Ancillary Services: an introduction


By Carolin Schenuit, Deutsche Energie-Agentur GmbH

Grid operators take continuously measures to guarantee a high quality, reliability and security of electricity transmission and distribution. The measures serve to keep the frequency, voltage and load of the operating equipment within the permitted tolerances or to return them to the normal range after faults. These services, which are essential to keep the supply of electricity functional, are called ancillary services. They are nowadays mostly provided by conventional power plants. System operators use and activate them according to the grid status and situation. There are four different types of ancillary services:

Frequency control is implemented by transmission system operators by maintaining a balance between electricity generation and consumptions. The services used to ensure frequency control are instantaneous reserve and balancing energy.

Voltage control refers to the responsibility of the transmission and distribution system operators to maintain the grid voltage in a permissible range. Examples for measures to control the voltage are the provision of reactive power, voltage-related redispatch, voltage-related load shedding, provision of short circuit power and voltage regulation.

System restoration is used in the event of a major power outage. The transmission system operators, with the cooperation of the distribution system operators, must be in a position to restore the supply of electricity within a very short time.

System control refers to the coordination and system operations of the grid. System operators continuously monitor and control the electricity grid including generation and load for threshold violation in order to guarantee secure operation of the entire power supply system.[1]

The following table provides a detailed overview of the specific ancillary services.

[1] dena (2014)

Ancillary Services in Germany

The German Government has committed to the objective of expanding the percentage of the gross electricity consumption supplied from renewable energy sources to at least 80 percent by 2050. This objective is part of a far-reaching strategy to establish a secure, economical and sustainable energy supply, which takes into account the requirements of climate protection and the targeted reduction of Germany’s dependence on fuel imports between now and 2050. These objectives initiated a major change of the power supply structure in Germany.

Ancillary service Frequency control Voltage control System restoration System control
Objective Maintenance of frequency in the permitted range Maintenance of the voltage in the permitted rangeRestriction of the voltage drop in the event of a short circuit System restoration after faults Coordination of the grid and system operations
Products/Measures Instantaneous reserveBalancing energy

Flexible loads

Frequency dependent load shedding

Active power reduction on excessive/insufficient frequency

Provision of reactive powerVoltage related redispatch

Voltage related load shedding

Provision of short circuit power

Voltage regulation

Switching measures to restrict the faultCoordinated commissioning of feeders and sub-grids with loads

Black start capability of generators

Grid analysis, monitoringCongestion management

Feed in Management of Renewable Energy

Coordination of ancillary services across grid levels

Current providers (selection) Conventional power plantsFlexible controllable loads

Balancing energy pools (including RE systems and large scale batteries)

Conventional power plantsOperational equipment (e.g. reactive power compensator)

RE systems

Network control unitBlack start capable conventional power plants

Pumped storage power plants

Network control units in conjunction with operating equipment and conventional power plants

Renewable energy systems are mostly connected to the distribution grid. Therefore the number of situations increase in which the energy is fed back from the distribution grid to the transmission grid to be transported over long distances. There is a significant need for expansion and innovation in the transmission and distribution grids in Germany to prevent overloading and exceeding of permitted voltage limits.

Due to the implementation of the political strategy, thermal power plants, which today still largely provide the ancillary services, will see fewer utilization hours in the future.  Against this background, German stakeholders are currently reviewing and researching possible changes in the power supply system in order to develop solutions how secure electricity system operation can be organized under the new conditions. As a consequence, new solutions to provide ancillary services are required.[1] In 2013, dena has conducted the study “ancillary services 2030” which led to a multi-stakeholder platform that is focusing on highlighting open questions and potential solutions for the development of ancillary services in an energy system with high shares of renewable energies. The platform enables exchange between companies, grid operators, political stakeholders and technical experts. A comprehensive roadmap was developed showing how ancillary services can be provided in the future. The roadmap shows which fields of action need to be addressed until 2030.

A very successful example of restructuring ancillary services is the balancing power market. The balancing market is conjointly organized by the four German TSOs and exists since 2009. The TSOs define according to a set of rules, how much capacity they need to procure per balancing power product (primary, secondary and tertiary reserve) and manage a tendering process for this amount of power every week and daily for tertiary reserve. Alongside thermal power plants, renewable energy plants like biogas plants and wind parks and also industrial loads can participate in the market. Ever since its introduction until 2015, the market size in GW (as reflection of the needed amount of balancing power) has fallen by 20 % from 6 GW and the procurement cost have fallen by 70% from 860 mio €. In the same period, overall system stability has increased and the installed capacity of variable renewable energies has increased by more than 200%.  As a conclusion, the overall efficiency of the approach has been very successfully proven. The market-based approach provides a framework in order to adjust balancing energy to the new the requirements of the electricity system. Experiences in Germany show that it is technically feasible to provide balancing energy with alternative energy units.  Further measures are required and under consideration to facilitate the market entry, especially for renewable energy providers.

For other ancillary services, the development is less far advanced. Alternative technical solutions for reactive power must be developed in a cost efficient way. In the field of frequency control, solutions for instantaneous reserve provided by decentralized renewable power plants need to be found. A precise control management system for decentralized energy units is obligatory to ensure that re-establishment of the power system will work in case of need. The requirements with regard to system control are increasing with the growing share of renewable energy production. The product range of ancillary services is very broad and different services require individual solutions to adapt to the new energy landscape and the increasing share of renewable energy. Suitable processes and tools must be developed in order to meet the new requirements.[2]


Ancillary services in China

At the end of 2016, the Chinese central government has reinforced its commitment to tackle climate change and to develop the use of clean energy in several chapters of the 13th Five Year Plan. With the Power Market Reform, the Chinese government aims to liberalize and open the electricity market for new market players. In addition, there are plans to reach a unified national electricity market in the coming years.

Since 2002, the Chinese government started restructuring measures in order to disentangle large, monopolistic energy enterprises from the public sector and introduce market mechanisms in the energy industry. In 2002, the State Power Corporation was reorganized and independent electricity producers were set up. That ended the government’s vertical control framework in which electricity production, transmission, distribution and selling were tied together. So the electricity production and electricity grid operation were divided into separate business entities. Due to the structure of the grid operation business (as a natural monopoly), this segment experienced less development and is still mostly handled by two major grid operators, State Grid (SGCC) and Southern China Grid.  Consequently, the structural reform of the energy industry is still incomplete and electricity prices are not yet defined in a market-based environment.

With regard to ancillary services, forecasting, scheduling and dispatching are organized among different dispatch organizations (DO) of the grid operators. The annual electricity production is allocated by generation quotas and annual utilization hours are set by provincial governments.  The table below provides an overview of this hierarchy, showing the division of responsibilities for three key functions: supply-demand balancing (balancing), generator dispatch (dispatch), and load management.[3]

[1] dena (2014)


[2] Deutsche Energie-Agentur (dena) (2014)


[3] Danish Energy Agency (2015)

Level Host Jurisdiction Key Function
National (NDO) SGCC Voltage level: >500 kVGeographic: Regional intertiesGenerators: Large thermal or hydropower shipping across regions Interregional balancing, Interregional dispatch
Regional (RDO) Regional gridcompanies Voltage level: 330 – 550 kVGeographic: Provincial intertiesGenerators: Pumped hydro storage, regulation Interprovincial balancing, interprovincial dispatch
Provincial (PDO) Provincial gridcompanies Voltage level: 220 kV (330 – 500 kV terminal substations)Geographic: Bulk provincial systemGenerators: Larger generators not controlled by RDO or NDO Intra-provincial balancing, intra-provincial dispatch, coordinating load management
Prefecture (MDO) Prefecture powersupply organization Voltage level <= 220 kVGeographic: Local systemGenerators: Smaller local generators Prefecture load management
Country (CDO) County power supply organizations Voltage level: <= 110 kVGeographic: County systemGenerators: Any remaining generators County load management

In general, scheduling and balancing responsibilities are separated according to geography and voltage levels. So grid management and accordingly ancillary services in China are mainly organized within the provinces, since each province has a separate power market.  Only when the grid stability within the province is at risk and cannot be handled intraprovincially any more, support is required from regional or national DOs. The cooperation across several provinces in order to balance generation and consumption is not yet possible within the current set-up.

Transforming Ancillary Services

When pursuing an overall Power Sector Reform, the possible alternatives for the provision of ancillary services should also be considered in China. On the path to higher amounts of variable renewable energy in the electricity mix, at some point the question becomes unavoidable how and by whom ancillary services can be delivered reliably and securely. Since the market share of thermal power plants is decreasing, alternative provision possibilities need to be considered, both technologically as well as organizationally.

Alongside the evolution of trading principles and traded products at the electricity wholesale market, the creation and development of the balancing energy market was a very successful measure in Germany. European integration and harmonization of the electricity and the balancing power market is an ongoing project. According to the current discussion within the dena-platform Ancillary Services, it will likely not be reasonable or efficient to organize all sorts of ancillary services market-based in the future. The topic is complex and will need further research and development of technologies and market structures.

In any case, the introduction of market principles in the wholesale power market is a precondition to a potential re-organisation of ancillary services provision with a market-based approach.





Danish Energy Agency (2015): „Power markets and power sector planning in Europe – Lessons learnt from China“.

dena (2014a): „dena Ancillary Services Study 2030“.

dena (2014b): „Roadmap dena – Studie Systemdienstleistungen 2030“.


For further information please contact:

Deutsche Energie-Agentur GmbH (dena)
German Energy Agency
Carolin Schenuit
Chausseestrasse 128 a
10115 Berlin, Germany

Tel.:            +49 (0)30 72 61 65-821
Fax:            +49 (0)30 72 61 65-699