IEEE Power & Energy Magazine - January/February 2021 - 50

different reliability services in a cost-effective and highperforming manner.
Characteristics such as the ability to maintain nominal
voltages, respond to frequency excursions, and ensure stability are all necessary for grid reliability. Historically, generators have inherently provided these services, but as more
inverter-based resources are integrated, these attributes are
becoming more important. Different technologies may provide the attributes in different ways, making it essential when
designing markets to incentivize the attribute provided to the
grid and not how the specific technology provides it today.
As an example, sufficient synchronous inertia is required to
maintain stability, and inertia markets are under discussion
as a future possibility. Although not the exact same thing,
future systems with extremely fast controls coming from
inverter-based resources can replicate some of the support
that inertia provides. Research has even been conducted on
ways that grid-forming inverter technology can work without any synchronous inertia. As the resource mix continues
to evolve, it will be important to understand the types and
amounts of these attributes and the corresponding products necessary to support the reliable operation of the grid,
regardless of technology.

What Will the Future Market or
Regulatory Structure Look Like?
Market structures differ not only across the globe but also
within North America. For example, of the nine organized

Those Services That Are Necessary to
Support the Transmission of Capacity and
Energy From Resources to Loads While
Maintaining Reliable Operation of
the Transmission Service Provider's
Transmission System in Accordance With
Good Utility Practice (FERC/NERC)

Event

Contingency
Reserve

electricity markets, four have centralized capacity markets
(one voluntary), one is transitioning to a centralized capacity
market, two have bilateral resource adequacy requirements,
and two others have no resource adequacy requirement. It
is impossible to predict what the future structure will look
like, and it is possible that different regions will differ in
regulatory practices, carbon/renewable goals, and stakeholder and consumer opinions, among other features. That
said, researchers and practitioners have started looking at a
few structures and market designs that can meet some of the
principles discussed previously.
There are generally three schools of thought regarding
the future electricity market structure. First, existing market
designs will function just as well as they do today, or with
minor incremental changes. Second, substantial changes
are required for markets to function properly, given the
future resource mix. Third, markets should be eliminated
or minimized in favor of a return to central planning, vertical integration, and cost-of-service pricing. There are several
variations of the actual market design across each option,
and readers are encouraged to review the reports referenced
in the " For Further Reading " section. Some of the options
that have been proposed in previous studies are briefly
discussed, some by the authors, without claiming any one
option is superior to another.
The market design philosophy that underpins North
American wholesale energy markets-marginal cost pricing using bid-based, security-constrained economic dispatch

Instantaneous Events (Contingencies)
Inertia**

Fast Frequency Reduce Nadir, Avoid UFLS
Response
Primary
Secondary
Tertiary

Planning
Reserve

Reduce ROCOF, Maintain Stability

Stabilize Frequency
Return Frequency to Nominal
and/or ACE to Zero
Bring Back to n -1 Secure State

ICAP

Flexible
Capacity

Volt/Reactive
Control/Reserve

Longer-Duration Events
Ramping
Reserve

Operating
Reserve

Flexibility/
Following
Reserve

Nonevent

Regulating
Reserve

Secondary
Tertiary

Return Frequency to Nominal
and/or the Imbalance to Zero

Static

Dynamic

Bring Back to Secure State

Correct the Anticipated Imbalance

Black-Start
Restoration
Short Circuit
Contribution

Correct the Current Imbalance

figure 6. An example set and categorization of reliability services. NERC: North American Electric Reliability Corporation; ROCOF: rate of change of frequency; ULFS: under-frequency load shielding; ICAP: installed capacity. (Source:
Electric Power Research Institute; used with permission.)
50	

ieee power & energy magazine	

january/february 2021
IEEE Power & Energy Magazine - January/February 2021

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - January/February 2021
