Ancillary services – what is their value? Who should pay for them and how much? This analysis tried to find the answer.

The aim of the study was to analyse economic and institutional context of providing ancillary services such as island mode and black start. Attention was paid especially to the provision of the above-mentioned ancillary services by the Vrchlabí power plant. The analysis was carried out from the perspective of both the power plant and the grid.
The study considered prioritization of the available financing schemes of the ancillary services, including legislative and other institutional barriers of utilization of the individual possibilities (inclusion of additional costs in a regulated asset base, direct investment subsidy, subsidy from the state budget, financial participation of customers).

Based on the pilot project, the annual costs associated with provision of the ancillary services were estimated at CZK 201,000 per installed MWe. In the case of the distribution network operator, the costs were estimated as an interval of 287–510 CZK/MWh supplied, depending on the technological complexity of modifications to the grid (the pilot project or the minimum cost scenario). Financial participation of customers proved to be the prioritized scheme in the case of entities in the island mode (as a payment for the additional service). An exception was the case of powering critical infrastructure, where inclusion of additional costs in a regulated asset base seems to be the best solution.

The results were utilized in negotiations about the future shape of support to the ancillary services in the Czech Republic.

Project team: Ing. Vítězslav Malý, Mgr. Ladislav Sobotka, doc. Ing. Ondřej Vojáček, Ph.D.