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Modern electricity grids throughout the world, particularly in islands such as Great Britain, face a major problem on the road to decarbonisation: the significantly reduced level of system inertia due to integration of Renewable Energy Sources (RES). Given that most RES such as wind and solar are decoupled from the grid through power electronics converters, they do not naturally contribute to system inertia. However, RES could support grid stability through appropriately controlling the converters, but currently no market incentives exist for RES to provide this support. In this paper we develop a methodology to optimally clear a market of ancillary services for frequency control, while explicitly considering the participation of grid-forming and grid-following inverter-based technologies. We propose a mathematical framework that allows to compute shadow prices for ancillary services offered by a pool of diverse providers: synchronous and synthetic inertia, enhanced frequency response (e.g. from curtailed RES) and traditional primary frequency response (e.g. by thermal generators). Several case studies are run on a simplified Great Britain system, to illustrate the applicability and benefits of this pricing scheme.

Assigning Shadow Prices to Synthetic Inertia and Frequency Response Reserves From Renewable Energy Sources