Development of cost-functions for the remuneration of new ancillary services in distribution networks

The higher penetration of intermittent and volatile Distributed Renewable Energy Sources (DRES) in distribution grids is gradually replacing the bulk synchronous generators (SGs) of the transmission system, resulting in poor reaction after a grid event. Conventionally, in order to ensure the stable and safe operation of the electrical grid, the Transmission System Operators (TSOs) request the participation of SGs in Ancillary Services (AS) markets. On the other side, the DRES are mainly regarded as negative loads complying with certain grid codes requirements and no participation to such markets. However, new control algorithms are emerged, including the DRES operation with P-f droop curves, their reactive power contribution according to voltage variations, ramp-rate limitation and fault-ride-through (FRT) capability. Moreover, other support functions have also been proposed in the literature, e.g. provision of virtual inertia, power smoothing and harmonic mitigation. Such support functions, provided that they are properly quantified, can be traded in the AS markets already existing at transmission system level. This paper develops cost-functions for the procurement of the aforementioned AS in a parametric form after conducting a cost-benefit analysis per AS, considering several factors, such as the location, the size and the capability for providing the AS.