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Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Contract No. DE-AC36-08GO28308

Operating Reserves and 

Variable Generation

A comprehensive review of current strategies, 

studies, and fundamental research on the impact 

that increased penetration of variable renewable

generation has on power system operating 

reserves.

Erik Ela, Michael Milligan, and Brendan Kirby

Technical Report

NREL/TP-5500-51978 

August 2011
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Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

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Contract No. DE-AC36-08GO28308

Operating Reserves and 

Variable Generation

A comprehensive review of current strategies, 

studies, and fundamental research on the impact 

that increased penetration of variable renewable 

generation has on power system operating 

reserves.

Erik Ela, Michael Milligan, and Brendan Kirby

Prepared under Task No. WE110920

Cover photo is NREL PIX 19498.

Technical Report

NREL/TP-5500-51978 

August 2011
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iii

Table of Contents

List of Figures............................................................................................................................................... v

List of Tables ............................................................................................................................................... vi

Abstract.......................................................................................................................................................vii

Abbreviations and Definitions...................................................................................................................viii

Acknowledgements....................................................................................................................................... x

1 Introduction........................................................................................................................................... 1

2 Power System and Operating Reserves Overview................................................................................ 4

2.1 Regulating Reserves.................................................................................................................... 12

2.2 Following Reserves..................................................................................................................... 18

2.3 Contingency Reserves................................................................................................................. 20

2.4 Ramping Reserves ...................................................................................................................... 22

2.5 Primary Reserves (Under Contingency Reserves)...................................................................... 24

2.6 Secondary Reserves (Under Contingency Reserves and Ramping Reserves) ............................ 28

2.7 Tertiary Reserves (Under Contingency Reserves and Ramping Reserves)................................ 28

3 Operating Reserves in Practice ........................................................................................................... 29

3.1 North America (NERC) .............................................................................................................. 29

3.1.1 Regulating Reserves............................................................................................................ 32

3.1.2 Following Reserves............................................................................................................. 36

3.1.3 Contingency Reserves......................................................................................................... 36

3.1.4 Ramping Reserves............................................................................................................... 38

3.1.5 Primary Reserves ................................................................................................................ 38

3.1.6 Secondary Reserves ............................................................................................................ 38

3.1.7 Tertiary Reserves ................................................................................................................ 39

3.2 Key North American Regional Differences................................................................................ 40

3.2.1 Regulating Reserves............................................................................................................ 40

3.2.2 Following Reserve .............................................................................................................. 45

3.2.3 Contingency Reserve .......................................................................................................... 45

3.2.4 Ramping Reserve ................................................................................................................ 46

3.2.5 Primary Reserve.................................................................................................................. 46

3.2.6 Secondary Reserves ............................................................................................................ 49

3.2.7 Tertiary Reserves ................................................................................................................ 49

3.3 Europe: ENTSO-E (UCTE) ........................................................................................................ 50
iv

3.3.1 Regulating Reserves............................................................................................................ 50

3.3.2 Following Reserves............................................................................................................. 52

3.3.3 Contingency Reserves......................................................................................................... 52

3.3.4 Ramping Reserves............................................................................................................... 54

3.3.5 Primary Reserves ................................................................................................................ 54

3.3.6 Secondary Reserves ............................................................................................................ 55

3.3.7 Tertiary Reserves ................................................................................................................ 56

3.4 Summary ..................................................................................................................................... 57

4 New Proposed Methodologies and Renewable Integration Studies.................................................... 60

4.1 Large-Scale Renewable Integration Studies ............................................................................... 60

4.2 Academic Research..................................................................................................................... 78

4.3 Summary ..................................................................................................................................... 85

5 Conclusions and Discussion................................................................................................................ 87

6 References........................................................................................................................................... 89
v

List of Figures

Figure 1: Example of Variability and Uncertainty........................................................................................ 2

Figure 2: Power system operation time frames............................................................................................. 4

Figure 3: Reserve deployment. ..................................................................................................................... 5

Figure 4: Wind ramp event, ERCOT February 26, 2008.............................................................................. 6

Figure 5: Example of operating reserve categories and how they are related............................................... 8

Figure 6: Wind power step change magnitude and standard deviation for different sets of wind turbines.14

Figure 7: Example of wind’s uncertainty and variability impacts on regulating reserve............................ 15

Figure 8: Actual Regulating Reserve needs due to variability and uncertainty.......................................... 16

Figure 9: Typical thermal generation fleet performance following regulating reserve signals. ................. 17

Figure 10: Insufficient ramping capability may result in the need for peaking response inflating the energy 

price. ........................................................................................................................................................... 18

Figure 11: Typical load ramp and hourly average schedule to follow load................................................ 19

Figure 12: Load following needs for a more variable net load................................................................... 20

Figure 13: Example contingency (loss of supply) event and typical responses.......................................... 21

Figure 14: Net load forecast that does not forecast wind ramp................................................................... 23

Figure 15: Frequency response to disturbance............................................................................................ 25

Figure 16: Droop curve with 5% droop. ..................................................................................................... 26

Figure 17: Governor droop curve with dead band. ..................................................................................... 27

Figure 18: NERC Interconnections and Reliability Regions. ..................................................................... 30

Figure 19: While there is a balancing area consolidation trend, there are also numerous small balancing 

areas. ........................................................................................................................................................... 31

Figure 20: ISO and RTO regions in North America................................................................................... 32

Figure 21: New frequency dependent BAAL requirement. ........................................................................ 36

Figure 22: Example of DCS when pre-disturbance ACE is positive. ......................................................... 37

Figure 23: Example of DCS when pre-disturbance ACE is negative. ........................................................ 37

Figure 24: Example of limited energy storage resource providing regulating reserve during normal (left) 

and during low storage (right) conditions................................................................................................... 42

Figure 25: 5-minute scheduling vs. hourly scheduling. .............................................................................. 43

Figure 26: Regulating reserve needs for 5-minute scheduling vs. hourly scheduling. ............................... 44

Figure 27: Countries and Interconnections under the ENTSO-E................................................................ 50

Figure 28: Role of different types of Contingency Reserve in the UCTE region....................................... 52

Figure 29: Time line for primary, secondary, and tertiary control reserve following contingency event... 54

Figure 30: UCTE and NERC terminology.................................................................................................. 57

Figure 31: Approximate regulating requirements for a Balancing Authority as a function of peak demand.

.................................................................................................................................................................... 62

Figure 32: Load following and regulation based on CAISO scheduling process. ...................................... 64

Figure 33: Increases in multi-hour ramps due to the added wind generation. ............................................ 65

Figure 34: Summary of changes in hourly maximum regulation deployments of 15,000-MW wind 

capacity. ...................................................................................................................................................... 66

Figure 35: Weekly demand for spinning reserve for each generation portfolio. ........................................ 68

Figure 36: Average requirement for replacement reserve by time horizon. ............................................... 69

Figure 37: Hourly requirement for replacement reserve............................................................................. 69

Figure 38: 10-min ahead wind generation forecast errors as function of wind production. ....................... 71
vi

Figure 39: Summary of reserve methodologies for EWITS. ...................................................................... 71

Figure 40: Total regulation requirements for seasonal peak loads (MW)................................................... 73

Figure 41: WWSIS WestConnect Study Footprint. .................................................................................... 73

Figure 42: Standard deviation of 10-minute delta for different wind and load levels. ............................... 74

Figure 43: Reserve requirements using 3% or using 3 sigma rule for each area. ....................................... 75

Figure 44: 1% peak load regulation rule and average 1 sigma regulation rule for all regions................... 76

Figure 45: 3+5 rule for operating reserve requirements for different wind and load levels. ...................... 77

Figure 46: Reserve requirement of different reserve types based on their forecast horizon....................... 81

List of Tables

Table I: Operating reserves as defined throughout the rest of this report and their usage............................ 9

Table II: Balancing Authority frequency bias settings ............................................................................... 34

Table III: Regulating reserve requirement definition from various North American balancing authorities...... 40

Table IV: Combined vs. separate regulating reserve.................................................................................. 41

Table V: Additional up-regulation per 1000 MW of incremental wind generation capacity in ERCOT.......... 41

Table VI: Hydro Quebec parameters for wind power plants providing emulated inertial response........... 48

Table VII: NERC and UCTE policy differences........................................................................................ 58

Table VIII: WWSIS reserve rules for 30% local priority scenario............................................................. 77

Table IX: Comparison of different stochastic methods .............................................................................. 83
vii

Abstract

With the advent of new technologies being introduced to the electric power system, the way in which the 

system is planned and operated may need significant changes. For instance, variable renewable 

generation, like wind power and solar power technologies, have some very different characteristics than 

traditional sources of generation technology that has historically met the electricity demand. The 

variability and uncertainty that is inherent in variable generation technologies adds to the variability and 

uncertainty in the existing system and can have significant effects on operations. Variability is the 

expected change in generation and demand balance (e.g., load changing throughout the day and wind 

power resource change). Uncertainty is the unexpected change in generation and demand balance from 

what was anticipated (e.g., a contingency or a load or variable generation forecast error). Power system 

schedulers often use scheduling techniques throughout the day to match generation and demand. When, 

because of variability and/or uncertainty, the total supply of energy is different than the total demand, 

system operators must deploy operating reserves to correct the energy imbalance. The way in which they 

do this and, especially, the way in which they plan for this can dramatically impact the reliability and 

efficiency of operating a power system with large amounts of variable generation. Systems today have 

developed their rules and practices based on a long-standing history of operations. Many systems are 

even now learning new ways to change these rules and practices where high penetrations of variable 

generation are becoming apparent. Renewable integration studies that are assessing the impacts of future 

high penetration systems are finding that systems must find alternative approaches for allocating and 

deploying operating reserves. This report tries to first generalize the requirements of the power system as 

it relates to the needs of operating reserves. A categorization of the various types of operating reserve is 

introduced to give a better understanding to the reader and to link similar reserve definitions in regions 

that have different naming conventions. It also includes a survey of operating reserves and how they are 

managed internationally in system operations today and then how new studies and research are 

proposing they may be managed in the future with higher penetrations of variable generation. The 

objective is to understand the differences, the commonalities, and to inspire thought on how new methods 

or metrics would be better suited in this future power system with larger amounts of variable generation.
viii

Abbreviations and Definitions

Operating Reserves Any capacity available for assistance in active 

power balance.

Operating Reserve Terms in Capital Letters General operating reserve terms as defined by this 

paper as in section 2.

Operating reserve terms in italics Operating reserve terms as defined specifically by 

a region or a study

ACE Area Control Error

AGC Automatic Generation Control

B/K Bias (B:North America, K:Europe)

BA Balancing Area or Balancing Authority

BAAL Balancing Area ACE Limit

CAISO California Independent System Operator

CPM Control Performance Measure

CPS(1&2) Control Performance Standard

DCS Disturbance Control Standard

EENS Expected Energy Not Served

ENTSO-E European Network of Transmission System 

Operators for Electricity

ERCOT Electric Reliability Council of Texas

EWITS Eastern Wind Integration and Transmission Study

FAL Frequency Abnormal Limit

FERC Federal Energy Regulatory Commission

FRC Frequency Response Characteristic

FRL Frequency Relay Limit

FRR Frequency Responsive Reserve

FTL Frequency Trigger Limit

GW Gigawatt

Hz Hertz

ISO Independent System Operator

ISO-NE Independent System Operator – New England

LAaR Loads Acting as a Resource

LESR Limited Energy Storage Resource

LOLP Loss of Load Probability

MISO Midwest Independent System Operator

MW Megawatt

NERC North American Electric Corporation

NPCC Northeast Power Coordinating Council

NYISO New York Independent System Operator

NYSRC New York State Reliability Council

QLPU Quick Load Pick-Up

RSG Reserve Sharing Group

RTO Regional Transmission Organization

SPP Southwest Power Pool

TSO Transmission System Operator
ix

UCTE Union for Coordination of Transmission of Electricity

UFLS Under Frequency Load Shedding

VG Variable Generation

VOLL Value of Lost Load

WECC Western Electricity Coordinating Council

WITF Wind Integration Task Force

WWSIS Western Wind and Solar Integration Study
x

Acknowledgements

The authors would first like to thank Charlton Clark and his colleagues at the Department of Energy’s 

Office of Wind and Hydropower Technologies for their financial support for this project. The authors 

would like to thank the NERC Integration of Variable Generation Task Force (IVGTF) and the WECC 

Variable Generation Subcommittee (VGS) for providing industry review of this paper. The team would 

also like to thank Charlie Smith of UWIG, Mark O’Malley, Damian Flynn and Michael Power of 

University College Dublin, and Matt Hunsaker of WECC for their review. The team would like to thank 

Hannele Holttinen of the VTT Technical Research Centre of Finland and the IEA Task 25 team for 

providing thoughtful and interesting discussion directly related to this topic area. Finally, the team would 

like to thank Bruce Green of NREL for his editorial assistance.
1 

1 Introduction 

Power system operators have a number of responsibilities that focus on maintaining reliability [1][2][3]. 

System generation must be as close as possible to the system load and electrical losses to ensure that 

system frequency is maintained at or very close to nominal levels (60 Hz in North America, 50 Hz in 

Europe and many other areas throughout the world). In areas that are a part of a larger synchronous 

interconnection it must be ensured that tie-line flows between areas are kept at their scheduled flows. This 

is achieved through numerous procedures on different time scales using both economic response and 

deployment of reliability reserves with both centralized control and autonomous response. Power flows 

must be kept below the maximum limits on equipment such as transmission lines and transformers 

through the dispatch of generating units and through direct flow control with phase shifting transformers 

and flexible AC transmission system (FACTS) devices. Voltage levels throughout the power system must 

also be kept within nominal levels at all locations on a network. This is achieved through reactive power 

management of generators as well as by controlling transmission system devices including voltage 

regulators, transformer taps, capacitors, reactors, static VAR compensators, statcoms, and synchronous 

condensers. Systems must also be able to withstand contingency events with preventive control actions 

holding reserves and limiting pre-contingency flows so that the system will survive the event and normal 

operations can be fully restored shortly following these events. 

If system conditions could be easily predicted and were constant over all time frames, meeting these 

objectives would be relatively straightforward. However, many of the properties of the power system, 

including its generation output, load levels, and transmission equipment availability are both variable and 

unpredictable. Therefore, additional capacity (generation and responsive load availability) above that 

needed to meet actual load demands are made available either on-line or on-standby so that it can be 

called on to assist if load increases or generation decreases, due to unpredictability or variability of the 

conditions. Likewise, on-line generating capacity that can reduce supply or turn off is required if load 

decreases or generation increases.1

 This capacity, herein referred to as operating reserves, is utilized for 

many different reasons and comes in different shapes and sizes. It can be generalized for the purposes of 

this study as capacity used to maintain the active power (also referred to as real power, but active power 

will be used throughout the rest of this report) balance of the system.2

 Note that extra generation that is 

available to increase output (or load that is available to curtail) has historically been more of a reliability 

need since large generators and transmission lines can and do suddenly fail. It has been far less common 

for large loads to suddenly disconnect, so downward reserves have historically been less needed for 

power system reliability. Power systems with large amounts of variable generation/VG (both wind and 

solar), which can increase or decrease output unexpectedly, may raise the importance of both upward and 

downward reserves. 

As discussed, the variability and uncertainty on systems is what causes the need for Operating Reserves. 

Variability is the expected changes in power system variables. Operating Reserves might be needed if this 

 1

 Responsive load and storage able to increase load upon command could also provide this reserve. 2

 The available capacity could be available as active power capacity or reactive power capacity, however, in this study we generally refer to 

active power reserve. Reactive power imbalance causes voltage differences but it is much more location specific, and requirements or utilizations 

are not as easily quantified for aggregated systems. 
2 

variability occurs at time resolutions that scheduling resolutions are not prepared for. For example, an 

hourly schedule might hold Operating Reserves for variability that occurs at 5-minute resolution since the 

hourly schedule is not prepared for that variability. This Operating Reserve may then be deployed by the 

5-minute scheduling program to ensure balance of supply and demand. Similarly, the 5-minute scheduling 

program may hold Operating Reserve for variability at a time resolution faster than 5-minutes. 

Uncertainty is change in power system variables that is unexpected. Operating Reserves are needed for 

uncertainty since a different supply-demand profile is needed than what was scheduled. Figure 1 shows an 

example of variability and uncertainty for VG output. This variability and uncertainty can occur to some 

degree with all power system variables. These two terms and how we have defined them are very 

important throughout the rest of this paper. 

Figure 1: Example of Variability and Uncertainty. 

 

Certain procedures are set forth by different entities on the amount of Operating Reserves required, who 

can provide them, when they should be deployed, and how they are deployed. The standards are generally 

based on certain reliability criteria and allowable risk criteria, but often differ, sometimes substantially, 

from region to region. Many studies have found that high penetrations of VG, such as wind and solar 

power, have such new characteristics on the power system that these standard rules must be accompanied 

by innovative methods and adjusted rules and policies to account for the increased variability and 

uncertainty that it introduces. It may be that using today’s standards alone simply cannot capture these 

characteristics. Different studies have used a number of different methods, all attempting to answer the 

same questions. 

This paper is a summary of operating reserves, their uses, and methodologies with emphasis on how their 

requirements may change with significant penetrations of VG. First, a brief overview is provided to 

describe the basics of power system operations, categorizing the many uses of operating reserve, 

describing each of the categories, and the impacts that VG may have on each category. The categories of 

operating reserves that we have defined have different naming conventions depending on the region, and 

effort must be made to understand a common term for each type. Section 3 discusses the rules and 

procedures of how system operations of today are defining and utilizing operating reserves in North 

America and in Europe, specifically looking at the North American Electric Reliability Corporation 

(NERC) and the European Network of Transmission System Operators (ENTSO) and each of their 

standards. We also emphasize some significant regional differences within North America. Section 4 
3 

discusses some of the new innovative methods that have been developed in large studies and fundamental 

research on both actual future systems and test systems with high VG penetrations. Finally, a summary is 

provided of the many differences and commonalities, and then recommendations for future research and 

current limitations are discussed. One objective of the report is to describe both commonalities and 

differences between actual system policies in different regions and differences between study methods 

used. Although there can be differences in each system based on its size, generating fleet, load 

characteristics and other factors, all of the regions and all of the studies are essentially requiring and 

utilizing operating reserves for the same reasons. Therefore, it is interesting to see requirements and 

methods that differ so much. This paper attempts to bring clarification between the policies of different 

regions and the methods of different studies. 
4 

2 Power System and Operating Reserves Overview 

Figure 2 shows a general power system load pattern for a single day. It shows the different time frames 

where different strategies are used to ensure that the load is balanced. Forward scheduling of the power 

system includes schedules and unit commitment directions to meet the general load pattern of the day. 

Load following is the action to follow the general trending load pattern within the day. This is usually 

performed by economic dispatch and sometimes involves the starting and stopping of quick-start 

combustion turbines or hydro facilities. Regulation is the balancing of fast second-to-second and minuteto-minute random variations in load or generation. This is done by centralized control centers sending out 

control signals to generating units (and some responsive loads) that have the capability to rapidly adjust 

their dispatch set points. These strategies represent the balancing during normal conditions of the power 

system. The load is never constant and therefore each of these strategies helps correct the load balance. 

Also, conventional generation output may vary in different time scales as well and can further impact the 

generation and load balance. Lastly, the load forecast is never 100% accurate and each of these reserves is 

used to help mitigate the effects of load forecast errors. 

Figure 2: Power system operation time-frames. 
5 

Figure 3 shows how reserves are used in a coordinated way to respond to an emergency event and represents 

the North American procedures. These emergencies can be caused by generation forced outages or other 

component outages (e.g., transmission lines or transformers), both of which cause near-instantaneous 

changes on the power system. Generation outages cause a deficiency in generation to serve the load and will 

usually result in frequency decline and negative Area Control Error (ACE). Under-frequency can lead to 

involuntary load shedding, and can cause damage to machines if the frequency strays too far from its 

nominal level. ACE, given in MW, is the power balance error of a balancing authority (BA). It is calculated 

as the total interchange schedule error of the balancing authority area with consideration of the balancing 

area’s response to frequency deviations (described in more detail further on). Transmission outages will 

result in a change in power flow that may cause overloading of lines or voltages that are not within their 

nominal levels. The common procedure for managing the possibility of transmission outages is by running 

security-constrained optimal power flow, which ensures that with no corrective action needed, power flows 

are still within their appropriate limits following transmission outages. 

During loss of supply events, additional supply needs to respond to the disturbance immediately. As can 

be seen in Figure 3, this includes a number of different responses that vary by response time and length of 

time the response is sustained. Initially, when the loss of supply occurs, synchronous machines must 

supply kinetic energy to the grid, and by doing so, slow down their rotational speeds and therefore the 

electrical frequency. This inertial response that comes from synchronous generators and synchronous 

motors helps slow down the frequency decline. In other words, the more inertia on the system, the slower 

the rate of frequency decline. During this decline in frequency, generators will automatically respond to 

the change in frequency through governor response, and some load response will balance the generation 

and load at some frequency less than the nominal frequency. Spinning reserve that is synchronous to the 

grid and unloaded from its maximum rating and non-spinning reserve, which can be off-line but able to be 

synchronized quickly, are both deployed to fill the gap in energy needed from the loss and restore the 

frequency back to its nominal level. Furthermore, many areas have spot prices that may increase during 

supply shortages and incentivize response from resources that can assist in the event. Lastly, supplemental 

reserves are deployed with slower response to allow the other reserves to be unloaded once again so that 

the system can be again secure for a subsequent event. For over-frequency events, though not as common, 

a similar response might occur, but a reduction in output would be needed rather than an increase. 

Figure 3: Reserve deployment. 

-10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

Minutes

Contingency

Occurs

Spinning & Non-Spinning Reserve

Frequency

Response

Reserves "Should" 

be Restored

Reserves 

"Must" be 

Restored

Market Response

Supplemental Operating Reserve
6 

In some cases, severe events are slower in nature. This may include constant increase or decrease in 

generation and/or load. Figure 4 shows one event where wind power steadily decreased for about four 

hours (yellow trace) [4]. When an event like this occurs where the wind power may be decreasing 

simultaneously with an increase in load, the effects are exacerbated. In most systems, the rules concerning 

how reserves can be used to respond to this type of event are not yet fully established. 

Figure 4: Wind ramp event, ERCOT February 26, 2008. 

The characterizations of these different operating reserves can have different terminology and definitions 

depending on the system. Recent work has similarly categorized the different operating reserve types, for 

example [5] [6] [7]. In Robours et al. 2005 [5], the authors discussed the details of European TSO policies 

(including two U.S. regions) with a focus on the timing and the required amounts of reserved used for 

contingencies. The same authors expanded this in [6] with more details on the rules, additional regions 

and countries, and included voltage control services. A report including authors of the various TSOs 

throughout the world [7] included additional operating reserve services from a number of countries and 

some more detail on the different categories of operating reserve in existence today. In this paper, we 

attempt to do the same, but with consideration of future requirements with high penetrations of VG. We 

discuss the categorizing of operating reserve for selected reasons, but emphasize that our categorization is 

an example of how to distinguish between the different services and that the categorization can be done in 

many different ways. It also doesn’t necessarily mean that requirements are enforced for each category 

and are completely decoupled from each other category. We separate the categories mainly for ease of 

understanding and demonstration. 

Operating reserves can be characterized by their response speed (ramp rate and start time), response 

duration, frequency of use, direction of use (up or down), and type of control (i.e., control center activation, 

autonomous/automatic, etc.). Some operating reserves are used to respond to routine variability of the 

generation or the load. These variations occur on different time scales, from seconds to days, and different 

control strategies may be required depending on the speed of the variability. Other operating reserves are 
7 

needed to respond to rare unexpected events such as the tripping of a generator. Another way of classifying 

the operating reserves could be based on whether they are deployed during normal conditions or event 

conditions. Normal conditions can be based on both variability and uncertainty, but are occurrences that are 

continuously taking place. Events can occur whether they can be predicted or not. There is a difference in 

the standby costs and the deployment costs for each reserve category based on how frequently they are used. 

This distinction along with the technical requirements leads to certain technologies being more suitable for 

different Operating Reserve types than others. 

Both the normal and event response categories can be further subdivided based on the required response 

speed. As discussed, some events are essentially instantaneous and others take time to occur. Different 

qualities of these reserves are needed for different purposes. For instance, instantaneous events need 

autonomous response to arrest frequency excursions. The frequency then must be corrected back to its 

scheduled setting and the system’s ACE must be reduced to zero during both instantaneous and noninstantaneous events. Lastly, there has to be some amount of reserves that can replace the operating reserve 

after they are deployed to protect the system against a second event. For the non-event reserves, they are 

typically meant to have zero net energy for a particular time period (over some time, they will have equal 

positive deployments and negative deployments in energy), and therefore we don’t consider the need for the 

replacement of these operating reserves in our discussions. Figure 5 displays the classification system we 

have just discussed with an example of their naming convention. It should be noted again that this 

classification can be done a number of different ways. Our examples include names and classifications that 

we have used throughout this paper. As you can see, the classification is not tied to any one system 

terminology, and also includes a number of types that may not even yet be in existence in current systems. 
8 

Figure 5: Example of operating reserve categories and how they are related. 

The tree in Figure 5 explains how the Operating Reserve types relate to each other with the higher level 

categories including those below. From the highest level, we define Operating Reserves as any type of 

capacity being used to support active power balance. This is then separated into non-event reserve and 

event reserve. Events include things that are severe and rare and non-events are continuous events that 

happen so often they are not distinguishable from one another. The non-event reserve is separated by 

speed with Regulating Reserve being faster and Following Reserve being slower. The speed that separates 

these two reserve categories varies from system to system with Regulating Reserves operating 

automatically within the shortest optimal dispatch or market clearing interval and Following Reserve 

operating as part of the optimal dispatch or market clearing interval. Furthermore, their purpose can be 

differentiated with Regulating Reserve being used to correct the current imbalance whereas Following 

Reserve is used to correct the anticipated imbalance. 

For event reserve, we classify Contingency Reserve and Ramping Reserve which are separated by speed 

as well. The speed that separates these two reserve categories is whether they are used for instantaneous 

Operating 

Reserve

Regulating 

Reserve

Contingency 

Reserve

Following 

Reserve

primary

Ramping 

Reserve

Non-event Event

Correct the current ACE

Manual

Part of optimal 

dispatch

Instantaneous Non-Instantaneous

secondary tertiary secondary tertiary

Stabilize Frequencyand/or ACE to zeroReturn Frequency to nominal secondaryReplace primary and and/or ACE to zeroReturn Frequency to nominal Replace secondary

Automatic

Within optimal 

dispatch

Correct the anticipated ACE
9 

events (or near-instantaneous, for example within a few cycles) or for non-instantaneous events. Further 

sub-categories are also added below the two event reserves. 

For the instantaneous events, or Contingency Reserves, a certain portion of Primary Reserve must be 

automatically responsive to the event to ensure the system’s frequency deviation is arrested and the load 

balance is maintained soon after the event. Primary Reserve must respond immediately following the 

event to avoid extreme frequency deviations that can cause damage or involuntary load shedding. Since 

this response stabilizes the frequency at some other level, Secondary Reserve is then deployed to return 

the frequency back to its scheduled setting. 

Finally, Tertiary Reserve assists in replenishing the Primary and Secondary Reserve that was deployed for 

the event so that within some time following the event there is enough to respond to a second event. The 

actual time allowed for full response from these reserve types may vary from system to system, but 

generally the need for Primary Response is tens of seconds, Secondary is a few minutes, and Tertiary is 

tens of minutes. For Ramping Reserve, there are somewhat different needs. Due to the slowness of these 

events, the automatic frequency responsive need is not necessary. The Secondary Reserve here would be 

to correct frequency or ACE. Tertiary Reserve would be needed to protect against a subsequent event that 

were to occur in the same direction. The full response for these types might be quite different than their 

counterparts under Contingency Reserve. Table I shows all the defined reserves referenced throughout 

this report and the usage of each. 

Table I: Operating reserves as defined throughout the rest of this report and their usage 

Name Use Common Terms 

Operating Reserve Any capacity available for assistance in 

active power balance. 

Non-event 

Reserve 

Capacity available for assistance in active 

power balance during normal conditions, or 

those that occur continuously. 

Regulating 

Reserve 

Capacity available during normal conditions 

for assistance in active power balance to 

correct the current imbalance that occurs, is 

faster than economic dispatch optimization, 

is random, and requires automatic 

centralized response. 

Regulating reserve, regulation, 

load frequency control, secondary 

control. 

Following Reserve Capacity available during normal conditions for 

assistance in active power balance to correct 

future anticipated imbalance, is not faster than 

economic dispatch optimization, and does not 

require automatic centralized response. 

Load following, following reserve, 

schedule reserve, dispatch 

reserve, balancing reserve. 
10 

Event Reserve Capacity available for assistance in active 

power balance during infrequent events that 

are more severe than balancing needed 

during normal conditions. 

Contingency 

Reserve 

Capacity available for assistance in active 

power balance during infrequent events that 

are more severe than balancing needed 

during normal conditions and are used to 

correct instantaneous imbalances. 

Contingency reserve (spinning and 

non-spinning reserve). 

Ramping Reserve Capacity available for assistance in active 

power balance during infrequent events that 

are more severe than balancing needed 

during normal conditions and are used to 

correct non-instantaneous imbalances. 

Ramping reserve. 

Primary Reserve - 

Contingency 

Portion of Contingency Reserve that is 

automatically responsive to instantaneous 

active power imbalance and stabilizes 

system frequency. 

Primary control reserve, frequency 

responsive reserve, governor 

droop. 

Secondary 

Reserve - 

Contingency 

Portion of Contingency Reserve that is not 

automatically responsive to the instantaneous 

active power imbalance and corrects 

frequency to nominal and/or ACE to 0. 

Secondary control reserve, 

spinning reserve. 

Tertiary Reserve - 

Contingency 

Portion of Contingency Reserve that is 

available for assistance in replacing Primary 

and Secondary Reserve used during a 

severe instantaneous event so that they are 

available for a subsequent instantaneous 

event that occurs in the same direction. 

Tertiary control reserve, 

replacement reserve, supplemental 

reserve. 

Secondary 

Reserve - 

Ramping 

Portion of Ramping Reserve that is used to 

correct the imbalance of a severe noninstantaneous event and corrects the 

frequency to nominal and/or ACE to 0. 

Ramping reserve. 

Tertiary Reserve - 

Ramping 

Portion of Ramping Reserve that is 

available for assistance in replacing 

Secondary Reserve used during a severe 

non-instantaneous event so that eventually 

Secondary Reserve are available for a 

subsequent event that occurs in the same 

direction. 

Replacement reserve for ramping 

reserve. 
11 

Different generation and responsive load technologies are better at providing different types of operating 

reserves. Conventional thermal and hydro generating units are inherently limited in the amount of 

spinning reserve they can provide by their ramp rates, although hydro generating units and combustion 

turbines may have faster ramp rates than steam turbine generators. These units can only supply as many 

MW of reserves as they can ramp in a specified time based on its regions’ rules. Some internal 

combustion engine driven generators, aero-derivative combustion turbines, and hydro plants can start fast 

enough to provide non-spinning reserves even if they are not currently operating. Nuclear units have 

historically been built for base load and therefore usually do not provide operating reserves. Primary 

Reserve can be provided by any generator with a governor that can respond rapidly and that can maintain 

that response as frequency declines. Nuclear plant governors are typically blocked, preventing them from 

providing frequency responsive reserve. Large thermal plants operating with their valves fully open to 

maximize efficiency (sliding pressure or boiler follow mode) effectively disable the governor and do not 

provide frequency response either. Some combustion turbines’ output declines with frequency since the 

compressors move less air as the speed decreases, also reducing their ability to provide frequency 

response. Some research is looking at the potential for wind power to provide certain types of operating 

reserve [8] [9]. 

Responsive load can be an ideal provider of many of the different types of Operating Reserves. Response 

can be faster than generation since full response is achieved as soon as the load control breaker opens; no 

ramping is required for most responsive loads. Response can be automatic as well if an under-frequency 

relay is used with a trip setting in the governor response range. Different loads can be set to trip at 

different frequencies, providing a frequency droop curve that mimics generator governor response. The 

contingency reserve characteristics of constantly standing ready with relatively infrequent and short actual 

deployments also match the response preferences of many responsive loads. 

Regulating Reserve and Following Reserve are typically provided by units that are on the margin for 

providing energy economically. Regulating units must also have infrastructure set up so that they can 

receive and respond to automatic generation control (AGC) signals. Regulating Reserve resources also 

should have fairly fast and accurate response rates to adjust output to quickly changing signals. Recently, 

new market rules are allowing demand and limited energy storage resources to provide Regulating 

Reserve. This situation is continuously being evaluated so that more and more resources that are capable 

of providing any of these services are not precluded. The definition of the operating reserve should be 

technology neutral, meaning it should describe the desired response, not the type of resources that are 

allowed to provide that response. 

Since the advent of electric power industry restructuring, many regions throughout North America and 

Europe have developed ancillary markets for some Operating Reserves, along with their functioning 

energy markets. In many cases, these are hourly or faster markets that set prices based on the marginal 

cost to provide the type of Operating Reserve. In many markets, these Operating Reserves are cooptimized with those of the energy markets. This way, the most efficient scheduling is performed with all 

services. Prices in the Operating Reserve markets then can reflect the cost of providing the service as well 

as the lost opportunity costs. A lost opportunity cost reflects the fact that if a unit is asked to supply 

reserves, it may be losing out on profit to supply energy or possibly another reserve service [10][11]. The 

lost opportunity cost would normally be given back to the unit in this situation and often will set the 

Operating Reserve price for all resources supplying the service. Currently, Contingency Reserves, which 
12 

may include Secondary and/or Tertiary Reserves, and Regulating Reserves, are the most common 

Operating Reserves to have dynamic hourly (or shorter) markets. The way the markets are designed is 

very important when evaluating the different operating reserve practices. 

In recent years, much interest has been focused towards increased amounts of renewable generation on 

the power system. This includes a large portion of wind and solar power, both of which are referred to as 

VG. VGs have unique characteristics because their varying energy source can lead to a maximum 

generation potential that varies on different time scales and cannot be perfectly predicted. Many studies 

have shown that as these VG resources increase on power systems, it will impact the operation of the 

system [12] [13] [14]. 

Increases in VG can have impacts on many of the different Operating Reserve types mentioned. During 

normal conditions, the variability and uncertainty of VG will add to the variability and uncertainty of load 

and other generating resources in each of the different time scales. The increased variability that VG 

brings can increase the need for Following Reserve and Regulation Reserve, depending on the time scale. 

Also, a collection of VG units can contribute to a ramp event either by itself or with load. This may 

impact how Ramping Reserves are considered. Large VG forecast errors combined with load forecast 

errors are much more common and can be more severe compared to load forecasts alone. Such issues can 

be cause for reliability concerns, similar to those described as contingency events. However, their 

characteristics relating mainly to the speed at which they occur show some distinct differences. Therefore, 

it is important to hold the right type of Operating Reserves when responding. Next, we discuss in more 

detail each type of reserve discussed and relate how VG may have an impact on their requirements. 

2.1 Regulating Reserves 

Regulating Reserve covers the continuous fast and frequent changes in load and generation that create 

energy imbalance [15]. It is the finest scale of balancing done during normal conditions. It is used to 

correct the current imbalance caused load or generation varying within a period that has been scheduled 

by the shortest applicable market or economic dispatch interval. It is also used to correct the current 

imbalance from the total load or generation that differs from the forecasted condition. It corrects the 

current imbalance. In some areas, the shortest scheduling interval may be up to an hour and in others this 

may be as short as 5 minutes. What this means is that if the system operator dispatched units thinking the 

net load was moving in a certain direction, and the magnitude or direction is different than anticipated, the 

Regulating Reserve must be used to correct the mistake before the next economic dispatch cycle is 

finished. This could increase required Regulating Reserves if the very short-term windforecasts are not 

accurate. 

In many isolated systems, this reserve is provided by governor response (e.g., U.K. and Ireland, other 

larger island systems). The resources with governors can then cover the normal balancing needs inside the 

economic dispatch interval automatically. In large interconnected systems with multiple balancing regions 

(e.g., North America and Continental Europe), normal imbalances (non-events) usually do not trigger 

frequency response due to the size of the system and the dead bands placed on the governor systems and 

therefore, the governor or frequency response control are only deployed during larger contingency events. 

Instead, these areas have units that have AGC in which they can be automatically dispatched centrally by 

the control center operator [16] [17]. The signal is not solely controlling frequency, but is in fact 

correcting the balancing area’s imbalance based on its ACE. ACE is the MW imbalance at any given time 
13 

and is calculated according to the equations below. The difference between the total actual and scheduled 

interchange flows (NIA – NIS) is the total imbalance of the individual balancing area’s generation (Σ Pgi) 

and load plus losses (Σ Pdj + LOSSES) at any instant. However, since balancing areas are expected to 

respond to frequency deviations, which are based on the imbalance of the entire interconnection, a 

frequency component is added to the equation (FA: actual frequency; FS: scheduled frequency) to ensure 

that each balancing area helps restore frequency to the nominal value during a frequency excursion. The 

ACE calculation describes the individual balancing area’s power imbalance while still expecting it to 

respond to frequency deviations, based on the area’s frequency bias setting B, when the frequency 

excursion may have been caused by another area. This is called Tie-Line Bias Control and is generally the 

way units on Regulating Reserve are used in large interconnected systems. In an isolated system, the first 

component of ACE would be zero since there is no actual or scheduled interchange. 

ACE = (NIA – NIS) – 10B (FA-FS) 

௜ܲ݃ ෍ ൌ ܵܫܰ – ܣܫܰ

ேீ

௜ୀଵ

െ ቌ෍ ܲ݀௝

ே஽

௝ୀଵ

ቍܵܧܱܵܵܮ ൅

Diversity inside the dispatch interval time frame reduces the power system Regulating Reserve 

requirements. Unlike the highly correlated daily load pattern, the minute-to-minute variability of 

individual loads is highly uncorrelated. The relative Regulating Reserves needed to achieve acceptable 

performance are consequently lower for larger balancing areas than for smaller balancing areas. Diversity 

is also important in understanding the impact VG has on Regulating Reserve requirements. For example, 

one wind turbine could vary by quite a bit on a minute-to-minute basis. However, because the minute-tominute variability of individual wind turbines are not correlated, once aggregated with multiple turbines, 

the per unit output of the entire wind plant is much less variable in this time frame. When looking at an 

entire system, a large number of VG plants that are not geographically close to one another will achieve 

even further decreases in per unit variability. Figure 6 is based on [18] and shows that; comparing 138 

turbines with 14 turbines (a subset of the same wind plant) reduces the 1-minute step change and standard 

deviation from 1.2 to 0.5 per unit and 2.1 to 0.8 per unit, respectively.3

 This is because the wind speed 

correlations occurring on a minute-to-minute basis are very location specific and therefore, dispersed 

wind plants generally have no correlation to one another on this time frame. The Regulating Reserve 

increases due to variability on this time frame may show increases, but these will depend on how many 

wind plants there are and their geographic proximity. It is important to understand the correlation of this 

variability with all sources that cause the need for Regulating Reserve. 

 3

 The average is the average of absolute differences from 1-minute to -hour steps, and that the % is % of installed capacity. 
14 

Figure 6: Wind power step-change magnitude and standard deviation for different wind turbine sets. 

The uncertainty of VG can also have an impact on Regulating Reserve requirements. Regulating Reserves 

are utilized to meet actual imbalances that occur while all units that are not providing Regulating Reserve 

are fixed (or ramping toward their next economic set-point). Therefore, if the forecasts used to schedule 

units not on Regulating Reserve are incorrect, units on Regulating Reserve must correct this error. For 

example, most U.S. ISOs and some large non-ISO regions have economic dispatch programs that are run 

every 5 minutes, and may take up to 5 minutes to compute the optimization and transfer both the input 

and output data. Although load forecast in these periods have been pretty accurate due to its trending 

nature, wind power forecasts usually are most accurate when using persistence forecasts (e.g., the last 

available output reading is the forecast for the next time period). Figure 7 shows this relationship of both 

variability and uncertainty impacts that can impact Regulating Reserve. The plot shows actual wind data 

for a twenty-minute period. The period of interest is 12:10 to 12:20. For the 5-minute economic dispatch 

period of 12:10 to 12:15, a forecast was used based on the actual wind data from 12:00 to 12:05, since the 

economic dispatch had to start at 12:05 due to the 5 minutes it needed to collect input, compute its 

optimization, and transfer the output signals, and this was the latest information it could use as the input. 

The interval 12:15 to 12:20 similarly used the average wind output from 12:05 to 12:10. Figure 7 shows 

these schedules, as well as what the actual average for all intervals were. Since the Regulating Reserve 

would attempt to follow the total system ACE (which includes the wind forecast imbalance), it can easily 

be seen how the Regulating Reserve is used to assist in imbalance caused by both variability and 

uncertainty. Figure 8 shows this more clearly. 
15 

Figure 7: Example of wind’s uncertainty and variability impacts on Regulating Reserve. 

0

10

20

30

40

50

60

70

80

90

100

12:00:00 12:05:00 12:10:00 12:15:00 12:20:00

Power (MW)

Actual Wind

Forecasted Wind 

(schedule)

Average Wind
16 

Figure 8: Actual Regulating Reserve needs due to variability and uncertainty. 

It is very difficult (or impossible) for most resources to follow the instantaneous ACE values on very high 

time resolution. Figure 9 shows a typical fleet of large coal-fired generators following the load (shown as 

regulation up or down signals) in which a lag can be observed. It can also be seen that there is less high 

frequency noise in the generation signal compared to the load signal. It creates much unnecessary wear 

and tear impacts on the generators when rapid upward and downward movement is used. It also is 

arguable whether this type of behavior actually benefits system reliability. For these reasons, many AGC 

schedules will filter and integrate the ACE signal before distributing control schedules to Regulating 

Reserve units. For example, the ACE distributed to the Regulating Reserve units in many regions may be 

calculated as in the equation below where α is a proportional gain and T is the integral period. Typical 

values are α=(0,0.5) and T=(50,200)seconds. Recently, some energy storage devices have showed ability 

to follow faster, unfiltered ACE signals, with little or no wear and tear caused by doing so [19] [20]. 

൅ ሻݐሺܧܥܣ כ ߙ ൌ ሻݐሺܹܧܰ_ܧܥܣ

1

ܶ න ܧܥܣሺ߬ሻ݀߬

-10

-5

0

5

10

15

20

12:10:00 12:15:00 12:20:00

Regulation Due to Variability

Regulation Due to Uncertainty
17 

Figure 9: Typical thermal-generation fleet performance following Regulating Reserve signals. 
18 

2.2 Following Reserves 

Following Reserve is very similar to Regulating Reserve, but on a slower time scale. It is needed to 

accommodate the variability and uncertainty that occur during normal conditions. Our definition of 

Following Reserve represents the movements that are reflected in the economic dispatch to correct an 

imbalance that will occur in the future. Variability and uncertainty requiring Following Reserve impacts 

are much less random, but larger in magnitude than Regulating Reserve. Following Reserve covers both 

typical load and VG patterns and inter-schedule interval variability. It also includes the uncertainty in 

forecasts from previous scheduling intervals to updated scheduling intervals, and with good information 

can be better predicted. For example, the uncertainty from a day-ahead or hour-ahead unit commitment 

would be met with Following Reserve in the real-time economic dispatch. In today’s paradigm, 

Following Reserve is often a byproduct of the energy markets. Generally, the load follows a similar path 

every day, and therefore, the ramping and energy needed to follow this load can usually be easily supplied 

by energy markets. On some occasions, dedicated Following Reserves may be required. A hypothetical 

example of how this may occur can be seen in Figure 10 [21]. From 8:00, the load (or net load) has a very 

fast upward ramp. The cheap base load unit cannot meet the load itself because of its slow ramp rate. 

Therefore, an expensive peaking unit is dispatched with a fast ramp rate. The question in this case is 

whether the peaking unit is providing an ancillary service or if it is just providing energy. 

Figure 10: Insufficient ramping capability may result in the need for peaking response inflating the 

energy price. 

It is still unclear if the trending patterns that are associated with load following are still intact with high 

penetrations of VG. The VG addition to the generation stack makes following the net load less 

predictable, and in some hours, units with higher ramp rates or more flexibility need to be available. Some 

of the large differences may come in how the initial unit commitment is made considering Following 

3200

3000

2800

2600

2400

4:00 AM 6:00 AM 8:00 AM 10:00 AM 12:00 P M 2:00 PM 4:00 PM 6:00 PM

Base Load - $10/MW h

Peaking -

$90/MWh

Energy Price $10/MW h E nergy Price $10/MW h E nergy Price Increases

to $90/MW h because

base unit can't ramp

fast enough
19 

Reserve with and without VG. For example, Figure 11 shows seven hours of a typical load ramp. The 

blue trace is the actual load and the red trace is the hourly average. The red trace might be the schedule 

that is used when making the unit commitment decision. The trend is continuously increasing and units 

can be committed sometime during the hour as prepared. For hour 17 for example, the first half of the 

hour is below the hourly average and the second half of the hour is above the hourly average. During realtime operations, the resources can be directed to start toward the middle of the hour rather than to the top 

of the hour based on the actual conditions. 

Figure 11: Typical load ramp and hourly average schedule to follow load. 

Figure 12 shows the same plot with significant VG subtracted from the load to display the net load. The 

trends now are not monotonically increasing or decreasing as they were before. For example, in hour 18, 

the unit commitment would schedule to the hourly average and in hour 19, it might begin to turn off units. 

The big spike during hour 18 may not have been easily handled by the online units. This may show that 

certain Following Reserve capacity with specified ramping capability may be needed when making a unit 

commitment decision to be able to accommodate the sub-hourly variability. Alternatively, if the unit 

commitment used sub-hourly resolution when optimizing, this issue may not need to be dealt with 

explicitly. In other words, the Following Reserve is accommodated by advanced scheduling. It then 

becomes more of a market issue on whether the units performing the Following Reserve services deserve 

15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00

MW

Load

Hourly Average Load
20 

to be paid more than the ones who do not, and whether those units set the energy price that all other 

generators receive.4

 These same issues described for the variability can also be seen by the increased 

uncertainty of VG. Errors occur in the prediction of the net load and these errors will need to be 

accommodated with the Following Reserve. For example, the amount of resources committed from the 

day-ahead may need to be increased in case the day-ahead prediction of the net load is incorrect. The need 

for Following Reserve from the increased uncertainty may be required regardless of the length of the 

commitment or dispatch interval. 

Figure 12: Load following needs for a more variable net load. 

2.3 Contingency Reserves 

Unlike Regulating and Following Reserves, Contingency Reserves are called upon during rare sudden 

events. The events usually considered are a large loss of supply either from generating resources or large 

transmission lines carrying imports, but more generally can consider loss of large blocks of load as well. 

Contingencies occur quickly and much of the reserves must act immediately. Figure 13 shows a typical 

response to a large loss of a generating unit. Immediately following the event, the inertia of synchronous 

rotating machines will either supply or absorb the energy difference, respectively for loss of supply and 

 4

 In two-settlement markets, real-time prices are paid only to resources that have differed from their forward agreed schedules. They will only 

get paid for the quantity of energy that is different from their day-ahead schedules. 

15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00

MW

Net Load

Hourly Average Net 

Load
21 

load. Following this initial response, generator governors sense the frequency change and begin to adjust 

the input to increase or decrease the energy needed.5

 The governors respond to give more or less energy 

based on the frequency excursion. 

Figure 13: Example contingency (loss of supply) event and typical responses. 

The inertial response and governor control (Primary Reserve) will stabilize the system frequency. 

However, it will be at an off-nominal frequency in which the system may be vulnerable towards collapse 

if another event were to occur. Therefore, Secondary Reserve response is required to return the frequency 

back to its nominal level.6

 Even the frequency levels that occur during single events can cause damage if 

sustained over a long period of time. Therefore, the Contingency Reserves should return frequency back 

to its nominal value fairly quickly. If nothing else occurs, at the time the Contingency Reserve has 

converted into energy, the system has less or no Contingency Reserves available if an additional event 

were to occur. Therefore, it is important for slower Tertiary Reserve response resources, which may 

mostly be off-line and starting soon after the contingency, to replace the Primary and Secondary 

Reserves. The response required of these reserves is therefore up to the operator’s requirement (whether 

directly or via standards) of how soon following one contingency the system should be secure towards 

another. 

 5

 Motor-driven loads also naturally provide favorable frequency response with the mechanical load decreasing as frequency and rotational 

speed fall and increasing as frequency increases. This natural response is lost if the load is supplied through a solid-state variable frequency motor 

drive. 6

 Though this shows AGC on Figure 13, it can be a combination of units on AGC and manual response 
22 

Since we have defined Contingency Reserves as those that are needed for sudden near-instantaneous 

events, the impact of the variability and uncertainty of VG generally does not constitute a contingency 

event. Today’s requirements for Contingency Reserve are usually based on the largest credible 

contingency that can occur on the particular system (which may include multiple generators or events). 

The system is then prepared to respond to any lesser event as well. Although faults on individual wind 

turbines (or PV cells) are negligible, a fault on the connection point disconnecting all the energy from the 

entire collection of individual facilities could be a major loss and should be considered as a contingency. 

If a single connection point serving VG to the grid could possibly have more capacity than the existing 

largest contingency, this may change the reserve requirement. 

Large wind and solar ramping events are similar to conventional generation contingencies in that they are 

large and rare. They differ in that they are much slower (Figure 4 vs. Figure 13), last longer, and can be 

predicted. The extent to which conventional Contingency Reserves can be used for VG ramps is being 

discussed in certain areas. 

2.4 Ramping Reserves 

Ramping Reserve is probably the least well defined category of our list in current systems. Most, if not all 

balancing areas, do not consider this category today. This type of reserve is used for rare severe events 

that are not instantaneous in nature (Figure 4). Large load ramps occur every day, are predictable, and are 

met with Following Reserve and the action of the energy markets rather than with Ramping Reserve. Due 

to the greater unpredictability of wind and solar, infrequent large magnitude events may occur that require 

Operating Reserves. The way that Ramping Reserves are separated from Following Reserve is up to the 

particular balancing area. For example, Following Reserves may cover 95% of the possible deviations, 

and Ramping Reserves may cover the remaining 5%. Figure 14 shows a plot of a missed net load forecast 

and the actual net load. The plot shows a wind ramp that was not forecast to happen and therefore, the 

system operators were not prepared for the large increase in net load. 
23 

Figure 14: Net load forecast that does not forecast wind ramp. 

With conventional practice, the system may have committed about 2100 MW to meet the forecast net 

load, plus additional Contingency Reserves, during hours 0 through 4. For a system of this size, an 

unexpected 600 MW increase in net load is pretty large (25% of the net load). If the Contingency 

Reserves were used to compensate for the drop in wind, there would be no more capacity available to 

respond if a conventional contingency were to occur during these hours and the system might have to 

shed load. On the other hand, the system would not need to respond to the 600 MW increase in net load in 

10 minutes as is a typical response since the actual event took over 2 hours. It would have had access to 

much slower resources and offline resources during the entire event. Therefore, the optimal reserve to use 

for this event would not need to be as fast and a large portion could be offline. 

Much research is currently being conducted on wind ramp forecasting [22]. Small changes of wind speed 

on the cubic region of a wind power curve can cause large relative changes in power, and the processes 

that cause these large changes can differ dramatically by region and season. Each different weather 

process that causes wind ramps requires different prediction techniques. The actual forecast that is 

received for wind ramps may be implicit or explicit, ramp rate or ramp event, and probabilistic or 

deterministic. This forecast should be the primary input (along with forecasts of load and other VG that 

cause large ramping) into the operator’s decision on how much Ramping Reserve is needed, and the ramp 

0

500

1000

1500

2000

2500

3000

3500

22:48 0:00 1:12 2:24 3:36 4:48 6:00

MW

Wind

Load

Net Load

Net Load Forecast
24 

rates and percentage of online capacity that is needed. The use of this information may be for economic 

reasons as well. Offline reserves cost very little while standing by, but usually cost a lot to be activated, 

which is the opposite of online reserve, which is expensive to procure. Therefore, the probability that the 

ramp will happen may influence how much online reserve is to be used compared to offline reserve. If 

there is a 5% chance of the ramp happening, offline reserve might be best for the event, whereas if there is 

a 75% chance of the ramp occurring, online reserve would make more sense to be held. Obviously, the 

predicted ramp rate and magnitude of the ramp event will also influence the characteristics of the 

resources providing the reserve that is held. 

As shown in Figure 5, there is no Primary Reserve below Ramping Reserve. Because of the speed with 

which these events occur, there is no need for resources to automatically respond to stabilize the 

frequency since the time delays of the manual response used are quite sufficient. However, since the 

events can be large, there may be a certain type of Tertiary Reserve that is kept so that when the Ramping 

Reserve is used for the event, it can be replaced for a second event that may happen in the same direction 

(positive or negative ramp). This Tertiary Reserve is very different than that which would be used for 

Contingency Reserve. For instance, if a wind ramp occurs so that at the end of the ramp the wind plant is 

either near its rated capacity (for up-ramps) or close to zero (for down-ramps), it is not possible for an 

additional wind ramp event to occur in the same direction. Therefore, the type and the actual need will 

depend on what type of ramp event it is, as well as information on the probability of when the next event 

may occur. 

2.5 Primary Reserves (Under Contingency Reserves) 

Primary Reserve as shown in Figure 5 is a sub-category that is part of Contingency Reserve. Thereby, a 

certain portion of the Contingency Reserve must be automatically responsive to changes in frequency. 

During loss of supply contingency events, the frequency will decline based on the rotating machines 

slowing down to provide inertial energy (alternatively they will speed up during loss of load events). 

Figure 15 shows this inertial response and the frequency decline from point A to point C [23]. When 

supplying the energy needed during a loss of generation, other machines will supply kinetic energy to the 

grid and slow down, reducing the system frequency. When absorbing energy during a loss of load where 

there is too much generation, the machines will speed up and the frequency will increase. The amount of 

inertia on an interconnection will determine the rate at which the frequency deviation occurs. Generally, 

the more rotating synchronous machines, the higher the inertia and the slower the rate of change of the 

frequency deviation. 
25 

 Figure 15: Frequency response to disturbance. 

Soon after the event and frequency deviation occurs, generators and loads can then sense this change of 

frequency and start to adjust mechanical input to provide opposing response through its governor systems. 

This may include a combination of electrical, mechanical, and hydraulic means to adjust the input to the 

turbine (e.g., opening steam valves in a steam turbine generator). These governor’s control equipment is 

provided a feedback signal, called droop characteristic, that allows a given frequency change to cause 

adjustment to a given power output change. Droop results in frequency stabilizing at point B in Figure 

15, somewhat below the point A starting point. Figure 16 shows the droop curve. The slope of the line is 

considered the droop characteristic. The droop is usually somewhere between 4-6%, meaning for a 5% 

change in frequency (e.g., a 2.5 Hz for 50-Hz system and a 3 Hz for 60-Hz system), the generator 

controller would change its output by 100% of its capacity. Figure 16 shows a 5% droop curve with the 

unit’s set point set at 80% of its output. 

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

Time (Seconds)

Governor/Load Response (MW)

59.60

59.65

59.70

59.75

59.80

59.85

59.90

59.95

60.00

60.05

60.10

Frequency (Hz)

Governor Response

 Load Response

Frequency

A

B

C

NERC Frequency Response =

 Generation Loss (MW) 

FrequencyPoint A-FrequencyPoint B

Slope of the dark green line 

illustrates the System Inertia 

(Generation and Load). 

The slope is ΔP/(D+2H)

Pre Event Frequency

Frequency Nadir:

Generation and Load Response equals 

the generation loss

Settling Frequency: 

Primary Response is almost all deployed
26 

Figure 16: Droop curve with 5% droop. 

There is one key difference in Figure 16 from governor droop curves in practice. In practice, there is 

normally a small governor dead band around the nominal frequency so that small frequency deviations are 

ignored to prevent unnecessary movements from the generating units. This is shown in Figure 17. A typical 

dead band might be in the range of 10-50 mHz. Therefore, depending on the size of the frequency deviation, 

the frequency response may differ depending on if the governors are triggered or not. Additionally, Figure 

15 shows that load responds to frequency as well, usually reducing about 1 to 2 times the frequency 

deviation in per unit (i.e., a 1 or 2% change in load for a 1%, or 0.3 Hz change in frequency for 60-Hz 

system,). This total Primary Reserve assists in arresting the frequency deviation, balancing the generation 

and load, and stabilizing the frequency to a steady-state value. It allows time for the Secondary Reserve of 

the Contingency Reserve to make up for the power loss to return frequency back to its scheduled setting. 

0.98

0.99

1

1.01

1.02

1.03

1.04

1.05

0 10 20 30 40 50 60 70 80 90 100

frequency (p.u.)

Power Output (p.u.)

Set Point

Δ = R = - 0.05%
27 

Figure 17: Governor droop curve with dead band. 

Primary Reserve is needed to stop frequency deviations from becoming too large. This protects generators 

from excessive frequency deviations which can create conditions that may cause damage to the generators 

or set off under- or over-frequency relays which can shed system load or disconnect generators. An 

interconnection or balancing authority can define its total frequency response through historic analysis as 

well as analytics. This term is referred to as the ‘frequency response characteristic,’ with units usually of 

MW/0.1Hz, and defines how much response the system will give following a change in load balance. It 

should be noted that even though this value is often given as a single value in many interconnections and 

balancing areas, it is highly non-linear and conditional depending on what resources are on line, what 

loads the system currently has, and other things like for example governor dead bands. The frequency 

deviation for determining the frequency response characteristic usually is measured at the instant right 

before a disturbance and the time where the frequency settles to a steady-state value, usually about 30 

seconds following the disturbance. A similar characteristic can measure the frequency deviation from the 

instant before the event and at the frequency nadir as is suggested in [24]. 

Because of their slow movements, VG events (specifically wind) involving these resources have very 

little impact on the need for Primary Reserve. Although more severe in the 5 to15-minute time frame, 

even PV plants can avoid extreme imbalances in the Primary Reserve time frame due to increased 

geographic diversity [25]. However, many of the VG resources that are supplying energy are displacing 

synchronous machines that have inertial response and governor response. While modern wind turbines 

can be designed to provide emulated inertia and governor response, most existing installed wind turbines 

currently do not provide either type of response. However, variable-speed wind turbines with power 

electronics can provide this type of service with a similar type of response to the conventional generation 

response [26][27][9]. 

50

60

70

80

90

100

110

120

130

140

150

59 59.5 60 60.5 61

Frequency (Hz)

Generator Output (MW)

Requested Output

Dead Band - No Governor Response

Generator Output

Adjusted Locally by Governor In 

response To System Frequency
28 

2.6 Secondary Reserves (Under Contingency Reserves and Ramping 

Reserves) 

Secondary Reserve for both Contingency Reserve and Ramping Reserve are used to return the frequency 

back to its nominal value and reduce ACE back to zero. This is the majority of the Contingency and 

Ramping Reserves and therefore, its descriptions and discussion about how VG can impact these type 

reserve types are covered under Section 2.3 and Section 2.4. 

2.7 Tertiary Reserves (Under Contingency Reserves and Ramping 

Reserves) 

Tertiary Reserve is unique because it is the only reserve category that is not deployed for energy 

imbalance, but is instead deployed for reserve imbalance. In other words, it is held in some manner so that 

when certain Operating Reserve types are used to correct the energy imbalance and converted into energy, 

it is used to restore that form of Operating Reserve. Tertiary Reserves do not need to be as fast as the 

reserves they are restoring. By increasing output (or decreasing consumption) slowly, Tertiary Reserves 

can allow the fast resource that was used to correct the imbalance to return to its reserve mode and thus 

restore the power system’s response capability. The actual response time will depend on how soon the 

system must be ready for a subsequent event following the first event in the same direction (e.g., energy 

insufficiency or surplus). The Tertiary Reserve must sustain its response until the reserve it is replacing 

has been restored. Because Regulating Reserve and Following Reserve are used continuously in both 

positive and negative directions, they are essentially replaced continuously, which is why Tertiary 

Reserve is not applicable to these types. 

Tertiary Reserve changes needed with increased penetrations of VG were briefly discussed in both the 

Contingency Reserve and Ramping Reserve sections (2.3 and 2.4, respectively). Basically, it will be a 

function of the probability of occurrence of an additional event following the original event, how soon it 

will happen, and what the acceptable level of risk is that the system is willing to allow. 
29 

3 Operating Reserves in Practice 

We will now describe how different regions currently perform the operating reserve function. We will 

look at each of the categories as discussed in section 2 and evaluate how requirements are determined, 

what resources or technologies can provide them, when they should be deployed, how they are deployed, 

and any proposed changes in the future to each category. Throughout this section, reserve names with 

capital letters refer to our classification in section 2 and reserve names in italics refer to the naming used 

for the particular system being described. In some cases, reserve naming for a particular region might 

represent two of the categories discussed in section 2 and seen in Figure 5. Alternatively, two of the 

categories in Figure 5 might be represented by one name or definition in a particular region. It is 

important to note the differences between regions and in some cases we attempt to explain some of the 

possible reasons for those differences. Where applicable we emphasize any rules or procedures relating to 

operating reserves requirements that are impacted by VG. The paper will discuss both North America and 

European practices, with additional insight on some key regional differences in particular regions in 

North America. 

3.1 North America (NERC) 

The main organization for administering the standards in North America is the North American Electric 

Reliability Corporation (NERC). Although many regions inside North America may have specific 

regional requirements, NERC standards are overarching and can be seen in the NERC standards 

document [28]. The Federal Energy Regulatory Commission (FERC), which is the regulator for 

wholesale electric energy trading between states in the United States, designated NERC as the Electric 

Reliability Organization in 2007. NERC now has authority to issue penalties to organizations that violate 

reliability standards [29]. So far, no specific procedure or standard pertaining to operating reserve in 

NERC has been modified to account for increased VG. However, NERC is currently pursuing an 

initiative that is looking at how standards may have to change with high penetrations of VG [30]. Figure 

18 describes the four interconnections and the NERC reliability regions in North America. 
30 

Figure 18: NERC Interconnections and Reliability Regions. 

North America also has a unique distribution of power system structures. NERC defines a balancing 

authority as the authority that is responsible for balancing the generation and load for its balancing authority 

area. The two terms are often used somewhat interchangeably and shortened to balancing area, or BA. Each 

interconnection has a number of different BAs ranging from one (ERCOT and Quebec) to 68 (Eastern 

Interconnection). Figure 19 shows that there has been a trend towards balancing area consolidation, 

especially within the PJM and MISO regions. But there are also still numerous small balancing areas. 
31 

Figure 19: While there is a balancing area consolidation trend, there are also numerous small 

balancing areas. 

The BAs in each interconnection vary on whether they are administrated in connection with wholesale 

energy markets with Independent System Operators (ISO) or Regional Transmission Organizations 

(RTO) or whether they are administered by regulated utilities [31]. The different administrative 

mechanisms affect how the policies, rules, and standards pertaining to operating reserve are developed. 

Figure 20 displays the different ISO and RTO regions that represent organized electricity markets in 

North America. Everywhere where there is not an ISO or RTO there are utilities which can range from a 

large regulated publicly traded corporation to a small cooperative or municipality. 
32 

Figure 20: ISO and RTO regions in North America. (www.isorto.org) 

The rest of this section will describe the different policies relating to the different categories for Operating 

Reserves under the NERC system. 

3.1.1 Regulating Reserves 

Terminology: NERC uses the term regulating reserve in its standards and documents. It may also refer to 

the service as regulation service or regulation. 

Required Amount: NERC does not specify any direct requirement for regulating reserve. Instead, 

NERC standard BAL-005, requirement R2, states that “Each balancing authority shall maintain regulating 

reserve that can be controlled by AGC to meet the Control Performance Standard.” The control 

performance standard is based on two separate metrics, CPS1 and CPS2, which are based on NERC 

standard BAL-001. Both of these measure how well the balancing area is balancing its load with 

generation based on its ACE. Note that ACE according to NERC is defined as the following: 

ܧܥܣ ൌ ሺܰܫ ஺െ ܰܫௌሻ െ 10ܤሺܨ ஺െ ܨௌሻെܫொ

Where NI is the sum of net interchange in MW, defined with exporting being positive, B is the frequency 

bias setting in MW/0.1Hz, F is the frequency in Hz, and IME is the meter error correction factor in MW. 

CPS1 is defined by the following equations: 

100 ൒ ܲܵ1ܥ

ܥܲܵ1 ൌ ሺ2 െ ܨܥሻ כ 100
33 

ൌ ܨܥ

ܨܥଵଶି௠௢௡௧௛

߳ଵ

ଶ

ܨܥ௞௖௢௟௖ି௡௜௠௨௧௘ ൌ ൤ሺ

ܧܥܣ

െ10ܤሻ௖௟௢௖௞ି௠௜௡௨௧௘ כ∆ ܨ௞௖௢௟௖ି௡௜௠௨௧௘൨

CF is the compliance factor and CF12-month is calculated by taking the average of CFclock-minute for all 

available minutes for a 12-month period. ߳ଵ is a constant that is derived from a targeted 1-minute 

frequency bound calculated for each interconnection. The measure compares the square of the targeted 

bound with the product of the actual frequency deviation and the balancing area’s ACE imbalance. Note 

that both ACE and frequency deviation are signed quantities. CPS1 rewards a balancing area if its ACE is 

in the direction that is trying to restore system frequency (e.g., over-generating when frequency is low) 

and penalizes a balancing area if its ACE is in the direction that is contributing to the system frequency 

error (e.g., under-generating when frequency is low). Note too that CPS1 is a statistical metric measured 

over a year; it does not require perfect compliance. CPS1 is also a 1-minute metric; it does not measure 

imbalances that are shorter than 1 minute. CPS2 is described next with the following equations. 

90% ൒ ܲܵ2ܥ

ܥܲܵ2 ൌ ൤1 െ

௛௧௠௢௡ݏ݊݋݅ݐ݈ܽ݋ܸ݅

௛௧௠௢௡ݏ݀݋݅ݎ݈ܾ݈ܽ݅ܽ݁ܲ݁ݒܷ݊ܽ െ௛ ௧௠௢௡ݏ݀݋݅ݎ݈ܽܲ݁ݐ݋ܶ

100 כ ൨

Violations = 1 if ฬ ∑ ஺஼ா

௡ೞೌ೘೛೗೐ೞ ೔೙ భబష೘೔೙ೠ೟೐ೞฬ ൐ ܮଵ଴

ܮଵ଴ ൌ 1.65 כ ߳ଵ଴ඥሺെ10ܤ௜ሻሺെ10ܤ௦ሻ

L10 is a MW value that is calculated for each balancing authority and is a desired upper limit of ACE for 

the balancing area. ߳ଵ଴ is a constant derived from the targeted 10-minute frequency bound. The balancing 

authority should keep its 10-minute ACE below its L10 for at least 90% of all 10-minute intervals for the 

month. This equates to an allowance of 14.4 violated 10-minute intervals per day. 

While CPS1 strives to reduce energy imbalances that harm interconnection frequency, CPS2 strives to 

limit all energy imbalances. Both metrics are statistical with neither requiring perfect performance. Both 

apply to balancing areas, not to individual generators or loads. CPS1 addresses 1-minute imbalances 

while CPS2 addresses 10-minute imbalances. 

CPS1 and CPS2 are balancing area performance metrics. Each balancing authority will determine its own 

way to require regulating reserve so as to meet the requirements of CPS1 and CPS2. Usually, the 

requirement is based on system peak or hourly load, time of day, weekday or weekend, and season. It may 

be that at different times, systems have more difficulty staying in compliance with CPS1 and CPS2 than 

other times. 

Provider: NERC does not have any requirement as to what technologies are allowed to supply regulating 

reserve. They must be able to be controlled by AGC. While generators have been the traditional suppliers 

of regulating reserve, loads are beginning to enter this market. New storage devices (e.g., flywheels and 
34 

batteries) are also starting to supply regulating reserve. In fact, the AGC term itself is now misleading 

and might be replaced with ARC (Automatic Resource Control), as proposed in a draft of NERC standard 

BAL-001-1 [32]. 

When deployed: Regulating reserve is required to be continuously controlled by AGC from the balancing 

authority. According to requirement R8 of NERC standard BAL-005, the control signal must be refreshed 

no less frequently than every 6 seconds. Each balancing authority will create its AGC signal as some 

function of the ACE so that high ACE values will direct downward regulating reserve movements and low 

ACE values will direct upward regulating reserve movements. The goal would be to comply with CPS1 and 

CPS2. 

As seen in ACE equation above, the frequency bias setting is a major component. NERC discusses how 

this is set based on NERC standard BAL-003. Requirement R2 of the standard states that the bias setting 

be as close as possible to or greater than the balancing authority’s actual frequency response. This number 

may either be a fixed value based on average frequency response or variable (either linear or non-linear) 

and should be calculated by reviewing historic response characteristics. Requirement R3 of NERC 

standard BAL-003 then states that balancing authorities shall operate their AGC based on tie-line 

frequency bias control as discussed in section 2.1. Lastly, requirement R5 states that the balancing 

authority’s frequency bias setting should be at least as great as 1% of its yearly peak demand per 0.1-Hz 

frequency change or 1% of its maximum generation for the year if the balancing authority is a generationonly balancing authority. Table II shows examples of some area’s frequency bias settings for different 

size systems and is taken from [33]. 

Table II: Balancing Authority frequency bias settings 

Balancing Authority Frequency Bias Setting Estimated Peak Demand Percent Bias/Peak 

New York ISO -334 MW/0.1Hz 33,441 MW 1% 

Midwest ISO -1038.6 MW/0.1Hz 103,864 MW 1% 

Omaha Public Power -25.5 MW/0.1Hz 2,546 MW 1% 

Public Service Company of 

New Mexico

-35.7 MW/0.1Hz 2,625 MW 1.36% 

Electric Reliability Council 

of Texas 

-667 MW/0.1Hz 63,783 MW 1.05% 

Lincoln Electric System -7.8 MW/0.1Hz 776 MW 1.01% 

Looking throughout all of the balancing authorities in NERC, many are exactly 1%, which mean they 

may be based on requirement R5 rather than matching their frequency response characteristic as closely 

as possible (requirement R3). 

How deployed: Regulating reserve is continuously deployed through AGC to correct ACE. No further 

directions are given from NERC. Each generating type would use its own strategy based on its 

technology. It must, however, be automatic. 

Proposed changes: A proposed NERC standard BAL-007, “balance of resources and demand” along 

with proposed standards BAL-008, BAL-009, BAL-010, and BAL-011 would replace the CPS1 and 

CPS2 [34][35]. In particular, the CPS1 will be replaced by an identical measure Control Performance 

Measurement (CPM). The CPS2 would be replaced with a new Balancing Authority ACE Limit (BAAL) 

requirement. The motivation behind the standard is an argument which says that during some instances, it 
35 

is possible to impact interconnection frequency and yet still remain compliant under the current CPS2 

standard. Balancing authorities could remain under their L10 values for excessive periods of time and be 

compliant while continuing to adversely impact the system frequency. The BAAL would be a frequency 

dependent limit. The limit would be unbounded when frequency is at its nominal level, but become more 

restrictive as frequency deviates from the nominal level. The calculations of the BAAL will be based on 

the frequency relay limits, the highest setting of under frequency load shedding in the interconnection. 

The BAAL will then be dependent on the interconnection frequency – the higher the frequency deviation, 

the stricter the BAAL will be. 

To be compliant, the ACE could not exceed the BAAL for a time greater than the BAAL Tv (currently set 

at 30-clock-minutes). Figure 21 shows an example of how the BAAL would be set in terms of multiples 

of the frequency bias. The equation for how the BAAL is calculated for high and low limits is shown in 

the equations below. This shows that for small frequency deviations, the BAAL is essentially limitless, 

and at the frequency trigger limit, the BAAL is set at 10B*(FTL – Fs), where Fs is the scheduled 

frequency. The FTL is established for an interconnection and is defined as the frequency that is one single 

contingency margin above or below the lower and upper Frequency Abnormal Limit (FAL), respectively. 

The FAL is defined as that higher or lower frequency where any frequency above or below, respectively, 

leaves an interconnection with unacceptable risk as determined by the sum of MWs for the number of 

allowable contingencies in the interconnection. It is unclear as to how this will affect the amount of 

regulating reserve that a balancing authority would procure, but it will likely affect how and when they 

will be deployed to be in compliance with the new standard. 

Proposed NERC standard BAL-008 and BAL-009 guide how reliability coordinators are to direct 

balancing authorities to help restore frequency when it exceeds frequency limits (especially if it exceeds 

the FTL for over 5 minutes). BAL-010 is very similar to BAL-003 on how frequency bias setting is 

calculated, but with additional details and procedural changes. Lastly, BAL-011 describes how the FTL, 

FAL, and Frequency Relay Limits (FRL) are calculated and determined for each interconnection. 

ܮܣܣܤ௢௟௪ ൌ ሺെ10ܤ כ ሺܨܶܮ௢௟௪ െ 60ሻሻ כ

60 െ ௪௟௢ܮܶܨ

60 െ஺ ܨ

כ ሻሻ60 െ௛௜௚௛ ܮܶܨሺ כ ܤ10ሺെ ൌ௛௜௚௛ ܮܣܣܤ

60 െ௛௜௚௛ ܮܶܨ

60 െ஺ ܨ
36 

Figure 21: New frequency dependent BAAL requirement. 

3.1.2 Following Reserves 

NERC gives no standard or direction on Following Reserve. 

3.1.3 Contingency Reserves 

Terminology: NERC uses the term contingency reserve in its standards and documents. It also uses both 

spinning reserve and non-spinning reserve as different types of contingency reserve. 

Required Amount: NERC standard BAL-002, the Disturbance Control Standard (DCS) requirement R3 

states that “as a minimum, the balancing authority or reserve sharing group shall carry at least enough 

contingency reserve to cover the most severe single contingency.” The same requirement also states that 

the balancing authority or reserve sharing group shall review the probable contingencies to determine the 

most severe contingencies at least once a year. 

Provider: NERC standard BAL-002 requirement R4 requires that the ACE be returned to zero (or to its predisturbance level if its pre-disturbance level is originally negative) within 15 minutes as shown in Figure 22 

and Figure 23. This drives the speed of response of resources that can provide contingency reserve. 

Requirement R1 of the same standard states that contingency reserve may be supplied from generation, 

controllable load resources, or coordinated adjustments to interchange schedules. NERC also defines both 

spinning reserve and non-spinning reserve to both be used to return ACE to zero during disturbances (or 
37 

return ACE to a pre-disturbance level if its pre-disturbance level is originally negative). Spinning reserve is 

defined as unloaded generation that is synchronized and ready to serve additional demand. Non-spinning 

reserve is generating reserve not connected to the system, but capable of serving demand within a specified 

time, or interruptible load that can be removed from the system in a specified time. 

Figure 22: Example of DCS when pre-disturbance ACE is positive. 

Figure 23: Example of DCS when pre-disturbance ACE is negative. 

When deployed: Contingency reserves are deployed following a reportable disturbance. A reportable 

disturbance is defined by NERC in standard BAL-002, measure M1, as contingencies that are greater than 

or equal to 80% of the most severe single contingency in the balancing area. This number may be reduced 

by a regional entity, but it must be ensured that normal operating characteristics are excluded. It is 

important that all reportable disturbances are only characterized by sudden, unanticipated losses of 

supply-side resources. 

How deployed: Contingency reserves are deployed by set points that are increased as directed by the 

balancing authority to make up the lost energy and return ACE to zero and frequency to its scheduled setting. 

The response can come from resources with AGC, online resources responding manually to the balancing 

authority’s direction, and non-spinning reserve so that it can assist within the 15-minute DCS window. 
38 

Proposed changes: The proposed standards of BAL-007 through BAL-011 that are discussed in section 

3.1.1 will also replace the DCS requirement. These reliability based requirements are supposed to give 

guidance on load balancing during both normal and abnormal events. Hence, the requirement for ACE 

deviations will depend on frequency deviation of the entire interconnection, and not on the size of the 

balancing area specific event that caused the ACE deviation (e.g., no distinguishing between normal vs. 

disturbance conditions). However, as it currently stands, proposed standard BAL-007 does not have any 

information on the required amount as is currently stated in BAL-002 requirement R3. 

3.1.4 Ramping Reserves 

NERC gives no standard or direction on Ramping Reserve. However, in a recent notice of proposed 

rulemaking, FERC asked for comments from industry stakeholders on the steps needed to resolve the 

confusion regarding the use of contingency reserves to manage extreme VG ramp events [36]. It is likely 

that this may lead to more specific rules and policies on how reserves should be used for ramp events. 

3.1.5 Primary Reserves 

Terminology: Although, there is no term used in the NERC standards, the term often used in North 

America is frequency responsive reserves. 

Required Amount: NERC does not require a quantifiable amount for frequency responsive reserve. As 

stated in section 3.1.1, BAL-003 states the frequency bias setting to be 1% of the balancing area’s peak 

demand, and that the balancing area’s frequency bias be as close to possible or greater than its actual 

frequency response. However, this requirement is for frequency bias as part of the ACE equation, and 

therefore, it does not pertain to the actual frequency response of a balancing area. 

Provider: Both generation and load that autonomously respond to changes in frequency. 

When deployed: Deployed during frequency changes usually outside a frequency dead band. 

How deployed: Frequency responsive reserve is automatically deployed when frequency changes from 

the nominal level (i.e. 60 Hz). Most North American governors use a 5% droop response and a 36-mHz 

dead band where a deviation below which it is not responsive. The droop or dead band is not seen in any 

NERC standard, however. 

Proposed changes: In FERC Order 693, FERC ordered NERC to revise its BAL-003 standard so that it 

“defines the necessary amount of Frequency Response needed for Reliable Operation for each Balancing 

Authority with methods of obtaining and measuring that the frequency response is achieved.” NERC is 

pursuing a frequency response initiative that is looking at what types of requirements are needed. Some 

analysis has shown that at least in the Eastern Interconnection, the amount of frequency response has been 

slowly declining in recent years [37]. This is a large reason for this initiative. 

3.1.6 Secondary Reserves 

Terminology: NERC uses the term spinning reserve or non-spinning reserve to refer to the Secondary 

Reserve used under Contingency Reserve. See section 3.1.3 for information regarding NERC’s 

requirements. There is no term for Secondary Reserves used under Ramping Reserve. 
39 

3.1.7 Tertiary Reserves 

Terminology: NERC uses the term supplemental reserve or operating reserve – supplemental to refer to 

the Tertiary Reserve used under Contingency Reserve. There is no term for Tertiary Reserves used under 

Ramping Reserve.

Required Amount: No quantifiable requirement for supplemental reserve is given by NERC. 

Provider: No details are given on who is able to provide supplemental reserve. 

When deployed: Supplemental reserve as discussed by NERC is described as reserve that can replace 

contingency reserve. Therefore, the supplemental reserve would be deployed soon after contingency 

events. In requirement R6 of NERC standard BAL-002 (DCS), it states that the contingency reserve 

should be restored 90 minutes following the start of the restoration period. The start of the restoration 

period is defined as the end of the disturbance recovery period, which as discussed in requirement R4 of 

the same standard and in section 3.3.3 of this document is 15 minutes following the disturbance event. 

Therefore, all contingency reserves must be restored and replaced90 minutes after the contingency should 

be recovered, and 105 minutes following the actual disturbance. 

How deployed: The supplemental reserve is deployed as directed by the balancing authority. In most cases, 

these are resources that are off-line and must start up in time to help restore the contingency reserve. 

Proposed changes: There are no known changes to the current standards around supplemental reserve. 

 
40 

3.2 Key North American Regional Differences 

The regional systems inside North America will generally follow the NERC standards. However, in some 

cases, there are region-specific differences that are worth discussing. Since NERC rules apply to the 

whole continent, these differences should be at least as strict as NERC standards. Requirements follow a 

hierarchical scheme with NERC requirements overarching followed by regional reliability organizations 

as seen in Figure 18 followed lastly by the individual balancing authority requirements. Although, 

impossible to capture all important differences given the amount of different entities in North America, a 

number of key cases were identified and described that were of importance. The section will only present 

unique cases that are not identical to rules from NERC in reference to the different operating reserve 

types and future proposals specific to those regions. 

3.2.1 Regulating Reserves 

Requirement Definitions: Many different areas have their own ways of determining their regulating 

reserve. These are all based on the balancing authority’s way of meeting its CPS1 and CPS2 

requirements. Table III shows a few examples of areas and how they determine their requirements. Note 

that many of the requirements are based on ramp rate requirements. Many of the ISOs that run 5-minute 

dispatch intervals require that the full available regulating reserve requirement be available within five 

minutes. Others may be fifteen minutes. 

Table III: Regulating reserve requirement definition from various North American balancing 

authorities 

Region Requirement Definition 

PJM Based on 1% of the peak load during peak hours 

and 1% of the valley peak during off-peak hours. 

NYISO Set requirement based on weekday/weekend, hour 

of day, and season. 

ERCOT Based on 98.8th percentile of regulation reserve 

utilized in previous 30 days and same month of 

previous year and adjusted by installed wind 

penetrations (described further below) 

CAISO Use a requirement floor of 350-MW up and down 

regulating reserves which can be adjusted based 

on load forecast, must-run instructions, previous 

CPS performance, and interchange and generation 

schedule changes. 

MISO Requirement made once a day based on conditions 

and before the day-ahead market closes. 

ISO-NE Based on month, hour of day, weekday/sat/sun. 

Combined Up and Down vs. Separate: Some regions within NERC combine their upward and 

downward regulating reserve while others have separated requirements. Combined requirements imply 

that the upward and downward requirements must be equal and any resource providing upward regulating 

reserve must be able to provide the same amount of downward regulating reserve. Regions with separate 

services can have different requirements and can have different resources providing different amounts of 

upward and downward regulating reserve. 
41 

Table IV: Combined vs. separate regulating reserve

Region Requirement Definition 

PJM Combined 

NYISO Combined 

ERCOT Separate 

CAISO Separate 

MISO Combined 

ISO-NE Combined 

ERCOT: ERCOT’s requirement for regulation service is a bit different than others. First, the 98.8 

percentile is calculated for the up and down regulation service that had been deployed during the past 30 

days and the same month of the prior year. This is done on an hourly basis. ERCOT will then calculate 

the increased amount of wind capacity compared to the previous months and use look up tables to add 

increased amounts of regulation based on a study performed for the region [38]. 

Table V shows the additional up-regulation for 1000-MW bins of additional wind capacity. If during the 

course of the last 30 days prior to the study period, the average CPS1 score was less than the 100% target, 

an additional 10% of regulation reserve will be procured during those hours where it was less. If the CPS1 

score was less than 90%, an additional 20% of regulation service will be added. Also, for hours 0600 and 

2200, ERCOT may increase the amounts further since these two hours are very ramp-constrained. 

Table V: Additional up-regulation per 1000 MW of incremental wind generation capacity in 

ERCOT 

Incremental MW Adjustment to Prior-Year Up-Regulation 98.8 Percentile Deployment Value, per

1000 MW of Incremental Wind Generation Capacity, to Account for Wind Capacity Growth

Month

Hour Ending

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Jan. 2.8 4.2 3.1 3.7 2.5 0.4 2.3 2.2 4.2 5.9 7.6 5.7 4.7 3.3 2.8 2.3 4.0 8.6 4.2 2.7 1.6 2.7 1.4 1.6

Feb. 3.6 4.0 2.9 2.9 1.5 1.8 5.2 3.5 4.9 6.0 5.1 5.2 5.3 4.2 4.3 3.5 3.8 8.6 5.5 1.9 1.4 3.1 1.9 2.2

Mar. 5.5 5.3 4.6 4.2 2.6 3.3 7.1 7.9 6.8 5.7 4.2 3.4 2.8 2.6 2.7 2.3 2.9 7.7 6.8 2.1 1.1 3.0 1.5 2.8

Apr. 3.1 3.6 5.0 4.0 2.4 2.5 8.5 11.6 10.0 5.6 4.2 3.4 3.2 2.5 2.1 2.1 3.5 9.2 8.2 4.1 1.0 0.8 0.0 1.4

May 3.6 3.3 4.3 4.3 4.2 3.3 8.7 8.8 8.1 5.7 6.0 4.4 3.6 3.8 3.9 4.2 4.7 11.6 5.9 0.6 0.0 1.0 1.4 2.5

Jun. 2.3 2.6 3.3 3.7 3.9 2.4 8.5 8.2 6.6 4.5 4.2 3.1 2.5 2.5 0.7 0.2 1.3 7.5 3.3 1.7 0.7 0.3 0.6 1.3

Jul. 1.0 2.8 4.4 3.7 3.0 3.2 11.2 10.2 6.5 5.3 3.3 2.2 1.4 0.4 -0.9 -1.3 0.3 3.4 0.9 1.1 0.1 0.0 1.0 1.2

Aug. 1.4 3.8 4.5 4.5 2.2 0.9 6.3 6.8 6.6 6.6 3.2 2.6 2.1 1.2 1.4 1.3 1.3 4.6 1.2 0.9 0.7 0.8 1.1 1.3

Sep. 3.2 4.0 3.7 3.5 1.8 1.9 6.9 7.7 8.3 6.9 3.5 4.8 3.8 2.3 1.6 1.2 3.0 9.2 3.1 0.9 0.1 0.4 0.8 1.9

Oct. 3.4 2.8 2.4 2.2 1.7 1.8 5.0 5.8 6.1 5.9 4.0 5.4 3.2 2.2 1.2 1.7 3.1 6.8 0.8 2.1 0.0 0.2 1.8 2.5

Nov. 2.7 3.2 3.6 3.0 2.2 2.3 4.6 5.3 6.9 6.8 5.1 5.6 4.1 3.7 1.8 1.7 5.8 12.8 4.8 3.8 1.0 1.6 2.2 1.4

Dec. 2.8 2.4 1.4 2.1 1.2 0.4 2.8 2.7 3.8 4.6 6.8 7.0 6.0 4.4 3.3 3.0 5.0 9.9 4.3 2.6 2.1 4.3 2.0 1.5
42 

Storage Resources Providing Regulating Reserve: Recently, the New York Independent System 

Operator/NYISO and Midwest Independent System Operator/MISO have also allowed certain storage 

resources (e.g., limited energy storage resources, or LESR) to provide regulating reserve. This required 

an initial rule change, accepted by FERC, to allow for continuous operation of regulating reserve for 15 

minutes rather than sustained for one hour. The Energy Management System was enhanced so that when 

the LESR was low on energy, the dispatch would give it a negative energy schedule with therefore less 

regulating range so that it could store more energy [39]. An example is shown below in Figure 24. 

Usually, the energy schedule of the LESR would be at 0 MW, so that it can equally provide up and down 

regulation to its maximum levels (20-MW charging, 20-MW discharging for a 20-MW device). However, 

if it has been generating more than it has been charging and is low on the amount of energy stored, the 

dispatch schedule may give it a negative energy schedule as shown in the right example. This allows it to 

charge more so that it can eventually be brought back to operate at its optimal position. For example, if it 

has an energy schedule of -5 MW, and it is a 20-MW device, it can regulate between -20 and 10 MW and 

should consume 5 MW on average. This way, it can store more energy and allow it to eventually be used 

again at its most optimal point, 0 MW. 

Figure 24: Example of a limited energy storage resource providing regulating reserve during 

normal (left) and during low storage (right) conditions. 

In NYISO, the LESR are also deployed first whenever ACE requires regulation services. They are 

deployed up to their full amounts of regulation based on the need derived from the system ACE. The 

residual ACE recovery not covered by the LESR will be distributed among the other regulation resources 

in proportion to the amounts they were scheduled to provide. 

Sub-Hourly vs. Hourly: In the definitions that we have used for Regulating Reserve in section 2.1, one 

of the ways we have separated it from load following is that it is faster than the shortest energy market 

clearing interval or economic dispatch interval. This is true in North America. The market intervals set a 

dispatch level for the resources based on economics, and then the regulating reserve resources are further 

adjusted automatically between one interval and the next to balance supply and demand while considering 

for random variations or the forecast error that may have occurred. This is important in that many areas 

within North America have different market interval lengths. All of the organized markets have 5-minute 

intervals, whereas some regulated utility areas without markets use regulating reserve to account for 

deviations from hourly generation and load schedules. Therefore, they have different requirements for 

0 MW

Reg up capacity

Min = -20 MW

Max = 10 

Energy MW

Schedule 

= 0 MW

Max = 20 MW

Min = -20 MW
43 

what resources will need to be connected with AGC. Areas with hourly scheduling will usually keep all 

non-regulating resources fixed for the hour, allowing for a ramp to the next hour scheduling at 10 minutes 

before and after the top of the hour. Therefore, the same system with hourly scheduling will require more 

regulating reserves than if it had 5 or 15-minute economic dispatch intervals. An example of how the 

different scheduling procedures appear and how the regulating reserve gets deployed is shown in Figure 

25 and Figure 26. 

Figure 25: 5-minute scheduling vs. hourly scheduling. 

28000

29000

30000

31000

32000

33000

34000

35000

36000

37000

2:58 PM 3:27 PM 3:56 PM 4:24 PM 4:53 PM 5:22 PM 5:51 PM 6:20 PM 6:48 PM

ACTUAL

hourly scheduling

5 minute schedluling
44 

Figure 26: Regulating reserve needs for 5-minute scheduling vs. hourly scheduling. 

Alberta Electric System Operator: In the Alberta Electric System Operator [40], there is a requirement 

for regulating reserve resources to have a delay to the AGC signal that is no longer than 28 seconds 

during normal conditions and 40 seconds during short-ramp control signals – AGC signals that reverse 

from a raise to a lower signal or vice versa. They also require a minimum of 15 MW of reserve to be 

provided by an individual unit, as well as a (MW/minute) ramp rate of 1/10 times the maximum 

regulation range (MW) the resource is qualified to provide. AESO also requires regulating reserve 

resources to be equipped with operating speed governors. 

Demand response: Responsive load is beginning to provide Regulation Reserve. Alcoa’s aluminum 

smelter in Warrick, Indiana, provides regulation service to MISO by participating in MISO’s ancillary 

service markets. Response is fast and accurate [41]. Loads are expected to begin providing regulation to 

the NYISO in the near future [42]. 

Ace Diversity Interchange: Northern Tier Transmission Group, a group of transmission providers and 

customers cooperating to improve operations of the grid has implemented the ACE Diversity Interchange 

(ADI) program [43]. Based on the principle of load diversity, some balancing areas experience a surplus of 

generation at the same time that others have a deficit. The ADI pools the regulation reserve signal from 

participating BAs, and performs a simple netting of signals before sending out revised control signals to 

participating AGC generating units. The result is that overall regulation reserve needs are pooled, resulting 

in less needed response. Initial field trials have, at the time of this writing, been limited to a maximum of 25 

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2500

2:58 PM 3:27 PM 3:56 PM 4:24 PM 4:53 PM 5:22 PM 5:51 PM 6:20 PM 6:48 PM

hourly regulation

5 minute regulation
45 

MW of reduced regulation to ensure that ADI does not cause any un-foreseen reliability issues. The ADI 

was suspended during field trials of BAAL, but has recently been restored. The impact of the ADI is to 

reduce overall regulation, and thus, regulating reserve, from the participating utilities. 

3.2.2 Following Reserve 

ERCOT: In the ERCOT system [44], non-spinning reserve service seems to closely align with our 

definition of Following Reserve. The non-spinning reserve requirement is calculated based on the 95th

percentile of the observed hourly net-load forecast error from the past 90 days. ERCOT will then subtract 

its regulation up requirements from this 95th percentile to determine the full requirement for non-spinning 

reserve. This essentially says that between the regulation up and non-spinning reserve, it can cover 95% 

of the net load forecast errors. The requirement also says it can be used for loss of generating units. The 

requirement for participation in providing this service is to be either on-line or off-line, with full response 

required within thirty minutes. 

3.2.3 Contingency Reserve 

Western Electricity Coordinating Council: The Western Electricity Coordinating Council (WECC) 

oversees operations and planning procedures performed in the Western Interconnection of North America 

[45]. It is the regional reliability organization that is responsible for ensuring reliability standards in this 

interconnection. As a NERC Reliability Region, WECC imposes an additional requirement that 

supplements the NERC contingency reserve requirement. The WECC rule requires an amount of 

contingency reserves equal to the greater of (1) the most severe single contingency, and (2) the amount 

equal to five percent of the total load served by hydro generation, and seven percent of the total load 

served by thermal generation in the balancing authority or reserve sharing group. A reserve sharing group 

(RSG) is a collection of balancing areas that collectively maintain, allocate, and supply contingency 

reserves required for each balancing authority’s use when recovering from a contingency event within the 

group. WECC also requires that at least half of the balancing area’s (or RSG’s) reserves must be spinning, 

which is defined as being automatically responsive to frequency deviations and being able to fully 

respond within 10 minutes. The rest of the contingency reserve may be met by off-line non-spinning 

reserve, interruptible load, or interchange transactions. All of this reserve must be able to fully respond 

within 10 minutes. 

WECC has proposed changing this rule to require the greater of (1) the most severe single contingency 

and (2) the amount equal to three percent of the net generation (generation minus station service power) 

and three percent of the total load being served in the balancing authority or reserve sharing group. 

Demand Response: Appropriately responsive load can provide any of the contingency reserves in all 

regions with the exception that WECC rules currently do not allow demand response to provide spinning 

reserve [46]. Technically, demand can provide better reliability response than generation since full 

response is usually achieved immediately by tripping the load. Loads can respond autonomously to 

frequency deviations with under-frequency relays set to operate in the generator governor range. Different 

loads can trip at different frequencies, providing a droop curve. Response speed is only limited by the 

communications when responding to system operator command, and this is typically much faster than the 

10 minutes allowed for full generator response. Demand response is typically a good match for 

contingency reserve requirements because the interruptions are typically shorter than those required for 

peak reduction, and response speed is no longer a major technical challenge [10]. 
46 

 

Both PJM and ERCOT limit the amount of contingency reserves which can be supplied by demand 

response. PJM currently limits demand to 25% of the total reserve requirement and states that there 

should be at most one level of operator intervention to drop load. ERCOT has loads acting as a resource 

(LAaR), which can provide contingency reserve either manually or by the triggering of under frequency 

relays (below 59.7 Hz) during emergency events. No more than 50% of the total Responsive Reserve 

Service can come from LAaR. LAaRs typically offer to supply more than their allotted 50% share and 

typically at a cost well below that of generation. 

Locational Requirements: Many of the regions in NERC, and especially those with large geographic 

and electrical size, will have locational requirements within their balancing authority. These requirements 

are based on transmission limitations. For instance, if a certain location of the balancing area is import 

constrained and a contingency occurs within the area, there may not be transmission capacity available for 

contingency reserve outside the area to help in the recovery. Therefore, many of these import-constrained 

areas will require that some portion of the contingency reserve be located within the constrained area. 

Some examples of areas that have these locational requirements for their Contingency Reserves are 

MISO, PJM, CAISO, NYISO, and ISO-New England. 

PJM: In PJM, zones are separated since there are multiple reliability regions within the PJM region [47]. 

Most of PJM is in the Reliability First Corporation, but the southern part is in the SERC Reliability 

Corporation. Therefore, these requirements will be different based on separate rules as well as when 

transmission is limited from one balancing area to the other. In PJM, the synchronized reserve 

requirement is separated into tier 1 synchronized reserve and tier 2 synchronized reserve. Tier 1 

synchronized reserves are defined as marginal units that would be part- loaded based on energy and 

includes demand response that can automatically curtail load. The VACAR synchronized reserve 

requirement within PJM actually bases its contingency reserve on 15 minutes of response time and is 

calculated by taking 1.5 times the largest unit in VACAR. However, the synchronized reserve in that area 

must respond within ten minutes. 

NYISO: The NYISO will also deploy 10-minute operating reserve when its ACE is less than -150 MW, 

rather than rules strictly on contingency events [39]. 

3.2.4 Ramping Reserve 

There are no known regional rules regarding Ramping Reserve. 

3.2.5 Primary Reserve 

WECC: As discussed in the contingency reserve requirement, at least half of the contingency reserve 

requirement of WECC must be spinning, which is specifically defined as being responsive to frequency 

[45]. WECC also discusses in its reliability criteria that governor droop shall be set at 5% and that 

governors shall not be blocked unless required by regulator mandates. In some recent proposals, a 

governor droop setting criterion has been developed, which suggests governor droop between 3% and 5% 

instead of strictly at 5%, and stricter rules requiring generator owners to operate with their governors in 

service [48]. 
47 

A frequency responsive reserve (FRR) procedure has been proposed in a WECC whitepaper [49]. This is 

also related to contingency reserve in that it describes the amount of contingency reserve that must be 

responsive to frequency. The proposal and white paper are strictly for loss-of-supply resource events, and 

not for loss-of-load events. The proposal argues that the quality of the current spinning reserve 

(Contingency Reserve) is only monitored by the DCS, as discussed in section 3.1.3. The proposal 

allocates an amount of FRR that is proportional to the size of the balancing authority system, and that is 

technically defensible for the need of FRR. The proposal suggests a FRR amount for all of WECC that is 

allocated to each balancing authority based on size and a characteristic of response to frequency as a 

percentage of the system on-line capacity per 0.1 Hz. This is the frequency response characteristic (FRC). 

The goal is that all balancing authorities will assist in arresting frequency decline no matter where the 

cause occurred, and that this will result in a more balanced response across the system. The method 

looked at how different units may contribute individually to different FRC and FRR requirements. What 

it also shows is that higher FRR requirements may result in more concentrated contributions from 

individuals, whereas higher FRC requirements would result in more distributed response. Therefore, 

careful selection of these requirements will be required to receive the desired system response 

requirement, as well as individual balancing area contribution to the system requirement. 

ERCOT: ERCOT protocols have more detail on the required response [50]. The combined response of all 

generating resources on the ERCOT system shall be at least 420 MW/0.1 Hz. ERCOT is the only 

balancing area that guides its minimum frequency response. The protocols also discuss the required 

primary frequency response from wind powered generation resources with standard generation 

interconnection agreements signed after January 1, 2010. The wind generation plants should have 

adjustable dead bands to match those of other conventional resources or that which is provided in the 

operating guides, and a similar droop to the other resources of 5%. It also says that wind generation 

resources with interconnection agreements signed on or before January 1, 2010, shall have primary 

frequency response capabilities by December 1, 2010, if ERCOT believes this is physically practical. 

ERCOT has also been working on requirements for inertial response in its interconnection [51]. An online tool was developed to estimate how much inertial frequency response is available in the balancing 

area during scheduling processes. Inertial frequency response is calculated by dividing the total MW loss 

during a disturbance by the frequency difference from the instant before the disturbance and frequency 

nadir (divided by ten to get in terms of MW/0.1Hz). The inertial frequency response estimator tool 

(IFRET) was introduced in February 2010 to estimate the inertial frequency response by observing the 

system load, total on-line conventional generation capacity, spinning reserves available, and ratio of wind 

generation to total generation. If the tool shows insufficient inertial frequency response, the system 

operator then has the ability to change the commitment of units. 

Hawaii: In the Hawaiian Electric Company [52], a 3-second quick load pick-up (QLPU) requirement is in 

place. This requirement states that sufficient generating capability must be available such that, upon the 

trip of any unit, the remaining units will have sufficient QLPU to restore system frequency to 58.5 Hz 

within 3 seconds. 

Hydro Quebec: Hydro Quebec is a single balancing area synchronous interconnection in the province of 

Quebec, Canada. Hydro Quebec has passed recent standards that apply specifically to wind power plants 

[53]. The requirement is for all wind power plants larger than 10 MW to be equipped with a frequency 
48 

control equipment to provide emulated inertial response. The requirement does not apply to steady-state 

frequency control (i.e., governor control). The requirement states the entire wind plant to have an inertia 

constant similar to that of a conventional synchronous generator, of 3.5s. The original requirements also 

stated the wind plant must give an increase of power of 5% above its current output during underfrequency, for duration of 10 seconds. Subsequently, Hydro Quebec ran some simulations to understand 

what parameters the wind plant must attain in order to get similar frequency response to a system with all 

synchronous generators [54]. The study assumed two different types of control, a step function, where the 

response would come immediately, and a proportional function where the response would come slower. 

The results are shown below in Table VI. 

Table VI: Hydro Quebec parameters for wind power plants providing emulated inertial 

response 

Parameters Parameter Description Proportional Function Step Function 

Deadband The frequency deviation at 

which the emulated inertia 

response will activate. 

0.3 Hz 0.5 Hz 

Active power contribution The minimum amount of 

energy above the current 

power output the plant 

must produce. 

6% 6% 

Duration of the active 

power contribution 

The minimum time at 

which the plant must 

sustain its active power 

contribution before going 

into recovery phase. 

10 seconds 10 seconds 

Activation time The maximum time after 

the event occurs before the 

response is given. 

1 second 1 second 

Transition time The minimum time at 

which the active power 

contribution goes into a 

recovery phase in order to 

recover the energy and 

bring turbine speed back to 

its initial speed. 

3.5 seconds 3.5 seconds 

Maximum generation 

reduction during recovery 

phase 

The maximum amount of 

power reduction when the 

plant goes into recovery 

phase. 

20% 20% 
49 

3.2.6 Secondary Reserves 

See Section 3.2.3 and Section 3.1.4. 

3.2.7 Tertiary Reserves 

WECC: WECC requires that reserves shall be restored no later than 60 minutes following a disturbance 

event [45]. 

NPCC: The Northeast Power Coordinating Council (NPCC) has more stringent rules than NERC for 

Tertiary Reserves of Contingency Reserves [55]. In its “Operating Reserve Criteria,” NPCC states that its 

30-minute operating reserve shall at least equal one-half its second highest contingency loss. However, 

the same standard says that the 10-minute reserve (Contingency Reserve) shall have the same recovery 

restoration as the requirement of NERC’s DCS, 105 minutes following a disturbance. The 30-minute 

reserve can be synchronized or offline but available within 30 minutes. 

NYISO: The New York State Reliability Council (NYSRC) [56], which oversees reliability criteria of 

NYISO, which is also within the NPCC, directly states in its reliability manual that its 10-minute reserves 

(Contingency Reserve) shall be restored within 30 minutes following a disturbance. The criteria also 

states that NYISO shall have sufficient 30-minute operating reserve equal to one-half of the 10-minute 

operating reserve, which is based on the most severe contingency, and therefore, more strict than the 

NPCC requirement of one-half its second highest contingency loss. 
50 

3.3 Europe: ENTSO-E (UCTE) 

The European Network of Transmission System Operators for Electricity (ENTSO-E) was fully 

functional in July 2009 and coordinates security, adequacy, markets, and sustainability for the 42 

transmission system operators (TSO) in Europe. The regional groups are based on the synchronous 

interconnections and they are shown below in Figure 27. Its vision is to remain the focal point for all 

European technical policy issues related to the TSOs. Therefore, many of the reliability standards that 

guide the use of operating reserves in European TSOs are maintained within the ENTSO-E. In this 

section, we will focus on the policies that were set forth for the prior organization of the Union for 

Coordination of Transmission of Electricity (UCTE), which is the major portion of the ENTSO-E and 

represents the Continental European Interconnection [57]. UCTE was the predecessor of ENTSO-E, 

specifically, for the TSOs of that interconnection. 

Figure 27: Countries and Interconnections under the ENTSO-E. 

3.3.1 Regulating Reserves 

Terminology: The term secondary control reserve is used for control of ACE. This same term is used for 

control of normal conditions and disturbance conditions, and therefore, the same term is described herein 
51 

with both Regulating Reserve and Contingency Reserve, and is separated where appropriate based on its 

application. 

Required Amount: Secondary control reserve is held by control areas to balance normal deviations of 

frequency and interchange schedules that occur based on load and generation changes. The requirements 

can either be based on empirical analysis or by probabilistic methods. The empirical method determines a 

minimum requirement for “noise signals” and is calculated for each control area with the following 

formula: 

ܴ ൌ ඥܽܮכ௔௠௫ ൅ ܾଶ െ ܾ

a is currently set at 10 MW and b at 150 MW. The Lmax is defined as the hourly maximum of the load of 

the day. The technique is called the “control capability for variations.” 

There is a second recommended requirement for sizing of secondary control reserve, known as the 

“probability for reserve deficits” method. This is a probabilistic sizing approach which directs the 

requirement to enable the control of the ACE to zero in some percentage of all hours during the year. The 

UCTE also recommends how ACE should be corrected by secondary control reserve. ACE is calculated 

similarly to how it is in North America. 

ܧܥܣ ൌ ܲ௖௔௟௖ െ ܲ௦௖௛௘ௗ ൅ ܭሺܨ ௔െ ܨ௦ሻ

K is equivalent to B in the NERC ACE equation, i.e., the frequency bias constant. The UCTE policy 

recommends K be calculated as the product of the contribution coefficient ci of the area and the overall 

network power frequency characteristic. The overall network power frequency characteristic is the total 

amount of frequency response including load response and the contribution coefficient is the share of 

frequency response for the balancing area based on the control area’s share of total generation in the 

interconnection for the year. Also, UCTE recommends following ACE with PI (proportional integral) 

type control, as can be seen in the following equation: 

ܲ௖௢௡௧௥௢௟ ൌ െߚ כ ܧܥܣ െ

1

ܶ௡

ݐ݀ כ ܧܥܣ න

where β is the proportional factor and Tn is the integration time constant. There is no recommendation on 

values for these constants. However, the policy discusses typical values ranging from 0 to 0.50 for β and 

from 50 to 200 seconds for Tn

There is no formal compliance measure set forth by the UCTE. However, during committee sessions, the 

TSOs will present their ACE performance for certain time periods, and areas with bad performance will 

be pressured into either procuring more secondary control reserve or improving performance by some 

other means. 

Provider: The UCTE does not recommend anything for what specific technologies are supposed to 

provide secondary control reserve. It also does not recommend the ramping capability required. It does 

however require that 66% of the secondary control reserve used for a control area be geographically 

located within that control area. 
52 

When deployed: UCTE recommends that secondary control reserve must start its control action at most 

30 seconds after the control direction was given. The cycle time is recommended to be between 1 and 5 

seconds. 

How deployed: Secondary control reserve is under automatic control. The UCTE describes the 

organization of control that each control area should follow. There are three different schemes that it 

defines. Centralized control is defined by control that is performed centrally by only one control area in 

the designated control block. Pluralistic control is a decentralized control scheme that has all control areas 

in a block regulate their own control area on their own. Hierarchical control has one control area operate 

the control block, and then the subordinate control areas will regulate their areas based on the control 

given from the directing control area. 

Proposed changes: There are no known proposed changes to the secondary control reserve requirement 

for the UCTE. 

3.3.2 Following Reserves 

A form of Tertiary control reserve labeled as schedule-activated tertiary control reserve is activated with 

relation to the predefined time frame of the energy schedule or energy market intervals. The reserve 

would then be used for slower normal variations that occur in a control area to minimize ACE. 

Requirements for this specific purpose are not defined in any detail, however. 

3.3.3 Contingency Reserves 

Terminology: Contingency Reserves in Europe are distributed among three different terms. These are 

defined as primary control reserve, secondary control reserve, and tertiary control reserve. Each is faster 

responding than the next, and the slower reserve is supposed to replace the faster reserve as shown in 

Figure 28. 

Figure 28: Role of different types of Contingency Reserve in the UCTE region. 
53 

The definitions of each of these reserve types are stated below: 

Primary Control Reserve: Local automatic control based on frequency deviations that immediately 

respond to oppose the frequency deviation, and is shared by all control areas in the interconnection where 

the deviation occurs. (Also see section 3.3.5 for further information). 

Secondary Control Reserve: Centralized automatic control that responds immediately, but from direction 

of the control center to oppose area control error, which consists of frequency deviation and interchange 

error. The obligation to provide secondary control reserve lies with the control area where the loss of 

supply occurred. (Also see section 3.3.1 for the separate use of this reserve type and section 3.3.6 for 

further information). 

Tertiary Control Reserve: Manual control that is used to either replace the secondary control reserve or 

complement it in the case that the secondary control reserve is not sufficient for purposes of restoring 

frequency and interchange schedule deviations on its own following a disturbance. (Also see section 3.3.6 

for further information). 

Required Amount: In UCTE, there are specific requirements for both primary control reserves, 

secondary control reserves, and tertiary control reserves. We discuss the requirements for primary 

control reserve in the Primary Reserve section. Secondary control reserve is used for normal random 

variations as well as to bring frequency back to nominal level and ACE to zero during large disturbances. 

Tertiary control reserve is used to replace the secondary control reserve so that the secondary control 

reserve can be ready for a second disturbance. However, tertiary control reserve is also available to 

supplement the secondary control reserve during larger disturbances where secondary control reserve 

cannot alone balance the disturbance. 

Provider: UCTE policies provide no requirement on what resource type is allowed to provide these 

reserves. It does require that a fixed share of 50% of the total needed secondary control reserve and 

tertiary control reserve be kept inside the control area. 

When deployed: Primary control reserve is deployed almost immediately following the disturbance. 

Secondary control reserve is deployed through AGC soon afterward. Once the secondary control reserve 

is deployed, the primary control reserve can be released. Tertiary control reserve is then deployed later to 

replace the secondary control reserve. This is depicted in Figure 29. During disturbances the ACE should 

be recovered within fifteen minutes. 
54 

Figure 29: Time line for primary, secondary, and tertiary control reserve following contingency event. 

How deployed: Primary control reserve is deployed automatically, responding to frequency deviations 

through governor systems. Secondary control reserve is deployed through AGC signals that are from the 

control center. Tertiary control reserve is deployed with manual changes to set points either from 

notification from the system operator or through schedule changes. 

Proposed changes: There are no known proposed changes to any of the Contingency Reserves

requirements for the UCTE. 

3.3.4 Ramping Reserves 

There is no requirement with UCTE on the reserve type corresponding to Ramping Reserve. 

3.3.5 Primary Reserves 

Terminology: The UCTE uses the term primary control reserve. 

Required Amount: In the UCTE, primary control reserve is used immediately following disturbances to 

stabilize the system frequency at a stationary value within a few seconds. The total required primary 

control reserve for all of UCTE is 3,000 MW. This value is calculated based on what the UCTE considers 

the maximum instantaneous power deviation in the synchronous system, which is 3,000 MW. Each 

control area must provide a share of this reserve as described by contribution coefficients that are 

determined each year as shown in the equation below. The contribution coefficients (ci) are based on the 

control area’s share of total energy generated within one year in proportion to the total energy generated 

in the interconnection. Therefore, the sum of all contribution coefficients would be equal to one. 

3000 כ ௜ܿ ൌ௜ ݁ݒݎ݁ݏ݈ܴ݁݋ݎݐ݊݋ܥݕݎ݅݉ܽݎܲ

The reserve amount given to the interconnection and to each control area must be fully activated when a 

frequency deviation occurs of greater than ± 200 mHz. Therefore, the minimum network power frequency 

characteristic of primary control is 3,000 MW divided by 200 mHz or 15,000 MW/Hz (1,500 

MW/0.1Hz). The average network power frequency characteristic of primary control ends up being larger 

at 19,500 MW/Hz (1,950 MW/0.1Hz). This response includes only the response of primary control 
55 

reserve from generators and not the self regulating affect of load. The overall network power frequency 

characteristic, which includes load response to frequency and some surplus-control of generation, is 

higher than 19,500 MW/Hz. 

The UCTE policy also states the minimum total frequency deviation (frequency nadir) is 0.8 Hz. This 

includes a safety margin of 200 mHz above the highest under-frequency relay setting. This safety margin 

is maintained due to controller insensitivity, a possible stationary frequency of 50 mHz below nominal, 

and larger dynamic frequency deviation at the site of the incident not in the model. 

Provider: The UCTE policy gives no reference as to who can provide primary control reserve. A control 

area is allowed to increase its primary control reserve by 30% up to 90 MW by offering to cover part of 

the obligations of other control areas. 

When deployed: Primary control reserve is activated a few seconds following a disturbance event and 

must be delivered until the power deviation is fully offset by the secondary and tertiary control reserve. 

The UCTE recommends a dead band (insensitivity) of no more than 10 mHz. For instances that are less 

than 50% of the maximum disturbance considered, 1,500 MW, primary reserve must be fully deployed 

within 15 seconds. For the full disturbance of 3,000 MW, primary control reserve must fully respond 

within 30 seconds. For disturbances greater than 1,500 MW but less than 3,000 MW, the full response 

must be within a linear interpolation from 15 seconds to 30 seconds. For example, a 2,000-MW 

disturbance should have full response within 20 seconds. 

How deployed: Primary control reserve is deployed through governor control responding directly to 

frequency deviations. 

Proposed changes: There are no known proposed changes to primary control reserve from the UCTE. 

3.3.6 Secondary Reserves 

Terminology: The term secondary control reserve is used by the UCTE for control of ACE. This same 

term is used for control of normal conditions as well as disturbance conditions, and therefore, the same 

term is described herein with both Regulating Reserve and Contingency Reserve and is separated where 

appropriate based on its application. 

Required Amount: The requirement of secondary control reserves can be seen in section 3.3.1 but also a 

rule of enough secondary control reserve and tertiary control reserve to cover the largest credible 

contingency is recommended. 

Provider: The UCTE policy gives no reference as to who can provide secondary control reserve for 

contingency events. The correction to the initial ACE must happen within 15 minutes at the latest. 

When deployed: The UCTE policy recommends the secondary control reserve to start at most 30 

seconds following the disturbance period, and must return correction to the initial ACE within 15 minutes 

at the latest. 

How deployed: Secondary control reserve is under automatic control. The UCTE describes the 

organization of control that each control area should follow. There are three different schemes that it 
56 

defines. Centralized control is defined by control that is performed centrally by only one control area in 

the designated control block. Pluralistic control is a decentralized control scheme that has all control areas 

in a block regulate their own control area on their own. Hierarchical control has one control area operate 

the control block, and then the subordinate control areas will regulate their areas based on the control 

given from the directing control area.

Proposed changes: There are no known proposed changes to primary control reserve from the UCTE. 

3.3.7 Tertiary Reserves 

Terminology: The term tertiary control reserve is used by the UCTE for use of replacing the primary and 

secondary control reserve following a contingency. 

Required Amount: It is recommended that enough tertiary control reserve, including directly activated 

tertiary control reserve and schedule activated tertiary control reserve, is available to cover the largest 

loss of supply in the individual control area. 

Provider: The UCTE policy gives no reference as to who can provide tertiary control reserve for 

contingency events. Tertiary control reserve is split between directly activated tertiary control reserve 

and schedule-activated tertiary control reserve. Directly activated tertiary control reserve is manual 

reserve used during contingency events at any time, independent from a time-frame of exchange 

schedules. Schedule-activated tertiary control reserve is activated with relation to exchange schedule time 

frames, which may normally be on 15-minute intervals. 

When deployed: Tertiary control reserve which also is called fifteen-minute reserve, is used to replace 

the secondary control reserve soon after the secondary control reserve are deployed following a 

disturbance. However, there is no recommendation on the required time of when these reserves must be 

fully replaced to withstand the subsequent disturbance. 

How deployed: Tertiary control reserves are either deployed manually through operator direction or 

through directed schedule changes.

Proposed changes: There are no known proposed changes to tertiary control reserve from the UCTE. 
57 

3.4 Summary 

The rules for operating reserves used for active power balance have been developed by years of 

experience in each region. Systems differ in the types of resources they have available, the system load 

characteristics, the size and frequency response characteristics, and the transmission network. The 

philosophy on how each system operator deals with risk can also be quite different. These differences 

may have led to the different requirements that ensured that each system could maintain reliability. Figure 

30 shows the terminology connection between the UCTE operating reserves and NERC operating 

reserves. Table VII shows some of the policy differences between the two entities. 

Figure 30: UCTE and NERC terminology. 

Primary 

control 

reserve

Secondary 

control 

reserve

Tertiary 

control 

reserve

Frequency 

responsive 

reserve

Regulating 

reserve

Spinning 

reserve

Supplemental 

reserve

Non-spinning 

reserve

UCTE NERC
58 

Table VII: NERC and UCTE policy differences 

N. America (NERC) Europe (ENTSOE/UCTE) 

Regulating 

Reserve 

NERC enforces CPS1 and CPS2 compliance 

measures but has no policy on what the actual 

regulating reserve requirement quantity 

should be. The CPS1 and CPS2 drive the 

requirements which are mostly based on time 

of day and season. 

UCTE does recommend a secondary control 

reserve requirement which is based on a 

statistical equation and mostly comes from 

load variability. However, secondary reserve 

is used for both contingencies and normal 

variations. There are no compliance 

measures. 

Following 

Reserve 

No requirements No requirements 

Contingency 

Reserve 

DCS requires ACE to be returned to 0 or its 

pre-disturbance level if negative within 15 

minutes. Enough contingency reserves

required to recover largest contingency. Many 

regions require at least 50% to be spinning. 

Similar requirement to DCS. Return ACE to 

zero within 15 minutes. Split between 

primary, secondary, and tertiary. Enough of 

these reserves should be available to cover the 

largest contingency. 

Primary 

Reserve 

No requirement. Some discussions on a future 

requirement. Only a frequency bias 

requirement as part of ACE equation of 1% 

peak load. Governor dead bands mostly set at 

36 mHz and droop at 5%, but not required. 

Primary control reserve (3000 MW) split 

between TSOs based on energy contribution. 

3000 MW based on largest credible 

Interconnection-wide event. Full Response at 

200 mHz. Response characteristics based on 

UFLS relay setting and 200-mHz safety 

margin. 20-mHz maximum insensitivity. 

Ramping 

Reserve 

No requirements No requirements 

Tertiary 

Reserve 

No quantifiable requirement but contingency 

reserve must be replaced within 105 minutes 

following contingency. 

Tertiary control reserve requirement is larger 

than the largest contingency. There is no 

requirement on how soon any reserves should 

be replaced. 

A key difference between North American and European policies is that NERC has policies that 

distinguish normal balancing from disturbance events, whereas UCTE does not. However, even though it 

is used for normal and event conditions, the method for determining the secondary control reserve 

requirement for UCTE is based on normal variability. UCTE also does not have a policy for measuring 

compliance during normal conditions as NERC does. It will be interesting to see if this difference remains 

once higher penetrations of VG enter the system. Lastly, the UCTE has a much more stringent 
59 

requirement for its primary control reserve than NERC does for its corresponding frequency responsive 

reserve. It may have been that NERC received the sufficient response without ever having a defined 

requirement, and therefore, any standard or policy was not needed. We are now seeing NERC evaluating 

this, and some of the initial discussions look like the policy may be very close to the one that has been 

established for UCTE. Both regions have very similar requirements for Contingency Reserve, both in the 

amount required, and timing on how it should respond. Neither regions have enacted any type of Ramping 

Reserve requirement as of yet. 

Very few regions have begun to change any of their operating reserve policies due to the increased 

amount of VG. ERCOT has begun to consider the possibility of wind forecast errors and the increased 

variability of wind in its up and down-regulation reserve and its non-spinning reserve. Many NERC 

regions have made enhancements to allow newer resources like demand response and energy storage 

devices to provide different types of reserves. Very few regions in North America are allowing VG to 

provide any type of reserve. However, ERCOT does require wind power to provide over-frequency 

frequency response. Hydro-Quebec is also requiring wind power to provide an emulated inertial response. 

In many European TSOs, many of the offshore wind power plants are beginning to be asked to provide 

active power control as well. Many of the high penetration systems including Denmark and Ireland, are 

looking at ways in which wind power can assist in reliability by providing different types of Operating 

Reserves. Overall, many of these policies have been around for a number of years, and significant 

changes are just starting to be enforced. With higher penetrations, we may see this trend continue. 
60 

4 New Proposed Methodologies and Renewable Integration Studies 

In recent years, many utilities, independent system operators, transmission system operators, government 

researchers, and academic researchers have been looking at how systems with large penetrations of VG 

impact reliability and costs. Some studies include as part and others as the focus, the new requirements of 

operating reserves that must be kept in order to maintain the same reliability level as without VG. The 

research has been split between large renewable integration studies and fundamental research projects. 

The large-scale renewable integration studies are evaluating real systems with simulated increased VG 

penetration and practical specific changes needed for that particular system, while the research papers are 

often modeled with test systems and results that are more general to the industry than a specific system. 

The majority of the large-scale renewable integration studies in 4.1 are based in the United States with the 

vast majority of the research studies in 4.2 being from Europe. Therefore a broad perspective of U.S. and 

European research on new methods of operating reserve requirements with high penetrations of VG is 

presented. Both types of studies are discovering new innovative methods that are advancing the 

understanding of this area. We will now discuss various studies and some of the new methodologies that 

have been reported. 

4.1 Large-Scale Renewable Integration Studies 

In recent years, a number of different entities have initiated or completed studies specifically aimed at 

analyzing the impacts and costs of operating power systems with large penetrations of variable renewable 

generation. So far, this has mostly included wind energy, but other technologies (e.g., solar) are being 

included now as well. The studies usually make assumptions about the nature of the power system at 

some time in the future. This may include additional load, additional conventional generation, additional 

transmission, and particular market and operational structures. The studies then use future wind power 

outputs and analyze the power system using simulations and statistical techniques. The wind power data 

may be developed using mesoscale modeling techniques to recreate wind power output time-series data of 

past years’ weather as input. The objectives of these studies vary, but most focus on both the operating 

costs and operating impacts. One of the major operating impacts and major contributions to increased 

costs of integrating wind and other VG is the increased amount of operating reserve that the power system 

must hold in order to maintain a system with reliability equal to today’s system without VG. We focus on 

the different methods that these studies have applied to answer these questions. More information on the 

state of the art of these studies and summaries of the studies can be found in [12][13][14]. An entire 

collection of these studies can be found on the following website: www.uwig.org/opimpactsdocs.html. 

NYISO/NYSERDA: The Effects of Integrating Wind Power on Transmission System Planning, 

Reliability, and Operations (2005) 

The NYISO/NYSERDA wind power integration study titled “The Effects of Integrating Wind Power on 

Transmission System Planning, Reliability, and Operations” was one of the first major large-scale wind 

integration studies performed in the United States [58]. The study evaluated the operational impacts of 3,300 

MW of wind power in the New York Control Area with a projected peak load of about 33,000 MW. One of 

the main investigations of the report was to evaluate the needs for increased operating reserves on the 

system due to the additional variability of wind power. For spinning reserves (Contingency Reserves), it 

was decided that abrupt loss of wind power from all wind plants throughout the state was not a credible 
61 

contingency, and therefore, the single largest contingency was unchanged. This meant the required spinning 

reserves were also not changed. The study also evaluated regulation (Regulating Reserve). The amount of 

regulation did increase with the 3,300 MW of wind based on the increased standard deviation of 6-second 

variability of net load. The standard deviation was shown to increase by 12 MW. The study team used three 

standard deviations as was currently practiced to ensure 99.7% of all of these changes would be met by the 

required regulation reserves. This meant that the regulation increased by a total of 36 MW to the existing 

requirement of between 225 MW and 275 MW. Lastly, the study evaluated load following. The analysis 

looked at 5-minute changes in net load and how the standard deviation of these changes increased compared 

to that of load alone. Five minutes is the current dispatch interval of the NYISO’s security-constrained 

economic dispatch program and corresponds to the load following time frame for the area. The statewide 

standard deviation increases by 1.8 MW from 54.4 MW to 56.2 MW with the added wind generation. 

However, it was concluded that this minor change could be accommodated by the existing processes and 

resources in the N.Y. Control Area without any new requirements. 

Minnesota: 2006 Minnesota Wind Integration Study (2006) 

The “2006 Minnesota Wind Integration Study” was also a groundbreaking study in the United States, 

evaluating high penetrations of wind power [59]. This study evaluated up to 25% (also 15% and 20%) 

wind energy (as percentage of total electric energy for the year, which is approximately 5,700 MW of 

wind capacity with a peak load of 20,984 MW). This was the highest penetration of wind power studied 

in the United States up to that time. Therefore, the study had to develop new ways of determining the 

operating reserve requirements as traditional requirements are almost entirely based on load and 

conventional generation. 

The study focused on the state of Minnesota, but balancing area operation was considered to be controlled 

by MISO. This meant that the regulating reserves would be considered for the larger footprint rather than 

smaller utility areas. Generally, the regulating reserve requirement as a percentage of the load decreases 

as the size of the balancing area increases, as can be seen in Figure 31, which is taken from the report. The 

regulating reserve requirement evaluated the added variability of wind, but calculated it to be a 2- MW 

standard deviation for every 100-MW wind plant installed. This calculation was based on operational data 

from existing wind plants. The ratio was used to calculate the regulating reserve requirement as seen in 

the following equation: 

ܴ݁݃ ܴ݁ݍ ൌ ݇ටߪ௔௢௟ௗ

ଶ ൅ ܰሺߪௐଵ଴଴

ଶ ሻ 

where k is a factor relating regulating reserve capacity requirement to the standard deviation of the 

variations (assumed to be 5 in this study, reflecting current practices); σload is the standard deviation of 

variations from load; σW100 is the standard deviation of variations from a 100-MW wind plant; and N is 

the wind generation capacity in the scenario divided by 100. The results showed increases of 12, 16, and 

20 MW for the 15, 20, and 25% cases, respectively. 
62 

Figure 31: Approximate regulating requirements for a balancing authority as a function of peak 

demand. 

The Minnesota study quantified two other reserve categories that the New York study did not. In the 

Minnesota study, these are defined as load following and operating reserve margin (Following Reserve 

and Ramping Reserve, respectively). Load following was calculated as twice the standard deviation of the 

5-minute changes in the net load, and increases ranged from 10 to 24 MW for the three cases. The 

operating reserve margin was allocated specifically for hourly forecast errors in the net load. The forecast 

of net load was a forecast of load, which is generally pretty accurate minus a forecast of wind, which is 

assumed to use persistence. This analysis assumed a dynamic requirement, one that was not constant for 

all hours, but in fact was a function of the amount of expected wind capacity. The consideration was 

based on the fact that the variability of wind is highest when the wind capacity is in the middle range (i.e., 

40-60% of total capacity) due to the wind turbines being on the steepest parts of their wind-speed-to–

wind-power conversion curves. Therefore, more reserves were needed during times when wind 

generation was at its middle range compared to times of very low wind generation or times of very high 

wind generation. The requirement was also based on two standard deviations. For the 25% scenario, this 

operating reserve margin was determined to be on average 538 MW, with a maximum of 704 MW. 

Lastly, the study also concluded that no additional contingency reserves would be required due to the 

wind because the largest contingency was unchanged. 

Arizona Public Service Wind Integration Cost Impact Study (2007) 

The “Arizona Public Service Wind Integration Cost Impact Study” was completed in 2007 and evaluated 

1-10% wind energy penetrations as a percentage of total annual energy, with some different sensitivity on 

geographic diversity [60]. The study modeled the Arizona Public Service (APS) transmission system with 

modeled wind power data used as input. The study used a similar approach to that of the 2006 Minnesota 

study for calculating the regulating reserves. It used a standard deviation of 1.5 MW for a 100-MW wind 

plant and added enough 100-MW wind plants to reach the desired penetration of wind. The square root of 
63 

the sum of the standard deviation of load squared with that of each wind plant’s standard deviation 

squared was calculated to get the total standard deviation of 1-minute changes in net load. Again, wind 

and load were determined to be uncorrelated on this time frame, as were outputs of wind plants with each 

other. A multiple of five times the standard deviation was used in this study to capture virtually all of 

these changes with the regulating reserves. The increases due to 4% and 10% wind energy were 

calculated as 2.4 MW and 6.2 MW of additional regulating reserves, respectively. This amount was used 

as a constant addition to regulating reserve requirements for all hours of the year. 

An additional reserve defined as hour-ahead firmness (Following Reserve) was calculated. The reserve 

was calculated by evaluating the combined errors of load and wind in the hour-ahead time frame. The 

study showed that the increases in these reserves due to wind were highly dependent on the accuracy of 

the current short-term load forecast. The more accurate the load forecast, the more impact the errors of the 

wind forecast would have on the net load forecast errors based on the modeled forecast data from the 

study. For the 4% wind case, if the hour-ahead load forecast had a standard deviation of 0.5% of the peak, 

the increase in these reserves due to wind would be 58.6 MW, whereas if the load forecast error had a 

standard deviation as large as 2% of the peak, the increase of this reserve due to the wind was only 22.4 

MW. These cases assumed the reserve was calculated by taking two standard deviations of the net load 

forecast errors based on analysis for the entire year. For the 10% wind case and lowest load forecast error, 

the increase of this reserve was 174 MW, due to a standard deviation increase of the wind case compared 

to the load alone case of 87.2 MW. 

Unlike the Minnesota study, the APS study used the same approach for the day-ahead forecast reserve as 

it did for the hour-ahead reserve. For both of these, the terminology used was “firmness” rather than 

operating reserve. It meant that only a certain percentage of the associated wind forecast would be 

“counted on,” which is essentially identical to adding additional reserve while counting on 100% of the 

wind forecast. This analysis took results of typical day-ahead wind forecast errors and the study used a 

conservative approach for the day-ahead firmness factor. It assumed a 20% error as being the average 

day-ahead wind forecast error for the most difficult wind sites. Taking two standard deviations, this 

turned out to be using a 60% firmness factor for the day-ahead. This is equivalent to adding 40% of the 

forecast of wind as operating reserves to be ready for the error in real-time. The day-ahead forecast 

analysis was less sophisticated than the hour-ahead forecast as it did not take the load forecast errors in to 

account and assumed the 20% error even for wind plants that were not as difficult to forecast (and may 

have only had errors equal to 10% of the wind plant). 

California ISO: Integration of Renewable Resources (2007) 

In late 2007, a study called “Integration of Renewable Resources” was completed by the California ISO 

[61]. The study evaluated the impacts of wind and solar on the California ISO. The study evaluated 6,700 

MW of wind generation on the system.7

 The study focused on regulation (Regulating Reserve) and load 

following reserves (Following Reserve). It also evaluated how ramp requirements may be increased, but 

did not specifically quantify a Ramping Reserve requirement. In order to determine some of the amounts 

of these operating reserves, it required a detailed assessment of the scheduling protocols of the California 

ISO. This can be seen in Figure 32. At the time of this study, the California ISO creates hour-ahead 

schedules based on market closures that occur 75 minutes prior to the hour. Load forecasts are actually 

 7

 The study evaluated other renewables including solar and geothermal, but the integration impacts focused on wind generation. 
64 

created 2 hours before the hour for the hour-ahead scheduling. The hour-ahead schedules are hourly 

blocks with transitions between the hours scheduled with ramps that start ten minutes before the hour and 

end ten minutes after the hour. Then every 5 minutes, the economic dispatch program is run. This uses 

forecasts that are from 7.5 minutes prior to the start of the interval, and dispatch instructions are sent 5 

minutes prior to the start of the interval. For wind forecasts, persistence forecasts are used, and therefore, 

the output of each wind plant at 7.5 minutes prior to the start of the interval is the forecast for the entire 5-

minute interval. Obviously, the generation and load is changing within each 5-minute interval as well. 

With this procedure in mind, the study determined the difference in adjustment of the economic dispatch 

and the hour-ahead schedule as load following and the difference between the realized values and the 

economic dispatch as regulation. 

Figure 32: Load following and regulation based on CAISO scheduling process. 

This analysis meant that the load following and regulation are highly dependent on the hour-ahead and 

very short term (e.g., 7.5 min ahead) wind forecast accuracy. Generally, in the previous studies the 

variability was the only source of information used to calculate these requirements. For this analysis, the 

capacity, ramping capability, and ramp duration were calculated for both load following and regulation

using the “swinging door algorithm.” The swinging door algorithm evaluates high resolution data and 

determines turning points where consistent signals make it so a previous point is not within the ramping 

range [62]. From this algorithm, a three dimensional scatter plot can be created with capacity, ramp rate, 

and ramp duration as the coordinates. A box representing a probability so that a certain number of these 

points are within the box and others are outside is drawn. Once the probability is determined, each of the 
65 

three components can be determined to define the regulation and load following requirements in terms of 

capacity (MW), ramp rate (MW/min), and ramp duration (seconds). These were all calculated as hourspecific requirements. The increases were much more significant than some previous studies with load 

following capacity requirement maximums increasing as much as 800 MW (2,700 MW existing increased 

to 3,500 MW) and regulation capacity requirement maximums increasing as much as 230 MW (250 MW 

existing increased to 480 MW) for upward directions. The downward load following and regulation

maximum increases were 600 MW (2,450 MW existing increased to 3,050 MW) and 500 MW (250 MW 

existing increased to 750 MW), respectively. These are the maximum increases by hour, and the average 

increases were lower. For both load following and regulation, the ramp rate requirements also increased 

quite significantly with the added wind generation. 

Multi-hour ramps were also an issue that was evaluated in the study. Although the impacts of these large 

ramps were analyzed, no Ramping Reserve requirement was discussed in the study. This ramping 

requirement was shown to increase with added wind generation, depending on season. Figure 33 shows 

the maximum ramp increases for morning and evening ramps due to increased net load ramping. 

Figure 33: Increases in multi-hour ramps due to the added wind generation. 

ERCOT: Analysis of Wind Generation Impact on ERCOT Ancillary Services Requirements (2008) 

In early 2008, “Analysis of Wind Generation Impact on ERCOT Ancillary Services Requirements” was 

performed for ERCOT that specifically focused on the impacts that up to 15,000 MW of wind power 

would have on ERCOT’s ancillary services [38]. The study evaluated this wind penetration on 2008 load 

levels which is about a 28% penetration of wind capacity as a percentage of peak load. The study also 

ignores present day transmission constraints as it assumes through the Competitive Renewable Energy 

Zone (CREZ) process that sufficient transmission will be built to support this amount of renewable 

expansion [63]. As discussed in section 3.2, ERCOT has five main categories for operating reserves: 

regulation service up (Regulating Reserve), regulation service down (Regulating Reserve), responsive 

reserve service (Contingency Reserve – Primary and Secondary Reserve), non-spinning reserve service

(Following Reserve), and replacement reserve service. Replacement reserve service is actually 

accounting for a difference between market bids and ISO forecasts (i.e., discrepancy between operations 

and markets), and therefore, not really defined in the definitions of section 2. The requirements for each 

of these services were evaluated using state-of-the-art techniques. 
66 

The regulation service up and regulation service down is defined in the study as the deviation of the net 

load from the economic dispatch set point. The analysis of both up and down services showed that the 

general nature of the regulation service requirements did not change with the increasing amount of wind 

power, but that certain hours did have new peaks driven almost entirely by wind power. Figure 34 shows 

the changes in both regulation up and regulation down service for the hourly requirements. The average 

increase for both up and down service is about 18 MW. As can be seen by the minimum of up service and 

the maximum of down service, the added wind doesn’t necessarily always increase the deployment. The 

study determined the requirements by statistically capturing the 98.8th percentile of deployments by hour 

by month. On average, this increased the requirement from 232 MW to 285 MW for up regulation service

and -233 MW to -281 MW for the regulation down service when increasing to 15,000 MW of wind 

power. The study also recommended considering the increased amount of capacity of wind power from 

the previous year where the deployments are studied to determine the requirements so that increases (or 

decreases) can be made with the consideration of the higher wind penetration. Lastly, the study 

recommended using the wind forecast to add or subtract from the regulation service requirement based on 

what the predicted wind output will be. 

Figure 34: Summary of changes in hourly maximum regulation deployments of 15,000-MW wind 

capacity. 

The study did not go into great detail on the requirements related to responsive reserve service and nonspinning reserve service. The maximum magnitude of net load ramp events with 15,000 MW of wind 

power would increase from 3,101 MW to 4,502 MW in a 30 minute period. It is likely that these ramp 

periods would have to be covered by some combination of the responsive reserve service and nonspinning reserve service (some combination to equal the Ramping Reserves). They discussed the 

tradeoffs and that certain extreme weather events could change the requirements because of significant 

changes in wind power. The current non-spinning reserve service requirement requires a startup time of 

offline resources of 30 minutes. It was suggested that if the startup time is 10 minutes, this may reduce the 

requirements of the responsive reserve service since the energy from the offline resources can be 

deployed more quickly. It was stressed that while responsive reserve service needs to be able to cover 

generation outages, it only needs to cover large drops in wind generation to the extent the non-spinning 

reserve service cannot. Lastly, it was discussed that the wind power forecast used in the day-ahead 

commitment should be able to guide ERCOT when determining the procurement of the non-spinning 

reserve service just as it does with the load forecast. 
67 

Ireland: All Island Grid Study (2008) 

The “All Island Grid Study” in Ireland was published in 2008 and examined the Irish system’s ability to 

integrate various penetrations of wind generation [64]. Six plant portfolios were examined to meet the 

load forecasted for 2020. Portfolio 1 contained 2 GW of wind; 2, 3, and 4 contained 4 GW; portfolio 5 

contained 6 GW; and portfolio 6 contained 8 GW of wind generation. This is in the context of a projected 

peak load of 9,618 MW and a load factor of 63.9%. The study involved hourly scheduling of the system 

with the WILMAR system planning tool [65]. 

The study incorporated a refined implementation for reserve provision with only two categories specified 

in the model: spinning and replacement reserve. The definition of a unit capable of meeting the 

replacement reserve standard was an off-line unit with a start-up time of less than 60 minutes and online 

units whose capacity was not allocated to the spinning reserve requirement. This is a highly simplified 

model given the existing structure of reserve provision in the Irish system. The requirements for spinning 

and replacement reserve were based on a mixture of existing and proven requirements and newer 

techniques for the provision of reserve for wind generators. 

The spinning reserve requirement is calculated as being the size of the largest on-line unit plus an additional 

contribution for wind generation, calculated based on the work in [66] (and described in detail later in 

section 4.2. Ireland is an island system with one 500-MW interconnector in operation and a 500-MW 

interconnector under construction, both to Great Britain. System modeling for the year 2020 assumed that 

100 MW of spinning reserve can be obtained through interconnection. Another 50 MW of reserve is 

assumed to be provided from interruptible contract loads. Of the remainder, a constraint of a maximum of 

50% of reserve demand can be provided by pumped storage. Wind generators are allowed to provide 

spinning reserve when curtailed. 

The demand for spinning reserve is illustrated in Figure 35 on a weekly averaged basis. Spinning reserve 

is required more frequently as the amount of wind increases in the portfolio, significantly so in portfolio 

6. The scheduled outage of the largest unit on the system (i.e., 480-MW combined cycle gas turbine) is 

seen to reduce the spinning reserve requirement significantly during weeks 31 to 34. While the VG 

requires additional spinning reserve, the largest contributing factor remains the loss of the largest 

conventional unit. 
68 

Figure 35: Weekly demand for spinning reserve for each generation portfolio. 

Replacement reserve is calculated as a function of the possible forced outages of units and an additional 

margin which is a function of the 90th percentile of the net load forecast for each particular scenario. The 

90th percentile was chosen as it most closely matches experience with proven reserve standards. 

WILMAR implements rolling unit commitment and has stochastic optimization functionality, which 

requires probabilistic forecasts and thus, replacement reserve is required for each potential probabilistic 

scenario. Demand for replacement reserve is a function of the installed wind power and the forecast error 

over longer horizons, as shown in Figure 36 and Figure 37. Figure 36 shows how the replacement reserve 

requirement is a function of how far ahead the optimization is evaluating. In other words, generally, errors 

will be larger further out and therefore more replacement reserve is required compared to more immediate 

horizons. In Figure 37, where portfolio 5 contains 6 GW of wind generation, the requirement for 

replacement reserve is seen to exceed 3 GW in one instance. This is due to a 1-GW load rise at the same 

time as a 1 GW decrease in wind. 
69 

Figure 36: Average requirement for replacement reserve by time horizon. 

Figure 37: Hourly requirement for replacement reserve. 

Eastern Wind Integration and Transmission Study (2010) 

The “Eastern Wind Integration and Transmission Study” (EWITS) evaluated the operational impacts of 

various wind penetrations, locations, and transmission build-out options for most of the U.S. Eastern 

Interconnection [67]. The study included three scenarios of 20% wind energy with each representing 

different primary locations of the wind, and one 30% wind energy scenario. The majority of this region is 

currently operated by ISOs and RTOs who administer wholesale electricity markets. These markets have 

evolved since their inception in the late 1990s. The further evolution of the rules and procedures that the 

markets will follow was a key assumption on how operating reserve requirements are determined in the 

study, with the boundaries between balancing areas and what is extracted from sub-hourly energy markets 

also having an impact on the method used. 
70 

The first procedure of the study was to determine the contingency reserves required. As many previous 

U.S. studies have done, these assumed the current rule and determined that the largest contingency was 

not affected by the large amounts of wind generation. One and a half times the single largest hazard in 

each operating region determined the amount of contingency reserves for that region. 

Many prior studies in the United States concluded a slight, but not insignificant, increase in the amount of 

required regulating reserve due to the increased variability of wind added to that of the load. In EWITS, a 

similar methodology to the prior studies was performed. The minute-to-minute variability separated from 

a 20-minute rolling average of a 100-MW wind plant was used for the analysis, and the standard deviation 

was determined to be 1 MW. It was assumed that there is no correlation between wind plants for power 

output deltas in this time frame, and therefore, the total standard deviation for a balancing area was 

calculated by geometrically adding the 1-MW standard deviation for all 100-MW wind plants on the 

system. For load-only, the regulating reserve requirement was assumed to be 1% of the total load, and 

assumed to be equal to three times the standard deviation of the load variability. Since load and all wind 

variability on this timeframe were also considered to be independent of one another, the standard 

deviations of all wind and load were then geometrically added together by calculating the square root of 

the sum of their squares. The total standard deviation was increased by less than 1 MW when the wind 

was added to the load, and therefore the variability of wind was not considered as part of the regulating 

reserve for the study.8

Unlike other studies, it was determined that the uncertainty in the wind forecasts used for economic 

dispatch would impact the regulating reserve much more than what was shown for the variability. 

Economic dispatch programs that run every 5 minutes would use information from at least 10 minutes 

before the operating interval. Since it is too late to adjust the economic dispatch for any deviations, these 

deviations would all be met by units providing regulating reserve. Assuming a 10-minute-ahead 

persistence forecast, the additional regulating reserve was determined by looking at the standard 

deviation of 10-minute changes in wind output (load forecast for 10-minute ahead was assumed to be 

quite good and load forecast error was ignored). Figure 38 shows the standard deviation of the 10-minuteahead wind forecast errors as a function of the average hourly production of the total wind. The highest 

variability is near 50% production, where the anticipated 10-minute change can be up or down, and also 

relates to wind turbines being at the steepest part of the wind speed to power conversion curve. The 

function was used for the hourly wind-related standard deviation of the regulating reserve requirement 

and was geometrically added to the load regulating reserve requirement discussed above. The equation is 

shown below, where σst(HourlyWind) is the standard deviation of wind forecast errors that is a function 

of the predicted wind portrayed in Figure 38. 

ඨ൬ כ 3 ൌ ݍܴ݁ ܴ݁݃

ܽ݀݋ܮ ݕ݈ݎݑ݋ܪ1%

3 ൰

ଶ

 ሻଶܹ݅݊݀ݕ݈ݎݑ݋ܪሺ்ௌߪ ൅

 8

 Calculations based on a balancing area with 100-GW load and 60 GW of wind power, which was about the average for the largest ISO 

balancing areas that were a part of the study. 
71 

Figure 38: 10-minute-ahead wind generation forecast errors as function of wind production. 

A similar approach was used for the hour-ahead wind forecast error. However, in this case it was assumed 

that the errors that were not occurring often could be compensated for with off-line reserve. Therefore, 

one standard deviation of the hour-ahead forecast error was required to be spinning, and two standard 

deviations could be non-spinning. Also, since the reserves were used in the production cost simulations 

for the study, it was ensured that if the reserves had to be used for the hour-ahead forecast error of the 

hour in question, those reserves did not have to be kept in real-time. In other words, if reserves were 

needed because less wind was available than forecast, the model would release that amount of reserves in 

real-time since the reserves were used for the forecast error and not needed further. The total amounts of 

all reserves used in the study are shown in Figure 39. The reserve requirement was an hourly value that 

was a function of wind levels. 

Figure 39: Summary of reserve methodologies for EWITS. 
72 

Southwest Power Pool: Wind Integration Task Force Integration Study (2010) 

In the Southwest Power Pool (SPP) “Wind Integration Task Force (WITF) Integration Study,” operational 

requirements for 10%, 20%, and 40% wind energy were studied for the SPP footprint [68]. The study 

assumed that SPP was operating as a single balancing authority with a co-optimized energy and ancillary 

service market (i.e., Day-2 Market). In this study, the reserve determination methodologies were unique 

once again. The study evaluated reserve requirement needs for regulation reserves (Regulating Reserve), 

load following reserves (Following Reserve), and contingency reserves. For regulation-up and 

regulation-down reserves, the team explicitly used the NERC CPS2 standard to determine the increases. 

Therefore, to equate to the 90% compliance requirement of CPS2, the 5th and 95th percentiles were used 

as the bounds to the requirement. Also, because the ACE is out of compliance only if the 10-minute 

average is above the balancing area L10 (see section 3.1.1), this value is used in the overall equation of 

determining the requirement. The equations are shown below: 

ܴ௨௣ ൌ ටሺ0.01݈௣௘௔௞ ൅ ܮଵ଴ሻଶ ൅ ܽ∆ܹଽହ

ଶ െ ܮଵ଴

ܴௗ௢௪௡ ൌ ටሺ0.01݈௣௘௔௞ ൅ ܮଵ଴ሻଶ ൅ ܽ∆ܹହ

ଶ െ ܮଵ଴

Where lpeak = peak load; ܽ is a calculated coefficient, and ΔW are the respective percentile of 10-minute 

deltas. Figure 40 shows the regulation reserve requirements for peak days. Like in the other two studies, 

the project team proposes that regulation reserve requirements be dynamic, and are time varying based on 

system conditions. The study also recommends the possibility of a load following reserve requirement 

and provides analysis on some of the ramping requirement increases in this time frame. Lastly, the 

contingency reserve requirement was not changed for the study, but it was recommended that it be 

reevaluated if extensive high-voltage transmission expansion occurs in order to transfer high penetrations 

of wind power from remote locations. 
73 

Figure 40: Total regulation requirements for seasonal peak loads (MW). 

4.1.1.1 Western Wind and Solar Integration Study (2010) 

The “Western Wind and Solar Integration Study” (WWSIS) was conducted for a set of the Westconnect 

utilities as shown in Figure 41 [69]. Although it focused on this region, the entirety of the U.S. portion of 

the Western Interconnection was modeled with wind, load, generation, and transmission data. The study 

analyzed the integration impacts of up to 30% wind energy and 5% solar energy in the study region, with 

20% wind energy and 1% solar energy in the rest of the Interconnection. A large part of the study 

analyzed the impacts of operating reserves that the increased penetrations of wind and solar would have 

on the system. 

Figure 41: WWSIS WestConnect Study Footprint. 

As discussed in section 3.2.3, the WECC region is proposing to require its balancing areas and reserve 

sharing groups hold 3% of its generation plus 3% of its load as contingency reserve, with half of this as 
74 

online spinning reserve. The study used this rule and an analysis indicating that the standard deviation of 

10-minute load variability is about 1% of the load, to make the assumption that 3 times the standard 

deviation of the 10-minute variability would be held for the variability reserve (Following Reserve). The 

study recommended that one standard deviation of wind variability be held for regulation reserve

(Regulating Reserve) and have AGC capability. The report also discussed the need for a dynamic 

requirement that depends on both the wind and load levels. The team then analyzed the standard deviation 

for combinations of wind and load levels with each represented by 10 bins. An example of the standard 

deviation of the 10-minute net load delta for the study footprint is shown in Figure 42. 

Figure 42: standard deviation of 10-minute delta for different wind and load levels.

The figure shows that the requirements would change based on the predicted wind and load levels. For 

example, low load levels generally have little changes, and therefore, would need less variability reserve. 

High variability can be seen around the load level 7 and wind level 5, as well as load level 9 and wind 

level 3. At times where these levels were predicted, the system operator may require additional reserves to 

accommodate this variability. Figure 43 shows the requirements based on the 3σ rule for all the individual 

regions in the study footprint. The rule can be compared with using the 3% load, and then with the 3σ for 

load variability alone. In areas with high wind and relatively low load (i.e., Wyoming), some significant 

changes in the variability reserves can be seen. Figure 44 also shows the same methodology using one 

standard deviation applied to the regulation reserve need.
75 

Figure 43: Reserve requirements using 3% or using 3 sigma rule for each area. 
76 

Figure 44: One % peak load regulation rule and average 1 sigma regulation rule for all regions. 

This method was then analyzed further so that simple rules that didn’t need detailed look-up tables could 

be used by system operators when determining the needs for these variability reserves. At first a rule of 

3% load plus 5% wind was analyzed with satisfactory results, which can be seen in Figure 45. Using this 

rule it was found that the quantity of reserves held was always greater than or equal to the 3σ rule. 

However, it was also seen to be over-carrying the reserve in many of the wind and load level scenarios. 

Furthermore, in individual regions like Wyoming, this simple rule actually led to many instances of being 

short of the 3σ requirement. 
77 

Figure 45: Three + 5 rule for operating reserve requirements for different wind and load levels. 

To further improve on the use of simple rules to carry the needed variability reserve, the team then used a 

best fit using three degrees of freedom. These included the coefficient to load level, the coefficient to wind 

level, and an amount of wind capacity where further incremental increases in reserve were not needed. In 

other words, X*Load + Y*Wind, until Wind > Z(nameplate capacity). It was determined that this rule was a 

good compromise between accuracy of capturing the 3σ need for variability reserve and simplicity. Table 

VIII shows the requirements for the study footprint and for each region inside the study footprint. 

Table VIII: WWSIS reserve rules for 30% local priority scenario 

Load Only

(% of load)

Load Term 

(% of load)

Wind Term 

(% of wind 

production)

up to 

(% of wind 

nameplate)

Footprint 1.3 1.1 5 47

Arizona 2.2 2.2 5.6 36

Nevada 2.1 1 10.7 54

Colorado East 2.4 2 5.7 68

New Mexico 2 3.1 3.5 70

Wyoming 1.3 2.7 8.7 33

Colorado West 1.8 3.1 7.3 100

30% LP Scenario
78 

4.2 Academic Research 

In addition to the integration studies that are being performed by utilities, transmission system operators, 

and other organizations representing future penetrations on existing power systems, there has been 

substantial work from the academic institutions in the area of power system operations with high 

penetrations of VG and in particular, determining operating reserve requirements. The work has been 

done in parallel with many of the studies and many of the methods have shared some common traits. It is 

important to note that researchers have been investigating optimal operating reserve requirements for 

some time before the introduction of large penetrations of VG and how VG could change these 

requirement methods. As discussed earlier, most of the operating reserve requirements have been based 

on rules of thumb that compute the requirements based on the largest units or a percentage of the load or 

generation. Even if the only uncertainty is the failure of conventional units, the deterministic criteria used 

today do not take into account the failure rates of the generating units, the value of not shedding load, or 

the possibility of two or more near-simultaneous outages. 

In [70], the authors proposed a probabilistic method where the unit commitment problem would 

determine the optimal amount of spinning reserve (Contingency Reserve and Following Reserve) for 

different load levels based on the probability of having insufficient generation due to generator outages or 

load forecast errors. The method evaluated the load probability distribution and evaluated the risk 

involved with the current unit commitment using a capacity outage probability table by the convolution of 

the cumulative probability distributions. This shows the amount of risk by looking at the probability that 

the generation online is less than the load. The process would iterate until the risk level was met for the 

time period. The paper discussed briefly the idea that the risk index may be based on arbitrary concepts, 

and introduced the concept of determining the appropriate risk value based on the cost of load shedding. 

In [71] and [72], this idea was further researched and methods were discussed that used the reliability of 

units, probability of load forecast errors, and different values of lost load to determine the appropriate 

reserve requirement (mostly Contingency Reserve). In [71], the authors evaluated this in a market setting 

with two different types of pricing mechanisms. In [72], they performed the calculation offline from the 

formal unit commitment solution by minimizing both the cost of reserve and the cost of load shedding 

ignoring inter-temporal constraints. These methods showed promise on how operating reserve requirements 

could be determined based on the reliability of units, the possibility of multiple outages, and the social cost 

of load shedding, which in theory, all showed benefits over the current rule of thumb procedures. 

Many researchers have been realizing that the uncertainty and variability impacts that come from 

significant amounts of VG are different from that of conventional generation outages, and that the 

methodologies in place may change significantly in order to determine the optimal requirements to 

maintain a reliable, yet cost-effective system. 

Dany 2001: In analysis performed by [73], the impacts on primary control reserve (Primary Reserve), 

secondary reserve (Regulating Reserve and Following Reserve), and long term reserve (a planning 

reserve and not Operating Reserve) were evaluated with high penetrations of wind power on four test 

power systems representative of the German system. Because of the small variations in the time frame of 

primary control reserve when compared to the variations of load and outages of large conventional units, 
79 

there was determined to be negligible impacts to the requirements of primary control reserve. For 

secondary reserve, there was a separation into two components: secondary control reserve (Regulating 

Reserve) and manual secondary reserve (Following Reserve). The secondary control reserve is 

essentially utilized for the variations in the net load, while the manual secondary reserve is utilized for the 

increased forecast error and is deployed through an optimized dispatch (fluctuations greater than 15 

minutes). The assessments of these reserve increases are based on calculating the standard deviation of 

the ACE with and without the wind power. The paper also emphasizes the need for negative (downward) 

control reserve since the minimum generation points of conventional generating units becomes binding 

more often at high wind penetration levels. Two programs were developed to calculate these 

requirements. The first models the dynamics of the system along with the adjusted reference points (AGC 

set points) to determine a distribution of ACE. The second models the dynamics of the system in a 

simplified manner so that outages of conventional units are also modeled. The first model evaluates the 

change in ACE while the second model will determine the probability that there is a deficit of manual 

secondary reserve, PrD,MR, and the probability that there is a surplus, PrS,MR, meaning that there is not 

enough negative manual secondary reserve due to the minimum generation limits of conventional units. 

These probability values are mostly due to the outages of units and forecast errors of load and wind 

power. 

Since criteria of sufficient secondary reserve is not as concrete as other reliability metrics (e.g., loss of load 

probability), the analysis simply compares the increases in σ(ACE), PrD,MR, and PrS,MR compared to the same 

systems without wind power. The wind penetrations analyzed were up to 100% wind capacity by the peak 

load of different systems, with different wind locations and different conventional generating sets. The 

analysis of secondary control reserve evaluated the change in the standard deviation of ACE with increasing 

wind capacities compared to a system with no wind. Most of the systems showed about a 35% increase in 

the standard deviation of ACE at a total wind capacity equal to the peak load. A direct conclusion from this 

analysis is that the increase in the secondary control reserve capacity does not reduce the area control error 

as much as the increase of the reserve power gradient (ramp rate of the reserve). It was concluded that the 

systems needed to increase the power gradient of the secondary control reserve three times as much in the 

100% of peak load scenario to get same ACE as the system without wind. 

In the second simulation, the required manual secondary reserve was evaluated by assessing the increase in 

both PrD,MR and PrS,MR with the increasing wind penetrations. Since the main attribute to these values 

increasing was wind power forecast errors, which at the time of this writing there was little experience in, 

the simulations were performed for different errors with standard deviations ranging from 10% to 20% of 

installed wind capacity. The increase of the need for manual secondary reserve did not change significantly 

until at a level of wind at about 20% capacity of peak load. From 20% to 40% of peak load, the increase in 

this reserve was very near linear at an increase of about 300 MW per GW of installed wind (10% forecast 

error) to 600 MW per GW of installed wind (20% forecast error) with the system of a peak load of about 6 

GW. For the larger system of 20-GW peak load, this linear increase happens at a wind penetration of 10% to 

20% of peak load. This increase grows more exponentially at larger penetrations. For the 6-GW system, the 

required reserve is between two and three times the amount without wind at a penetration of 100% of the 

peak load. For the 20-GW system, this is between three and six times. Although the paper did not show 

examples, the author discussed that the requirements for the negative manual secondary reserve to be very 

similar to that which came out of the analysis for the positive reserve. 
80 

Doherty 2005: The analysis of [66] evaluated the need for system reserves (Contingency Reserve and 

Following Reserve) due to wind and load forecast errors either by themselves or in addition to 

contingency (loss of supply) events. A model evaluated the reliability of a system based on the full outage 

probability (i.e., the probability of an outage occurring in any hour, which is different than forced outage 

rate, the probability that the unit is out during the hour), and wind and load forecast errors. Its risk level is 

determined by the load shedding incidents (LSI) tolerated per year. For example, if one LSI occurred 

during the year and lasted 24 hours, this would equate to an LSI of one and a loss of load expectation of 

24 hours. The load forecast errors were combined with the wind forecast errors as independent and 

uncorrelated normally distributed Gaussian values. 

The probability of load shedding during any hour would be equal to the probability of load shedding 

during normal instances when the system is holding its full reserve requirement, plus the probability of 

load shedding following a time period Hr after a disturbance event, when the system is using reserve to 

respond to the initial disturbance, and is therefore more vulnerable to load shedding because of the lesser 

reserve amount. A load shedding incident here is defined as any incident in which the supply deficiency is 

more than the quantity of reserve. Both full outages and partial outages of conventional units are 

discussed. The event of three conventional unit outages within the reserve replacement time period is 

ignored due to its very small probability. Therefore, the probability of load shedding occurring is seen in 

the following equation: 

൅ ௛ܱܵܰܮܲ ൌ௛ ܵܮܲ

1

2 ሺݎܪሻ כ ሾܨܱܲଵ,௛ ܨܱܲଶ,௛ ... ܨܱܲீ,௛ሿ ൈ 

ۏ

ێ

ێ

ۍ

௛ܱܵܰܮܲ െ௛ ,ଵܱܨܵܮܲ

௛ܱܵܰܮܲ െ௛ ,ଶܱܨܵܮܲ

ڭ

ے௛ܱܵܰܮܲ െ௛ ܱீ,ܨܵܮܲ

ۑ

ۑ

ې

 ൅ 

1

2 ሺݎܪሻ

כ ሾܱܲܲଵ,௛ ܱܲܲଶ,௛ ... ܱܲܲீ,௛ሿ ൈ 

ۏ

ێ

ێ

ۍ

௛ܱܵܰܮܲ െ௛ ,ଵܱܵܲܮܲ

௛ܱܵܰܮܲ െ௛ ,ଶܱܵܲܮܲ

ڭ

ے௛ܱܵܰܮܲ െ௛ ܱܵܲீ,ܮܲ

ۑ

ۑ

ې

Where PLS is the probability of load shedding, PLSNO is the probability of load shedding during the 

normal case (no prior generator trip), Hr is the reserve replacement time in hour, FOP is the full outage 

probability, PLSFO is the probability of load shedding following a full outage of a generator, POP is the 

partial outage probability, and PLSPO is the probability of load shedding following a partial outage of a 

generator. G is the set of generators. The 1⁄2 coefficient of Hr represents the integral of the linear response 

of the replacing reserve (Tertiary Reserve) that replaces the reserve used for the generator outage. 

The PLSNO, PLSFO, and PLSPO are determined by calculating the system reserve, or remaining reserve, 

due to full and partial outages, being below the positive net demand forecast error (i.e., the actual net 

demand was higher than the forecast net demand by an amount greater than the reserve or remaining 

reserve). By setting an LSI target, the amount of system reserve can be quantified by analysis of these 

steps. A case study using this methodology was performed for the Ireland electricity system with an 

installed capacity of 7500 MW and wind penetrations up to 2000 MW. Full outage probabilities of 

conventional units in the system ranged from 0.003 to 0.006, the standard deviation of load forecast errors 

was taken to be 75 MW, and standard deviation of wind forecast errors was taken to be 15% of the 

installed capacity for a 3-hour forecast horizon. With an LSI of 3 incidents per year, the reserve was 

found to be about 625 MW compared to 475 MW without wind. 
81 

Other important conclusions came from this work. It discussed the impact that forecast horizon had on wind 

forecast error. The standard deviation of wind forecast errors increased with forecast horizon and therefore, 

the quantity of system reserve would increase for time horizons further ahead than for those closer to the 

operating hour. It then evaluated the different reserve types based on the time frame of response that they 

are expected to operate at. In each time frame, a different standard deviation of the net demand forecast error 

drives the requirement. At very short time frames, this standard deviation is very close to that of the standard 

deviation of variations of the net demand, since persistence forecasts are considered to be the most accurate 

type of forecast in these periods. Figure 46 shows results from the study with an LSI of 3 per year and a 

reserve replacement time of 2 hours for each of the reserve categories. 

Figure 46: Reserve requirement of different reserve types based on their forecast horizon. 

Ortega-Vazquez 2009: In [74], a novel approach was used in determining the optimal amount of 

spinning reserve for penetrations of wind power on a system. The methodology is based on [72] 

mentioned above that was not evaluating impacts of wind generation, but more on conventional 

generation outages and load forecast errors. The method determines the spinning reserve (Contingency 

Reserve and Following Reserve) requirement in an offline study that equals the marginal cost of 

supplying the spinning reserve with that of the socioeconomic cost associated with load shedding. The 

authors assume that a large geographically distributed set of wind plants will lead to a wind forecast error 

that is normally distributed with a standard deviation calculated from the following: 

௪ߪ

௧ ൌ 1

ிݓ 5

௧ ൅

1

50 ܹூ
82 

Where wF is the wind forecast and WI is the installed capacity of the wind. This error is combined with 

that of the load, and uncertainties of conventional generation outages determined from a capacity outage 

probability table. The uncertainties along with the spinning reserve requirement can determine the 

expected amount of load shedding, and with a VOLL, an expected socioeconomic cost associated with 

load shedding. The optimal spinning reserve required is determined for different net load levels by giving 

a requirement that has a marginal cost equal to that of the additional cost reduction of load shedding it 

ensures. The method was tested on the IEEE Reliability Test System with an installed capacity of 3105 

MW, installed wind capacity of 620 MW, and VOLL equal to $1000/MWh. The result was compared 

with ones with the methods of using the largest unit as reserve, using 3.5 times the standard deviation of 

net demand forecast, and the sum of both. The 3.5σ method performs very similarly to the optimized 

spinning reserve method at low to moderate wind levels. Using the largest unit as reserve and using the 

sum of the largest unit and 3.5σ increased the total costs by about 1.44% and 2.66%, respectively. 

Morales 2009, Yong 2009, Bouffard 2008, and Wang 2008: In Morales et al [75], Yong et al [76], 

Bouffard et al [77], and Wang et al [78] the operating reserve (Contingency Reserve and Following 

Reserve) requirement was inherently managed in the unit commitment or economic dispatch problem. 

Each of these formulated a two-stage stochastic unit commitment problem, where multiple scenarios of 

wind power were modeled so that the unit commitment solution was able to meet each of these scenarios 

reliably and in some cases cost effectively. More information on stochastic unit commitment scheduling 

can be found in [79]. In [78] the second-stage wind outcomes were not optimized, but the model ensured 

that they could be met reliably with respect to load balance and transmission limits. The other models 

would calculate probability distribution functions for wind and load, including a discretized normally 

distributed wind and load [77], a truncated normally distributed wind and load [76], and distribution taken 

from observed values with applied scenario reduction techniques [75]. 

The methods of [75]-[77] modeled the second stage scenarios and associated probabilities as part of the 

objective function, minimizing the total expected costs. In [76], generation contingencies were additional 

stochastic inputs along with the wind and load, in [77] the wind and load were combined for a stochastic 

net load input, and in [75], wind was the only stochastic variable. In [76] and [75], the transmission 

network was also included so that different scenarios wouldn’t violate transmission constraints. In [76], it 

also included AC constraints in the network modeling so that voltage and MVA flows were considered. In 

[76] and [75], both spinning and non-spinning reserve were modeled based on the contingencies that can 

occur and the possible wind scenarios. In [76] this stochastic security-constrained optimal power flow 

was compared with a deterministic optimal power flow with exogenous reserve requirements to evaluate 

the difference in the reserve quantities. In [75], tradeoffs were made between spinning and non spinning 

reserves by scheduling wind power at higher and less probable outputs in the 1st stage market, to allow for 

cheaper non spinning reserve compared to spinning. All of these methods considered an hourly resolution 

model for 24-hour, 1-hour, and 4-hour study horizons for [75], [76], and [77], respectively. A summary of 

the methods and results can be seen in Table IX. 
83 

Table IX: Comparison of different stochastic methods 

 Morales et al [75] Yong et al [76] Bouffard et al [77] 

Network 

Model 

DC AC None 

Stochastic 

Variables 

Wind Wind, load, and generator 

contingencies 

Wind and load 

Study Period 24 hour 1 hour 4 hour 

Test System 73-bus IEEE Reliability Test 

System, 118-branch, 

aggregated generator 

groupings, peak load of 2850 

MW 

179-bus, 263-branch, 29-

generator, 60785 MW load, 

1-bus, 0-branch, 3-generator, 

Load (H1:30 MW, H2: 80 

MW, H3: 110 MW, H4: 40 

MW) 

Wind Power 150-MW wind plant at 

single bus 

600 MW, 1800 MW, and 

3000 MW at 1 bus 

0-20% wind power 

penetration 

Scenario 

conditions 

Wind scenarios from actual 

measurements, scenario tree 

was reduced to 20 scenarios 

1. Wind forecast scenarios: 

(probability of occurrence, 

%deviation from output) 

0.1, -12; 0.2, -6; 0.4, 0; 0.2, 

6; 0.1, 12 

2. Generator outages: 

8 units with probability of 

outages ranging from 0.01 to 

0.015 

3. Load forecast scenarios: 

unclear 

1. Wind forecast scenarios: 

σwt = 0.02 + 0.2ŵt, where σwt

is the standard deviation, and 

ŵt is the wind forecast. 

2. Load forecast scenarios: 

Standard deviation = 2% of 

hourly demand 

Both are combined to a 

scenario tree. 

Results Total cost depending on 

which bus the wind was 

sited on: 

Energy from $408,704 to 

$411,917 

Reserve from $13,631 to 

$15,049 

Cost per MWh depending on 

bus: 

Energy from $5.12/MWh to 

$5.16/MWh 

Reserve from $3.79/MWH 

to $4.18/MWh 

600-MW wind pen.: Spin = 

26.93 MW 

Non-spin = 7.01 MW 

1800-MW wind pen.: 

Spin = 26.05 MW 

Non-spin = 8.69 MW 

3000-MW wind pen.: 

Spin = 27.1 MW 

Non-spin = 8.11 MW 

Cost of reserves at 0%: $175 

Cost of reserves at 20%: 

$250 
84 

Ruiz 2009: In [80], the authors present a similar stochastic framework for modeling uncertain wind power 

scenarios. The methodology used was proposed in [81]. They include uncertain wind and generation outages 

as the stochastic input and model hourly resolution for a 24-hour period. In this case, the unit commitment 

decision for all but fast start units must be fixed in the first stage. The key contribution from this work was 

the notion of how additional deterministic operating reserves (Contingency Reserve and Following 

Reserve) are required when operating a stochastic unit commitment program. The research compared a 

stochastic case where reserve was required in each of the stochastic scenarios and one where the reserve was 

only required in the base (median) scenario. They analyzed how different deterministic reserve requirements 

supplemented with the stochastic framework could increase efficiency of system operations. A case study 

was performed on the Public Service of Colorado system. The stochastic case with reserve only required in 

the base scenario had a 0.23% cost reduction when compared to the traditional deterministic case, whereas 

the case with reserve requirement in each scenario had a 0.18% cost reduction. Even though these savings 

are very low, they were positive for all 10 simulated periods. When the same systems were tested without a 

flexible pumped hydro storage plant, the percentage savings of the stochastic scenario reserving the base 

scenario doubled. The work emphasized the notion that because of computational difficulties of stochastic 

programs, not all uncertainty can be captured within the scenarios, and deterministic procedures must 

complement the stochastic programs to manage the uncertainty. 

Matos 2011: In [82], a different approach of determining the operating reserve (Contingency Reserve, 

Regulating Reserve, and Following Reserve) was researched. The authors determined probability mass 

functions for conventional generator outages and discretized probability functions for wind power 

scenarios with a discretized probability distribution function for load to create a distribution function of 

the random variable representing the system generation margin. This describes the probability of having 

more or less generation than load. Negative values would represent occurrences where the generation was 

short and load shedding would be required. The area under the curve that is left of zero would equal the 

total loss of load probability (LOLP). By adding reserve to the system, the entire curve would essentially 

be shifted to the right by the amount of the reserve. Therefore, adding 700 MW of reserve would give a 

loss of load probability that is equal to the probability of the original system generation margin being less 

than -700 MW. Finally, the authors describe that the amount of required reserve can be obtained by using 

these probability distribution figures and using decision making processes. The decision making process 

discussed included the following: a maximum threshold of risk (e.g., maximum EENS), an equivalent 

reliability cost (using VOLL or something similar), and a value function approach (similar to a reliability 

cost, but more of a non-linear cost function). 

The method and tool used for the analysis was called the reserve management tool. A case study was 

performed for the Portuguese power system with a total installed capacity of 10,395.8 MW and 2,742 MW 

of installed wind capacity. This method was compared to (A), the UCTE method described in section 3.2.1 

for secondary reserves, plus tertiary reserves greater than the largest unit online (B), a method using 

6*√(Load) during fast load variation and 3*√(Load) otherwise for secondary and the largest unit plus 2% of 

the forecast hourly load for tertiary, and (C) a method based on taking the square root of the sum of variance 

of wind, load, and conventional generation and multiplying by a constant of 3. These three methods 

compared with the reserve management tool showed different results of reserve requirements throughout the 

day. Rule A and Rule B were insensitive to risk and to the wind power levels. A Monte Carlo simulation 

was performed for one of the hours. Rule A showed incredible risk and rule B showed excessive reserve 
85 

levels. Rule A had 19.21% loss of load occurrences, rule B had 1.07% loss of load occurrences, and the 

reserve management tool had 1.37% loss of load occurrences. The key being that the reserve management 

tool keeps the risk level that it was defined with, whereas rule A and rule B do not have that capability. Rule 

C has a risk threshold given to it, but the assumption of a Gaussian distribution of errors causes the actual 

risk to be different. The work in this paper emphasized that different decision makers have different 

perspectives on how much risk they are willing to take and how much they value reliability, and allowed for 

their methodology to be flexible for different decision making policies. 

4.3 Summary 

The industry and academic perspectives of studying the optimal operating reserve determination problem 

have provided significant advancement from the way that the current standards have been developed. It is 

generally agreed that increased VG will create an increase in the total amount of operating reserves held in 

power systems. The main questions are how much and of what type. Most of the studies broke out the 

reserve categories in the ways that they are broken out today in the NERC, UCTE, or other jurisdictions. 

With these in mind, all of the studies have determined that no additional Contingency Reserves will be 

needed, as total wind power loss from the wind resource in the time frame of contingencies is not a possible 

scenario. There has been much debate on how wind power affects the normal condition reserves, like 

Regulating Reserve and Following Reserve. Some studies suggested that the increase in Regulating Reserve 

would be increased significantly, whereas others would say that the required response to variability and 

uncertainty is much slower and should be added to the Following Reserve. Some further studies try not to 

segregate the reserve categories and determine a total Operating Reserve that can be used for any imbalance 

on the system. Each study seems to learn from those in the past, and these debates can be resolved in the 

future with improved models and more detailed data. 

Many of the initial wind power integration studies basically used the methods that were developed in 

industry, while incrementally adding the impacts of wind power to the calculations. More recent studies 

realized that entirely new methods had to be developed to better capture the changing system needs while 

still keeping similar reliability metrics. The probability distribution of VG unavailability is much different 

than that of conventional generation’s unavailability. Also, the way that systems manage the scheduling of 

the power system will have a significant impact on how operating reserves should be held. This includes the 

time delays and ramping requirements of actual dispatch intervals that are apparent today, as well as more 

futuristic scheduling strategies like stochastic techniques. A key conclusion of many of the more recent 

studies in both industry and academia is that these operating reserve requirements need to be dynamic. 

Rather than keeping the same requirements all times of the day and all days of the year, system operators 

should be using the information available to them to understand when the system is at low or high risk, and 

then schedule operating reserves accordingly. Some of the more recent research discussed the need for 

dynamic requirements not only based on time, but time horizon as well. As uncertainty is not only a 

function of time, but time ahead. 

 Although there are many similarities between the many methods described in this section, there are also 

many differences. Many of the methods reference those from past studies and refine these methods with 

more innovative techniques. Some focus on different VG impacts more than others (e.g., variability, 

uncertainty, ramp events). Others may be limited by what kinds of data are available. High time-resolution 

VG data is very difficult to obtain, especially for researchers. Furthermore, in order to study higher 
86 

penetrations, those that are not yet in existence, much of the data must be modeled and how realistic the 

modeled data is may not be easily validated. It makes it difficult for system operators to adopt these study 

methodologies and know which are the most optimal for their systems. Further research is needed to 

connect these methods together and emphasize which may be more advantageous for specific system 

characteristics. 
87

5 Conclusions and Discussion

This report summarizes the many different policies, standards, rules, and analytical methods for 

determining the operating reserve requirements for various systems. The requirements include the 

capacity amounts, speed at which they should respond, how they should respond, when they should 

respond, and how soon after they respond should they be ready for subsequent usage. The policies around 

current system operations have been developed after many years of experience of reliably operating a 

particular system and input of the stakeholders of that system. Some policies have shared some very 

similar methods while others are very different. Many of these systems have very small amounts of VG 

and therefore, have not seen the need to adjust these methods and policies due to the increased variability 

and uncertainty of VG. However, most are very aware of the impacts that they are starting to see with the 

current amounts now on their system. This makes the topic of operating reserve requirements with VG a 

topic with lots of interest from system operators around the world, and leads to much of the study work 

that has been performed in recent years.

Studies have been performed for existing systems to estimate the needs of the future for these systems if 

they were to have large penetrations of VG. Other studies have been performed for test systems, where 

the goal was more on testing methodologies rather than specific answers for a particularsystem. Each of 

these studies also may have had different limitations as well. For example, some studies may have been 

required to keep the current operating or market structure as constant for the future study. Others may 

have not had the data available for them to study the same types of impacts or same categories of 

Operating Reserve. The large-scale wind integration studies from section 4.1 seem to use the current 

terminology of the Operating Reserve on their current systems, with increases to each type and definitions 

of what each type can and cannot be used for. The academic studies of section 4.2 mostly seem to use 

more generic terms deciding that a requirement be kept and shared between all forms of variability and 

uncertainty. On one hand, separating out the requirements may allow for the best form of operating 

reserve to be used for its particular purpose. For example, specific ramp rates or online/offline 

contributions kept for certain types of events or non-events. On the other hand, keeping reserve as one 

requirement exemplifies the fact that a single risk metric is being used, and that the many reasons for loss 

of load should be considered together to understand the full risk levels. Further work will likely use a 

tradeoff of these two advantages.

Many of the rules and standards of current operations use a static reserve requirement. Either a single 

reserve value is used for all the time or simple time-of-day rules are built in to different reserve 

requirements. Some may use single variables as input to their reserve rules (e.g., load in UCTE secondary 

control reserve requirement). However, many of the newer studies are determining that the variables that 

cause variability and uncertainty should be used in an intelligent manner to determine a dynamic reserve 

requirement. It should be understood how all these variables impact the reserve requirements how these 

variables can be used as part of the reserve determination problem. It may be that there is a function that 

has all power system variables that can calculate the most optimal amount of Operating Reserves on the 

system. Since more Operating Reserve can always increase the reliability, the main part of this equation is 

the minimum risk level allowed for the system or the value the system operator gives to losing load or 

having ACE or frequency deviations.
88

As some of the studies showed, new innovative techniques can be done to inherently schedule Operating 

Reserve without having deterministic requirements set aside. It might be said that a stochastic scheduling 

program that had infinite computing power so that it can use all possible power system scenarios as part 

of its solution at a very high time resolution would not need to have any externally input Operating 

Reserve requirements. The tradeoff between these methods and the reality of finite computing power may 

lead to newer techniques on how systems schedule for uncertainty and variability and how Operating 

Reserves requirements are determined.

Some of the uncertainty into how exactly systems will be impacted with high penetrations of VG is 

because of the lack of data. The data needed to truly understand the impacts are not abundantly available,

and modeling of this data is not always perfectly realistic. The more that this data becomes available as 

larger penetrations of different technologies enter the market and share this data, the better some of these 

studies and methods may become. It may just be that systems can incrementally understand better the 

needs of their system as more VG resources enter the grid.

New technologies have recently been shown to provide many of our Operating Reserve types very 

satisfactorily. For example, demand response, storage resources, and even some VG resources have 

shown capabilities of providing different types of Operating Reserves for different systems. Each of these 

resources has different capabilities, limitations, and costs that may change how systems prepare for 

further uncertainty and variability. It is important though, that the power system needs are what is used 

when determining the Operating Reserve requirements, and should enforce rules limiting resources that 

are physically able to provide similar capabilities to historical resources.

In conclusion, further work is needed to find commonality between different methods and policies to 

determine the most optimal amount of Operating Reserve on different systems. The events that cause the 

need to use Operating Reserve with higher penetrations of VG need to be better understood so that they 

can be translated into Operating Reserve requirements. More work on what types of power system 

phenomena affect the Operating Reserve requirements is needed so dynamic requirements can be tried in 

current systems. Better sophisticated modeling of uncertainty and high-resolution scheduling programs 

are needed that try to simulate operator actions rather than only the automatic scheduling programs. Better 

quality data and more of it will be needed for advancing this research. Better understanding of resource 

technologies and how they can each contribute differently to different needs will truly advance the 

research. It is easy to see due to the interest in researchers and power system industry members that the 

topic is very important and may have a significant impact on how systems integrate more VG

technologies onto the grid cost effectively.
89

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