Procurement of Frequency Stabilization in Decarbonized Power Systems

Frequency stability of power systems is closely associated to inertia provided by synchronous machines in today's power systems. Yet the share of converter-based renewable power is steadily increasing. Unlike now, these units must contribute to immediate frequency stabilization in the future. The participation of renewable energy sources in fast reserve markets is already put into practice in some countries. However, the reserve response within the range of milliseconds through gridforming control is not yet implemented on system-level. Technical simulations are promising, yet economic aspects, particularly the market design have not been discussed thoroughly. In this contribution, we assess different procurement schemes for frequency stabilization based on grid forming control, notably (i) network connection codes, (ii) market-based (auction) schemes, and (iii) network operator assets. Our qualitative synopsis concludes that system operator owned network components lead to an inefficient provision and should only be used in transition periods. Network connection codes and market-based procurement schemes perform better from an economic perspective. Choosing between these options depends on the expected price of immediate frequency stabilization. In expectation of positive provision costs for this service, market auctions ensure a least-cost provision mix. However, if (close to) zero costs for frequency stabilization are expected, the costs for market organization can be avoided while only relying on network connection codes. The findings of this work are fundamental to design, simulate and implement market-based procurement schemes in the future.