The impact of ancillary services in optimal DER investment decisions

Microgrid resource sizing problems typically include the analysis of a combination of value streams such as peak shaving, load shifting, or load scheduling, which support the economic feasibility of the microgrid deployment. However, microgrid benefits can go beyond these, and the ability to provide ancillary grid services such as frequency regulation or spinning and non-spinning reserves is well known, despite typically not being considered in resource sizing problems. This paper proposes the expansion of the Distributed Energy Resources Customer Adoption Model (DER-CAM), a state-of-the-art microgrid resource sizing model, to include revenue streams resulting from the participation in ancillary service markets. Results suggest that participation in such markets may not only influence the optimum resource sizing, but also the operational dispatch, with results being strongly influenced by the exact market requirements and clearing prices.