Extra revenues with ancillary services in Portugal and Spain

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To do this, we simulated the production of two solar PV plants located in the southern regions of both countries. Our goal was to compare the revenues obtained by operating solely in the day-ahead energy market with the ones obtained by operating in both the day-ahead and ancillary services markets. 

The simulation was conducted for the year 2023, providing an indicator of potential income increases. However, it is important to note that market pricing conditions can vary significantly from year to year, which could considerably affect the results.

Graphs 1 and 2 illustrate the relationship between day-ahead prices and secondary band prices in Portugal and Spain, respectively. 

Graph 1

Graph 2

The secondary band is the amount of capacity the producer makes available for the TSO to request upward and downward regulations. 

As the analysis of these graphs reveals a clear negative correlation between the two factors in both countries, this negative correlation presents an opportunity for producers: 

When day-ahead prices are low, secondary band prices tend to be higher, leading to better revenues. 

Our findings indicate that, in 2023, participating in the secondary service market resulted in an approximate 11% increase in EUR/MWh earned for both countries, as shown in Graph 3.

Graph 3

While achieving this in real-world conditions is more challenging, and actual facilities might see lower increases, the potential for significant extra income is evident. The accuracy of forecasting production and prices for market bidding plays a crucial role in obtaining these gains.

Conclusion

The ancillary services market offers a promising field for renewable energy producers to enhance their revenue streams. Although real-world operations face challenges due to the complexities of accurate forecasting, the significant potential for additional revenue can make the effort worth it. 

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