Frequency Regulation Compensation in the Wholesale Energy Markets
Policy Number Order 755
Federal Energy Regulatory Commission (FERC)
FERC Order 755 institutes "pay for performance" compensation in the wholesale regulation market. In the regulation market, resources provide rapid fluctuations in output in order to match systemwide supply and demand. This occurs largely in wholesale markets spanning transmission lines, which are regulated under FERC. Order 755 changed the regulation compensation schemes to reward faster-ramping resources with greater payments in the wholesale frequency regulation markets. This especially impacted fast-acting energy storage systems, which are often well-suited for frequency regulation due to their fast ramping capabilities. Those faster-ramping, more accurate resources are now given greater compensation in the wholesale frequency regulation markets.
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