Ancillary Services Market

Parking Lot Analogy - Energy vs. Capacity
Think of capacity like a parking lot. A business’s lot needs enough spaces to accommodate customers at its busiest time (like Black Friday). This means many of the spaces may stay empty on a typical day, but the extra spaces are there for customers during a peak business time.

Ancillary services help balance the transmission system as it moves electricity from generating sources to retail consumers. Throughout the day, PJM operates markets to procure two important ancillary services: regulation and reserves.

Balancing the system means matching supply and demand while maintaining a system frequency of 60 Hertz. Several factors can impact supply/demand balance and the system frequency, similar to the careful balancing of a scale. Regulation and reserves work together to maintain this balance, but have different roles:

  • Regulation is used to control small mismatches between load (the electricity being consumed) and generation (the electricity being produced), adjusting for small tips to either side of the scale.
  • Reserves help to recover system balance by making up for generation deficiencies if there is loss of a large generator, resulting in a large tip in the scale. 
Balanced Load & Generation

In addition to Synchronized Reserve and Regulation services, Black Start Service supplies electricity for system restoration in the unlikely event that the entire grid would lose power.