Interpreting the most complex auxiliary service details in history and their impact on new energy and energy storage

China Energy Storage Network News: Recently, the Southern Energy Regulatory Bureau publicly solicited opinions on the new version of the "Two Rules" (Southern Region "Electricity Grid Connection Operation Management Implementation Rules", "Electricity Auxiliary Service Management Implementation Rules") (Draft for Comments). The rules released this time are complex and have made many breakthroughs in the original version. Special rules for wind power, photovoltaics, new energy storage, and adjustable loads have been established. The participating entities and auxiliary service varieties have been greatly expanded, and new principles for auxiliary service compensation and sharing have been established. Overall, it is a beneficial attempt to adapt to the high proportion of new energy grid connection and build a safe and reliable new power system. However, the new version of the auxiliary service management rules is still dominated by the power grid company, and there is still room for improvement in terms of coordination with the market-based compensation mechanism and fair treatment of different market entities.

1. Major breakthroughs

The new version of the "Two Rules" (draft for comments) for the Southern Region is a refinement and implementation of the "Regulations on Power Grid Operation Management" and "Power Auxiliary Service Management Measures" issued by the National Energy Administration at the end of 2021. At the same time, differentiated grid connection management and auxiliary service implementation management rules were issued for wind power, photovoltaics, new energy storage and adjustable loads for the first time. The main breakthroughs are reflected in the following aspects:

1. Significantly expand the scope of grid-connected entities

The new version of the "Two Detailed Rules" not only includes the original grid-connected entities, but also includes wind power (greater than 10MW), photovoltaic power (greater than 10MW), new energy storage (10MW/1 hour or more) and directly controlled adjustable loads (not less than 30MW, maximum adjustment capacity not less than 10MW, adjustment time not less than 1 hour), and adds relevant provisions for pumped storage. The dispatching level is extended to thermal power, hydropower, wind power, photovoltaic power generation, solar thermal power generation, self-contained power plants, etc. of 10MW and above dispatched by prefecture-level dispatching agencies.

2. Fully implement the safety responsibilities of new energy and other new entities

Among the two detailed rules, the Implementation Rules for Grid Connection Operation Management mainly put forward rigid requirements for each grid connection entity in terms of safety and stability, as well as corresponding penalties when the requirements are not met, with the aim of protecting the bottom line of power system safety. The Implementation Rules for Power Auxiliary Service Management mainly establish compensation for auxiliary services and the allocation rules for corresponding funds in addition to the grid connection entity meeting the grid connection operation management rules, in order to stimulate the potential of each entity to participate in safety regulation.

This time, for new grid-connected entities such as wind power, photovoltaic power, new energy storage and adjustable loads above a certain scale, special grid-connected management and auxiliary service implementation details were released for the first time. The grid-connected management basically refers to the framework of conventional power sources, and establishes a management and assessment system in terms of safe operation and equipment performance. On the one hand, it puts forward higher requirements for new entities; on the other hand, it plays a great role in standardizing the operation of new entities and improving the safety and stability of the power system. Especially for new energy entities such as wind power and photovoltaic power, the management and assessment requirements for the execution of dispatch plan curves, active power changes, and power forecasts are proposed, which is of great significance to improving the power system's ability to balance power generation and consumption.

3. Moderately advance and optimize auxiliary service varieties

First, redefine basic auxiliary services (free of charge) and paid auxiliary services, and compensate 70% of the integral electricity of the first frequency regulation action to improve the effectiveness of the first line of defense (primary frequency regulation), improve frequency safety, reduce the pressure of secondary frequency regulation, and reduce the overall cost of frequency regulation. Second, in order to deal with the problem of insufficient output caused by the rapid fluctuation of new energy power, increase the variety of climbing auxiliary services (currently not started, and the dispatching agency will report to the energy regulatory agency for approval based on actual needs and start in relevant provinces (regions)). Third, during periods of high new energy penetration, inertia compensation will be given to synchronous units such as hydropower and thermal power that can operate at low load rates to ensure the overall inertia level of the system. Fourth, in response to the problem of voltage regulation difficulties caused by the increase in the proportion of power electronic devices, a compensation mechanism for phase adjustment auxiliary services will be formulated in advance.

4. Establish a reasonable apportionment mechanism

Where reasonable division is possible, compensation and sharing shall be carried out as far as possible according to the principle of "who provides, who profits, who benefits, who bears". The ramp compensation costs mainly caused by the rapid reduction of new energy output shall be shared by new energy power generation enterprises in accordance with the proportion of forecast deviation; the peak load (peak shaving) compensation costs participated by direct-controlled adjustable loads shall be shared by market-based power users according to the actual electricity consumption of the month, which increases the game of user-side regulation capacity; and other types of compensation costs shall be shared by the grid-connected entities on the power generation side and market-based power users in a ratio of 50% each (the power auxiliary service costs shall be separately listed in the electricity bill of the market-based power users in the current month).

5. Partial consideration of the connection between peak load ancillary services and the electricity market

Consider the integration of the peak-shaving market and the spot market. It is clarified that in provinces (regions) that have started spot settlement operations, if the load rate of the grid-connected entities on the power generation side entering the spot market is above the lower limit of the normal regulation output agreed in the grid-connected dispatching agreement, the deep peak-shaving compensation provisions will no longer be implemented (that is, no need to bear the peak-shaving cost sharing); if the load rate is below the lower limit of the normal regulation output agreed in the grid-connected dispatching agreement, the deep peak-shaving compensation provisions will still be implemented (that is, the peak-shaving cost compensation can be obtained). If the spot trading rules stipulate otherwise, they shall prevail.

2. Main Problems

Although the new version of the "Two Detailed Rules" in the southern region has made breakthroughs in the above points, due to the unique complexity of the auxiliary services, the auxiliary service mechanism for all varieties is still in the exploratory stage. The author believes that there is still room for improvement in the following aspects:

1. Ancillary services are still mainly compensated by fixed amounts, lacking a market-based compensation mechanism

The most eye-catching part of the "Electricity Auxiliary Service Management Measures" issued by the Energy Bureau is that it proposes the market-oriented development direction of auxiliary services, encourages the principle of forming prices through market-based competition, and clarifies the types of market-based auxiliary services through the formulation of electricity auxiliary service market trading rules. The new version of the auxiliary service details covers a very complete range of frequency regulation, peak regulation, standby, inertia, climbing and other varieties, but basically adopts a fixed compensation mechanism, and the compensation coefficient and sharing ratio of auxiliary services are all set artificially. This limits the space for market-based auxiliary service varieties. It can be foreseen that the auxiliary service architecture will still be dominated by fixed compensation for a long period of time, and the market-based mechanism will still be difficult to play a role. The inability to determine the service provider and discover the optimal marginal price through a market-based bidding mechanism is not conducive to the optimal allocation of auxiliary service resources, and cannot effectively reflect the scarcity of various varieties. Specifically including:

The division of compensation coefficients for each type is rather "arbitrary". For example, in order to stimulate the enthusiasm of the subject to participate in the primary frequency regulation when a large frequency difference disturbance occurs, the compensation coefficient is set to 20 times that of the small frequency difference; the peak-shaving auxiliary service is divided into segments according to the peak-shaving depth boundary, and the 30%-40% segment (second gear) of the coal-fired unit is 8 times the 40%-50% segment (first gear); the setting of the inertia compensation formula and coefficient. There is no practical basis and it is difficult to verify its rationality. In terms of sharing coefficients, except for the compensation costs of climbing and direct-controlled loads, which are shared by specific categories of subjects, other types are shared by power generation enterprises, market-oriented power users and other grid-connected entities according to the proportion of electricity, which makes it difficult to truly implement the principle of "who benefits, who bears".