On Reserve Markets in the Era of High Storage and Flexibility Penetration

The transition to renewable energy sources poses unique challenges to power system operators, particularly in efficiently procuring reserves. This paper investigates the discrepancies between existing reserve procurement frameworks and the capabilities of emerging players such as storage and flexible demand in systems with high renewable penetration. Using a characteristic example, we expose the inability of current reserve products to enable the new players to express their capabilities, which leaves them exposed to systemic risks. We proceed to present a solution where a new type of reserve allows to bridge this discrepancy, enhancing the reliability and flexibility of the power system. Our findings underscore the urgent need for a revised regulatory framework to accommodate the growing demand for ancillary services and harness the full potential of emerging technologies in renewables-and-flexibility driven power systems.