Providing ancillary service with commercial buildings: the Swiss perspective∗

Ancillary services constitute the cornerstone of the power grid. They allow for an efficient system operation, provide resilience to uncertainties and establish safeguards against unprecedented events. Their importance is growing due to the rise of grid decentralisation and integration of intermittent, renewable power sources, which lead to more variability and uncertainty in the system. Today, the vast share of ancillary services is provided by large generating units. An ongoing effort by research and business entities focuses on using variation of loads connected to the power grid in order to increase significantly the provision of such services, hopefully at a reduced cost. We examine here, from an economic perspective, the use of commercial buildings as ancillary service providers based on real prices from the Swiss electricity market. We calculate the effect of retail electrical prices on the economic performance of a building and find that for the rates charged in the least expensive cantons a single building can reduce its overall energy costs, when participating in the ancillary services market. For the high end of prices this gradually becomes prohibitive but can be alleviated for a building that has a need for electricity during nighttime hours, as well asaytime. Finally, we show, the counter-intuitive result that providing ancillary services can increase the comfort levels of a building at a decreased cost.