IEEE Power & Energy Magazine - January/February 2021 - 49

As a result of participation in RGGI, generation in several states is subject to a carbon price. When implementing
a carbon price on a subregional basis, the carbon price can
have an impact on both emissions levels and energy prices
throughout the system through leakage, as described previously. In July 2019, the Carbon Pricing Senior Task Force
was formed as part of the PJM stakeholder process to investigate leakage-mitigation approaches. Both one- and twoway border adjustment approaches were explored to mitigate
leakage between the states that participate in RGGI and
those that do not. A one-way border adjustment approach
adjusts the price of transfers into a subregion subject to carbon pricing to account for the carbon price, while a two-way
border adjustment approach also adjusts the price of transfers out of a subregion subject to carbon pricing to remove
the impact of the carbon price.

The Evolving Challenge of Determining
Which Reliability Services Are Essential

for all other times. However, as the fleet moves toward more
VRE and enabling technologies, the task of ensuring resource
adequacy changes markedly due to the inherent uncertainty
and temporal nature of these technologies.
As more VRE is integrated, the quantity and type of
services procured to maintain reliability may change to
account for its variability and uncertainty. Regions have
implemented or proposed changes to 1) increase the reserve
requirement to account for needs beyond contingencies,
2) improve the locational scheduling of reserve so that
it can be delivered to where it is needed, 3) address shortage pricing to reflect the importance of different services,
and 4) utilize demand curves such that the market places
value on procuring more reserve than the minimum
requirement. In a growing number of market regions, new
products have been introduced (the flexibility/following reserve in Figure 6), highlighting the key difference
between the characteristics of services related to addressing variability and uncertainty from those that are needed
to address contingencies.
Another key area of evolution in reliability service markets is the mix of resources that participate. In regions with
large levels of VRE, operators have shifted to separating
products into up (increase supply, reduce demand) and down
(decrease supply, increase demand) services, creating opportunities for nonconventional resources to supply the service
while still ensuring reliability. To benefit the reliable operation of the system, reserve services must also be deliverable and not awarded to resources unable to respond due to
transmission congestion. Much of North America has been
making significant changes to allow for the participation
of electric storage, demand response resources, and even
resources located on the distribution system within all the

Customers measure the reliability of their electric service
simply by whether electricity is available when they need
it to be. Grid operators fulfill this need using several types
of services or products that procure attributes to support
the delivery of energy, thus supporting electric reliability.
North American markets have several common design features for these reliability services. Nearly all areas are either
currently or are planning to co-optimize ancillary services
with energy production, use a cascading hierarchy to assign
the highest quality services with the highest prices, and use
shortage pricing when there is an insufficient supply of services. The names and existence of different services vary
across different regions, and the emphasis on different types
of services is evolving (see Figure 6).
A few of the services in Figure 6,
secondary and tertiary contingency
reserve and regulating reserve, are
specific products in all the market
regions in North America. Others,
like flexibility reserve and primary
contingency reserve, are products
for a subset of regions. Still others,
like inertia, do not have specific
products in any region. The reasons
for the differences include how soon
the need for a certain product has
arisen, the existing requirements
for other products, and stakeholder
prioritization processes.
Resource adequacy refers to
having sufficient capacity installed
to meet long-term reliability targets.
With a traditional generating fleet,
if there is enough installed capac- figure 5. PJM Interconnection's footprint (shaded in green, checkered green, and blue)
ity to serve the peak demand, there with the states that currently participate in RGGI in green, the states that have taken
should also be sufficient capacity steps to join in checkered green, and the regions that do not participate in blue.
january/february 2021

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IEEE Power & Energy Magazine - January/February 2021

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