Ancillary Services
An Ancillary Service is a service that is required to maintain Power System Security and Power System Reliability, which facilitates orderly trading in electricity and ensures that electricity supplies are of acceptable quality. The types of ancillary services are defined in the Market Rules.
System Management estimates the requirements for ancillary services, based upon standards set out in the Market Rules. System Management is required to ensure that sufficient ancillary services are provided and its options for procuring them include:
- making use of the Electricity Generation Corporation’s resources; or
- if the Electricity Generation Corporation lacks adequate resources, or they can be obtained at a lower cost, through contracting with third parties. Any contracting must be on a least cost basis and may involve a competitive tender.
System Management does not fund Ancillary Services. Rather, the IMO recovers the costs of the ancillary services from Market Participants through the wholesale market settlement systems, and uses the revenue received to fund Ancillary Services provided by the Electricity Generation Corporation and contracted Ancillary Service providers.
The IMO allocates the cost of ancillary services between Market Participants on the following basis:
- the monthly cost of load following will be allocated amongst Market Participants in proportion to their monthly contributing quantity, where this quantity comprises the sum of the Market Participant's metered load and metered Non-Scheduled Generation. Load following costs are not allocated to Scheduled Generation.
- the monthly costs of spinning reserve is borne by generators in proportion to the deemed risk that the generator imposes on the system, based on the output of the generator in each Trading Interval during the month.
- the monthly costs for Load Rejection Reserve, Dispatch Support and System Restart are recovered from Market Customers in proportion to their monthly metered consumption.
Clause 3.11.13 of the Market Rules requires the IMO to make the approved Ancillary Service report for each year available on the Market Web Site. Below is an overview of the Ancillary Service reports published by the IMO since market start. Click on each respective title to access the report.
This document is published in accordance with Market Rule 10.5.1 (g).
