Impact of Ancillary Services and Its Prices on Large-Scale Solar and Wind Power Penetration in Electricity Market

Nowadays, solar and wind power generation is an important part of the power sources in many countries all over the world. However, due to the variability and uncertainty of these sources, stable operation of the power system with large solar and wind power penetration is a big challenge for system operators. In order to enhance the contribution efficiency of solar and wind power in the power market, a strong ancillary service system is essential and must be reasonable priced. The ancillary services considered in this paper are spinning reserve, non-spinning reserve. In addition, a model for calculating and comparing generation costs for energy and ancillary services, with and without penetration of solar and wind power in the power market have been proposed. Consequently, this model has been developed and validated with a case study. The results show that in a power system with large proportion integration of solar and wind power, the energy and ancillary services generation costs for the power system are high. Besides, the feed-in tariffs of solar and wind power are more expensive than the traditional electricity generation, which leads to high locational marginal prices of the electricity market.