The control reserve capacity is an important ancillary service that ensures the reliability of a power system. As more variable renewable energy sources are installed onto the grid, it might be preferable for them to start providing the control reserve capacity whenever possible for the economic and environmental benefits it could bring about, but the question remains whether this "flexible" mode of operation would affect the reliability of the power system significantly, and what specific system, economic, and environmental impacts it would lead to. We therefore modeled how the flexible mode of operating variable renewable energy sources could be carried out, and how it would affect different agents and the entire system in a simulated German electricity market in the near future, using the agent-based electricity market simulation program flexABLE.
The results of our simulations suggested that allowing variable renewable energy sources to participate in the control reserve market could reduce the fossil fuel consumption, the total variable system cost, and the total fuel-related carbon emission of the power system, while it could also increase the producer surplus of the variable renewable energy power plant operators, without compromising the reliability of the power system. Factors that would affect the results, e.g. the competition within the renewable energy sector, the fuel switching effect within the conventional energy sector, the feed-in premium level, the reliability criteria of the control reserve services, the carbon price, and the market design were discussed, all of which could provide insights for further research and policy discussions on related topics.
Keywords: variable renewable energy sources, flexible variable renewable energy sources, VRE integration, power system flexibility, control reserve, ancillary services, energy economics, electricity market, economic dispatch