Interpretation of the "Two Detailed Rules" for Auxiliary Services in the Southern Region

China Energy Storage Network News: At the end of March 2022, the Southern Regulatory Bureau of the National Energy Administration issued the "Implementation Rules for the Management of Power Grid Connection Operation in the Southern Region", "Implementation Rules for the Management of Power Auxiliary Services in the Southern Region" and related special implementation rules for comments (hereinafter referred to as the "Draft for Comments on the 'Two Rules' in the Southern Region"). In response to the "Regulations on the Management of Power Grid Connection Operation" and "Measures for the Management of Power Auxiliary Services" issued by the National Energy Administration at the end of 2021, the Southern Region was the first to release a revised version of the "Two Rules" in this region, and it is expected that other regions will also gradually launch new versions of the "Two Rules" in this region.

Compared with the 2020 version of the "two detailed rules" for the southern region, this draft for comments has added multiple auxiliary service types such as stable machine shedding, load shedding, moment of inertia, and phase adjustment, all of which will be provided in the form of fixed compensation. The ramp service will not be started for the time being. The draft for comments specifically mentioned that the current frequency regulation and standby auxiliary services can basically cover the demand for ramp auxiliary services, so only the definition of the ramp auxiliary service and the compensation framework principle are added.

In terms of participants, power users are beginning to be included in the ranks of providing auxiliary services. Directly controlled adjustable loads that can be directly controlled by power dispatching agencies will be included in the management scope of the "two detailed rules". The capacity of directly controlled adjustable loads shall not be less than 30MW, the maximum adjustment capacity shall not be less than 10MW, and the duration shall not be less than 1 hour.

At the same time, the entry threshold for independent energy storage power stations has been raised. The 2020 version of the "two detailed rules" for the southern region only requires that the capacity of energy storage power stations reach 2MW/0.5h or more. With the increase in the scale of single energy storage power stations in the past two years, the requirements of this draft for comments have been raised to 10MW/1h or more.

For these two newer types of grid-connected entities, the draft for comments proposes to encourage them to form load aggregators or virtual power plants through aggregation, so as to give as many small-scale flexible resources in the region as possible opportunities to be used.

In terms of the cost of ancillary service compensation, market-based electricity users will share about half of the cost. Specifically, the cost of ramp compensation is borne by wind power and photovoltaic power generation, but this type has not yet started. The compensation cost of peak load (peak shaving) participated by direct-controlled adjustable loads is shared by market-based electricity users according to the actual electricity consumption of the month. The compensation costs of the other 12 types are shared by the grid-connected entities on the power generation side and market-based electricity users at a ratio of 50% each. In addition, independent energy storage power stations do not participate in the sharing of ancillary service compensation costs at this stage.

It should be pointed out that with the advancement of the construction of the ancillary service market, the current rules of the game in the ancillary service field are composed of the "two detailed rules" of each region and the market trading rules of relevant ancillary service varieties. The "two detailed rules" are mainly responsible for assessing and managing the operation of the grid-connected entities, and compensating the ancillary services provided by each grid-connected entity according to fixed standards, while the ancillary service market is responsible for forming service prices through competition. Generally speaking, market rules have a certain priority. If a certain ancillary service variety starts market trading, it will no longer be compensated and assessed repeatedly according to the "two detailed rules".

At present, Guangxi, Hainan and Guizhou have all built peak load ancillary service markets. The Southern Regional Frequency Regulation Ancillary Service Market was officially put into operation in July 2021, covering Guangdong, Guangxi, Yunnan and Hainan. Guizhou will also join in 2022. The standby ancillary service market is under preparation, and the "Southern Regional Electricity Standby Ancillary Service Market Trading Rules (Draft for Comments)" has recently been released to the public. The southern region will start with the construction of an inter-provincial standby market, and in the medium and long term, build standby markets within each province and promote the integration of provincial standby markets. In addition, Guizhou will also include black start in the scope of market competition.

Under the general direction of the reform of the power auxiliary service mechanism, it is expected that more auxiliary service varieties will be obtained through market competition in the future, and the participating entities will be more extensive and flexible. At the same time, the demand for auxiliary services in the new power system is growing. Judging from the release of the draft for comments on the "two detailed rules" in the southern region, the "two detailed rules" are also developing into a "test field" for various new types of auxiliary services.