Economic transactions due to primary and secondary regulation of frequency in Argentina, methods and experience

This paper presents the method developed and applied to evaluate the costs for primary and secondary regulation of frequency in the economic transactions between the companies forming the Argentinian electric system. To consider the primary frequency regulation, the method is based on a redistribution of the income that the generators collect for energy by pricing the reserve according to the energy cost in the system. This transaction reflects the benefits received and the contributions made to primary frequency regulation without altering the overall amount of income collected for energy by all generators as a whole. In the case of secondary frequency regulation, the method is based on the primary reserve effectively available and valued in accordance with the marginal cost of the system, efficiency of secondary frequency regulation being considered. Results obtained after seven years of application of these methods in a competitive market structure are evaluated