This article has been accepted for inclusion in a future issue of this journal. Content is final as presented, with the exception of pagination. IEEE TRANSACTIONS ON POWER SYSTEMS 1 Market Designs for the Primary Frequency Response Ancillary Service—Part I: Motivation and Design Erik Ela, Member, IEEE, Vahan Gevorgian, Member, IEEE, Aidan Tuohy, Member, IEEE, Brendan Kirby, Senior Member, IEEE, Michael Milligan, Senior Member, IEEE, and Mark O’Malley, Fellow, IEEE Abstract—The first part of this two-paper series discusses the motivation of implementing a primary frequency response (PFR) market in restructured pool-based power markets, as well as the market design that would create the right incentives to provide the response reliably. PFR is the immediate, autonomous response of generation and demand to system frequency deviations. It is the critical response required to avoid triggering under- and over- fre- quency relays or instability that could lead to machine damage, load-shedding, and in the extreme case, blackouts. Currently, in many restructured power systems throughout the world, ancillary services markets have been developed to incent technologies to pro- vide the services to support power system reliability. However, few ancillary services markets include a market explicitly incentivizing the provision of PFR. Historically, PFR was an inherent feature available in conventional generating technologies, and in most sys- tems, more was available than needed. Yet, recent trends in de- clining frequency response, the introduction of emerging technolo- gies, and market behavior may soon require innovative market de- signs to incent resources to provide this valuable service. Index Terms—Ancillary services, energy markets, frequency re- sponse, power system economics, power system operations, power system reliability, unit commitment, variable generation. NOMENCLATURE Generator Parameters: Maximum generating capacity (MW). Minimum generating capacity (MW). Maximum apparent power capacity (MVA). RR Ramp rate for secondary reserve (MW/min). Inertia constant (s). DB Governor dead band (Hz). QSC Quick-start capability available in (MW). Droop curve (p.u. Hz/p.u. MW). Equivalent droop curve (Hz/MW). Manuscript received May 15, 2012; revised November 21, 2012 and May 14, 2013; accepted May 21, 2013. Paper no. TPWRS-00514-2012. E. Ela, V. Gevorgian, B. Kirby, and M. Milligan are with the National Renew- able Energy Laboratory, Golden, CO 80401 USA (e-mail: erik.ela@nrel.gov; vahan.gevorgian@nrel.gov; kirbybj@ieee.org; michael.milligan@nrel.gov). A. Tuohy is with the Electric Power Research Institute, Knoxville, TN 37932 USA (e-mail: atuohy@epri.com). M. O’Malley is with University College Dublin, Dublin 4, Ireland (e-mail: mark.omalley@ucd.ie). Color versions of one or more of the figures in this paper are available online at http://ieeexplore.ieee.org. Digital Object Identifier 10.1109/TPWRS.2013.2264942 SF Shift factor contribution to line flow (unitless). Cost function for providing energy. Cost function for providing reserve. System Parameters and Requirements: Load (MW). Reserve demand (MW). Nominal frequency (Hz). Load damping constant (p.u. MW/p.u. Hz). Equivalent load inertia (s). VOLL Value of loss load ($/MW-h). VOIR Value of insufficient reserve ($/MW-h). Time associated with frequency nadir (s). Time associated with steady-state frequency (s). Time required to recover to nominal frequency (min). Inertia requirement (MVAs). PFR capacity requirement (MW). PFR requirement at (MW). PFR requirement at (MW). Secondary spin reserve requirement (MW). Secondary nonspin reserve requirement (MW). Maximum frequency deviation (Hz). Maximum dead band allowed (Hz). Maximum amount of flow on line (MW). Steady-state frequency (Hz). Minimum frequency (Hz). Variables: Energy schedule (MW). Full PFR availability (capacity) (MW). PFR availability at nadir time (MW). PFR availability at steady-state time (MW). 0885-8950/$31.00 © 2013 IEEE