Power Trading - PJM AS Market

Based on the most helpful WSO content, here's a breakdown of PJM's Ancillary Services (AS) market and some clarifications on your questions:

1. Ancillary Services Overview:

   • PJM's AS market includes Regulation (RegA and RegD), Synchronized Reserves, Non-Synchronized Reserves, Primary Reserves (sum of synchronized and non-synchronized reserves), Secondary Reserves, and 30-Minute Reserves.
   • Regulation services are used to balance supply and demand on a second-to-second basis, while reserves are used to ensure reliability in case of unexpected events.

2. Regulation Market:

   • You're correct that the regulation market operates similarly to energy markets in terms of Day-Ahead Market (DAM) and Real-Time Market (RTM) awards and pricing.
   • It has a two-tier payment system:
     • Capacity Payment: For reserving MWs.
     • Performance Payment: Based on how well the resource performs in following the regulation signal.

3. Reserves Market:

   • PJM has markets for Synchronized Reserves and Non-Synchronized Reserves.
   • For every energy bid, market participants are indeed subject to offering synchronized reserves, with a default offer price of $0 unless they specify otherwise.
   • Inflexible vs. Flexible Reserves:
     • Inflexible Reserves: Resources that cannot adjust their output quickly or are committed to a specific output level.
     • Flexible Reserves: Resources that can adjust their output dynamically to meet system needs.

4. Clearing Prices and Awards:

   • Day-Ahead Market (DAM): Reserves clear prices and awards in the DAM based on forecasted system needs and bids submitted by market participants.
   • Real-Time Market (RTM): Reserves clear prices and awards in real-time based on actual system conditions and the need for reserves.

5. Confirmation of Your Understanding:

   • Your understanding of the regulation market's two-tier payment system is correct.
   • Your description of synchronized and non-synchronized reserves is also accurate, including the default $0 offer price unless changed by the participant.
   • The mention of inflexible and flexible reserves aligns with the context of how resources are categorized based on their operational flexibility.

If you're still navigating PJM's materials, focusing on their training guides or reaching out to PJM's support team might help clarify specific operational details further.

Sources: Q&A: Director of Energy Trading, Q&A: Director of Energy Trading, Real Time Power Trading - US vs Europe, Refined fuels trading experience but lackluster Engineering GPA, Any energy traders here?