Power ancillary services and grid management mechanisms are back on track

China Energy Storage Network: Looking at the development history of the "two detailed rules", the management mechanism of auxiliary services and power plant grid connection started from the first version of the "Regulations" and "Measures" issued by the former State Electricity Regulatory Commission in 2006. Over the past 15 years, it has gone through several stages of local compilation of detailed rules to create the "two detailed rules" management system and the exploration and deepening of the market-oriented construction of auxiliary services.

In recent years, my country's power system has undergone major changes in its power supply structure and grid structure. The scale of power installed capacity has continued to expand, clean energy has developed rapidly, and the grid-connected entities have become more diversified. The management of grid-connected operation and ancillary services is constantly facing new challenges. As this round of power reform continues to advance, how to effectively carry out grid-connected operation management for various types of entities in the power market environment, how to continue to promote the construction of the ancillary service market under the new situation, how to meet the operation and development needs of the new power system with new energy as the main body, and how to guide new industries and new formats such as new energy storage, electric vehicle charging networks, and aggregators to more standardized and effective grid-connected operation and participation in ancillary services, all require the relevant national competent departments to issue targeted management regulations and methods.

In this context, the National Energy Administration recently revised and issued the "Regulations on the Management of Power Grid Operation" (National Energy Administration Regulatory Regulation [2021] No. 60) and the "Measures for the Management of Power Auxiliary Services" (National Energy Administration Regulatory Regulation [2021] No. 61) (hereinafter referred to as the "Regulations" and "Measures"), which are not only important measures to implement the central government's decision to accelerate the construction of a unified national electricity market system, but also an important guarantee for promoting the construction of a new power system. The "Regulations" have a total of 6 chapters and 32 articles, focusing on the revision and improvement of grid-connected entities on the power generation side, including new energy, new energy storage, user-adjustable loads and other grid-connected management contents. The "Measures" have a total of 9 chapters and 40 articles, focusing on the providers of auxiliary services, classification of transaction products, and sharing mechanisms for power users. Specifically, the revisions to the "Regulations" and "Measures" are mainly reflected in four aspects:

First, "increasing projects": The Measures will expand the scope of auxiliary service providers from grid-connected power plants to new energy storage, self-contained power plants, traditional high-load industrial loads, commercial and industrial interruptible loads, electric vehicle charging networks, aggregators and other entities; the demand for auxiliary services needs to adapt to the development needs of the power system. In order to adapt to the larger scale of new energy grid connection, the Measures proactively introduce new types of auxiliary services such as rotational inertia, ramp climbing, stable machine cutting services, and stable load cutting services to ensure the safe operation of the power system, and reclassify power auxiliary services. "Increasing projects" is conducive to promoting the flexible adjustment capabilities of both supply and demand sides and adapting to the development needs of building a new power system.

The second is to "attract users": The Measures clearly state that a mechanism for sharing the burden of auxiliary services for power users will be gradually established, and sharing standards will be formulated according to the electricity consumption characteristics of different types of power users. Power users can participate in power auxiliary services independently or through entrusting agents. Many previous policy documents have also made it clear that the cost of auxiliary services is included in the user's electricity price. The document expands the user's interruptible load, which could only be adjusted downward in the past, to the user's adjustable load that can be "up and down". In the context of marketization, transmitting the pressure of auxiliary services to users will help guide the transformation of users' electricity consumption habits from "rigid" to "flexible" and enhance the "friendliness" of the power system.

The third is "setting a mechanism": The Measures emphasize that the compensation method and sharing mechanism should be determined in accordance with the principle of "who provides, who profits; who benefits, who bears"; the compensation mechanism for various types of power auxiliary services is clarified. Among them, the fixed compensation method should comprehensively consider the cost, performance and reasonable benefits of power auxiliary services when determining the compensation standard, and determine the compensation intensity according to the principle of "compensation cost, reasonable benefit"; the market-based compensation formation mechanism should follow the principle of considering the cost of power auxiliary services, reasonably determining the price range, and forming prices through market competition. In terms of sharing, it emphasizes that the power auxiliary services that serve the overall operation of the power system should be shared by all grid-connected entities such as power generation enterprises and market-based power users, and gradually include power users in the scope of compensation cost sharing. "Setting a mechanism" is conducive to promoting various types of auxiliary services to determine the service provider through market competition, improving the demand-side regulation capacity through market mechanisms, and enabling the market to truly reflect the supply and demand situation and form reasonable prices, thereby reducing the cost of system auxiliary services and better playing the decisive role of the market in resource allocation.

Fourth, "improvement": The Regulations further clarify that the scope of application is the grid-connected entities and new energy storage on the power generation side that are directly dispatched by power dispatching agencies at or above the provincial level (grid-connected entities on the load side and grid-connected entities within the dispatching jurisdiction of power dispatching agencies below the provincial level shall be implemented as a reference depending on their impact on the operation of the power system). The Regulations also further standardize operation management. According to the actual construction of the power market, the grid-connected entities should implement the market-clearing operation mode and power generation dispatching plan curve; further clarify the frequency and voltage regulation capabilities and specific indicators of the grid-connected entities on the power generation side, emphasize the assessment of unplanned outages/offline, etc.; and propose that the black start power supply must promptly and reliably implement the black start plan and other relevant regulations. In order to adapt to the large-scale entry of new entities into the power system, the Regulations clearly put forward the technical guidance and management content for new energy stations, new energy storage and adjustable loads on the user side, including relay protection, dispatching communication equipment, dispatching automation equipment, frequency regulation, voltage regulation, etc. At the same time, the Regulations and Measures clarify the responsibilities of energy regulatory agencies, power grid companies, power dispatching agencies, and power trading agencies in the revision and implementation of the implementation rules for grid-connected operation management in various regions, the implementation rules for power auxiliary services management, and market trading rules, and put forward more specific requirements for information disclosure. The improvement of many details is an effective exploration of solving new problems arising from the construction of the power market, and is also more conducive to the specific implementation of the two documents.

Fifteen years later, the revision and release of the two documents, "Regulations" and "Measures", will open up a new framework for my country's grid-connected operation, ancillary service management and top-level design of the ancillary service market. By expanding new entities of power auxiliary services, enriching new varieties of power auxiliary services, improving new mechanisms for user sharing, and improving new market-formed price mechanisms, it will better adapt to the characteristics of the new power system with multiple entities and benign interaction between sources, networks, loads and storage, better achieve connection with the electricity spot market, further improve the new energy absorption capacity, enhance the power supply reliability and operation safety of the power system, accelerate the construction of a new power system with new energy as the main body, and promote the clean and low-carbon transformation of energy.