there is an increase in demand over supply in the power grid. This occurs most of the time because of a major drop in supply, such as when a large generator is disconnected from the grid. 

Typically, over-frequency events are easier for grid operators to handle than under-frequency events. If frequency starts to exceed 50 Hertz, this usually happens slowly and grid operators can respond by reducing output from some generators. Under-frequency incidents, on the other hand, can be more serious since they are frequently unexpected and result from the loss of a major source of electricity.

Once the system frequency drops to 50 Hertz, it must be returned to that frequency in three main phases:

  • Frequency containment reserve is activated automatically, without human involvement, as soon as the over-frequency condition occurs. The output of generators with frequency sensors will be adjusted automatically.
  • Secondary reserve is usually automatically activated between 30 seconds and up to 5 minutes if the under-frequency condition does not correct itself. Secondary frequency regulation is also known as automatic Frequency Restoration Reserve (aFRR)
  • Tertiary reserve In the event that the under-frequency incident does not self-correct through primary or secondary frequency regulation procedures, a few minutes later it is triggered by tertiary frequency control. This is also known as manual Frequency Restoration Reserve (mFRR). The power grid operator frequently manually adjusts the dispatch of some power plants as part of tertiary frequency control.

„A sudden drop in system frequency triggers an automated response to correct the frequency, followed by manual interventions from power system operators. Ancillary services provide these responses."

After the primary frequency regulation has been activated, and there is still a risk of frequency deviation, secondary frequency regulation is activated. Frequency regulation is usually purchased by system operators in competitive markets utilizing an auction process similar to the day ahead and real-time energy market. The market operator establishes how much frequency regulation capacity is required and generators make bids to be able to supply that service. This creates a price differential for frequency regulation.

In most electricity markets, providing frequency control to the grid operator means that the generator is ready to increase or reduce output (known as "regulation up" and "regulation down") by some amount. This means that the generator is also withdrawing capacity from the day-ahead/real-time energy market while promising to be able to produce power. For example, let's say a generator with a capacity of 100 MW sold 5 MW of capacity to the regulation market. This means that if necessary, the generator is ready to reduce production by 5 MW or increase production by 5 MW. As a result, the generator would not be able to provide more than 95 MW of its capacity to the day-ahead/real-time energy market and would have to ensure that at least 5 MW was available in the ancillary services market. 

The cost of regulation is divided into two parts. The first component is the reservation price, which is paid to generators for the capacity they dedicate to providing regulation. This is paid to energy producers based on the number of hours their device is reserved to provide regulation energy. Second, when a generator is called on to raise or reduce output in reaction to a frequency variation occurrence, it is compensated for the energy generated or not created. This is known as an activation payment and is usually based on the real-time price of energy in the intraday market.

Learn more about activation and reservation payments

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