Designing ancillary services markets for power system security

A framework for ensuring power system security in competitive electricity markets is developed, based on a market for ancillary services. The ancillary services market is designed to integrate with a spot market for electricity, and market operation is based on a set of transparent and repeatable market rules. These rules provide the analytical basis for the algorithm that determines which ancillary service offers should be accepted to optimize system security for least overall cost. The approach is demonstrated for voltage control of a nine bus test system.