The Alberta Electric System Operator (AESO) plays a crucial role in maintaining the reliability of Alberta’s power grid. One of the key mechanisms the AESO uses is the Operating Reserves, which is essential for balancing supply and demand in real-time. This guide will walk you through what the program is, how it works, and how your business can participate.
What is Operating Reserves?
Operating Reserves (OR) is a type of Ancillary Service program that can be activated quickly to stabilize the grid if there’s an unexpected shortfall or surplus in electricity in Alberta. These reserves help maintain the balance between electricity supply and demand, ensuring that the grid remains reliable. The collective effort of businesses participating ensures lower cost energy as well as keeping the lights on and providing grid flexibility.
Today, the AESO manages two types of Operating Reserve market programs that organizations can participate in:
- Regulating Reserve: Used to manage small, minute-to-minute variations in supply and demand. Generators that can provide power to the grid consistently are applicable for this type of Operating Reserve.
- Spinning and Supplemental Reserve: collectively called Contingency Reserve, acts as standby reserve that can deliver power within 10 minutes of activation in case of a sudden, unexpected loss of generation. Generators can provide Spinning Reserve maintaining at a low generation or no-load state, while large load resources and some fast-ramping generators can provide Supplemental Reserve.
How Does Operating Reserves Work?
Operating Reserves are procured by AESO through a competitive bidding process. Energy providers submit bids to offer their generation capacity or load reduction capabilities as reserves. The cleared bids are scheduled to be on standby, ready to be directed when AESO signals a need.
- Participation: Generators, energy storage facilities, and even large consumers who can reduce their load quickly can participate in the OR market.
- Activation: If there’s an unexpected drop in supply, AESO activates these reserves, typically by notifying customers through their aggregator so they are alerted to the grid needs. Then, these customers quickly inject power into the grid or reduce demand, helping to stabilize the system.
- Compensation: Providers are compensated for being on standby (availability payment). Today, organizations can earn more than $240,000/MW-Year for their participation.
- Availability Payments: You’ll receive payments for being on standby, even if your resources are not activated.
Why are Operating Reserves Important?
Operating reserves are critical for maintaining the stability and reliability of Alberta’s electricity grid. They provide a buffer against unforeseen events, such as sudden outages or spikes in demand, ensuring power supply remains consistent even during challenging conditions.
For businesses, participating in operating reserves can be an opportunity to generate additional revenue, support grid reliability, and contribute to Alberta’s energy security.
When Does this Program Take Place?
Operating Reserve is a 24 x 7 x 365 program that helps maintain grid reliability. Clients can provide their operating schedule of when they can participate so they are only on-call during those times. Beyond that, there are on-peak and off-peak times which are the most common times that an activation may occur.
- On-peak: 7:00 AM – 11:00 PM
- Off-peak: 11:00 PM – 7:00 AM
The most lucrative time due to grid needs for this program typically takes place during the winter months of November through March, so it is crucial to enroll with your aggregator before then to maximize your earning potential.
Steps to Participate in AESO Operating Reserves
If you’re considering participating in AESO’s operating reserve, here’s a step-by-step guide:
- Assess Eligibility: Determine if your generation assets or load management capabilities meet AESO’s criteria for operating reserves. Rodan Energy will help you conduct this test to determine your eligibility. This typically includes having a certain level of load flexibility or generation capacity that can be activated within 10 minutes of notice.
- Register with an Aggregator: Rodan Energy will start by registering you as a market participant with the AESO. This involves meeting certain technical requirements and submitting necessary documentation.
- Understand Market Rules: Familiarize yourself with the AESO market rules, specifically the guidelines for operating reserves. AESO offers detailed manuals and resources to help you understand the requirements.
- Respond to Dispatch Signals: Once you are in the market, you will need to be ready to respond to AESO dispatch signals, which could come at any time during the commitment period. Rodan Energy will provide these signals to clients via phone, text, email, or push notifications to alert you to take action. In addition, if preferred, we can take direct control of curtailment or generation through remote access to simplify your participation and ensure you meet your energy targets during a directive.
- For Load Resources: You reduce your electricity consumption according to the agreed-upon amount. This may involve shutting down non-critical processes, switching to backup power, or adjusting production schedules.
- For Generation: Your generation units are brought online to supply power to the grid. This typically needs to be done within a 10-minute window to meet AESO’s requirements.
- Monitor Performance: Both during and after an event occurs, monitor your performance to ensure you meet the targets. Rodan Energy provides a platform that enables real-time visibility into your energy usage. This is crucial for maintaining your eligibility and maximizing revenue.
Boost Revenue & Grid Stability with AESO Operating Reserves
AESO operating reserves are a vital component of Alberta’s energy landscape. By understanding how they work and the steps to participate, your business can play a significant role in supporting grid reliability while unlocking new revenue streams. Whether you’re a generator, an energy storage provider, or a large industrial consumer, participating in the AESO operating reserves market is not just a business opportunity but a way to contribute to the overall stability of Alberta’s power grid. Reach out to Rodan Energy today to see how you can start earning revenue and supporting the Alberta electric grid!
