EBF 483
Introduction to Electricity Markets

9.1.3 Reserves and Black Start

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Reserves and black start are quite different, but both are very simple to describe so we'll do both in this subsection.

Reserves represent capacity that power grid operators keep as a backup in case of a loss of another power plant or if demand increases rapidly beyond what is expected. The use of reserves may be triggered if, for example, frequency regulation alone is not enough to bring system frequency back to 60 Hertz and a power grid operator has to trigger tertiary frequency control.

There are two flavors of reserves: spinning and non-spinning reserves. Spinning reserves represents capacity that is synchronous with the grid (spinning at 60 Hertz) but is not producing any electricity. Spinning reserves are expected to be able to produce power within a specified time of being called on (examples would be 10 minute, 30 minute and 60 minute spinning reserve). Non-spinning reserves represent capacity that has not started up but could start up and be ready to produce power within a specified time of being called on.

Like regulation, reserves are often procured through an auction in areas that have undergone electricity restructuring. Unlike regulation, reserves are only a service to increase power output (there is no "reserves down" like there is regulation down). Generators providing reserves are paid a capability price for those reserves and then paid the real time energy price if called upon.

As an example, let's take our 100 MW generator again that is dispatched to produce 50 MWh in the energy market at a price of $10/MWh. This generator offers 5 MW of reserves and the capability price is $25/MW. At the beginning some hour the generator is asked to produce 2 MW of power during the second half of the hour (so this would be like 30 minute reserves). The generator's total revenues for this hour would be:

  • Energy market revenue: 50 MWh * $10/MWh = $500
  • Reserve capability: 5 MW * $25/MW = $125
  • Reserve performance: 2 MW * (1/2 Hour) * $10/MWh = $10
  • Total revenue: $635

Black start is the capability of a power plant to start itself independent of the power grid. Some power plants have on-site generators that can be used to start the main turbine generator spinning. Others actually take electricity from the power grid for this purpose. Power plants that provide black start capability agree to keep an on-site generator or other grid-independent power source ready to operate. In the case of a large blackout, these power plants will start themselves up using their on-site generation, and feed power into the grid so that other plants can start up and restore electricity service.