A Joint Compensation Method for Peak Regulation and Frequency Modulation in Auxiliary Service Market in Fujian

Peak regulation service market has been established since 2017 in Fujian, China. Market members get the opportunity to provide peak regulation services by bidding in the peak regulation market. The service benefit increases markedly and the market members have more enthusiasm for providing peak regulation services. According to the market rules, members cannot provide peak regulation services and frequency modulation services at the same time. The service compensation of frequency modulation units depends on the plan execution deviation of other related units. Therefore, there is a contradiction for market members in providing frequency modulation services for their preference to bidding in the peak regulation market. However, frequency modulation is of equal importance for the power system as peak regulation. This paper presents a new joint compensation method to accommodate the peak regulation market rule. And the method is verified with an example. The method also can be popularized to other provinces or areas to improve the generation units' enthusiasm in providing frequency modulation services.