A new report from Ardour Capital Investments says that the US market for grid frequency regulation services open to new providers was worth nearly $360 million in 2004, and is expected to rise this year.
The American frequency regulation market has increased visibility and greater accessibility to new service providers, the report says. And, since deregulation a number of the Independent System Operators (ISOs) and Regional Transmission Organisations (RTOs) have opened up their markets to new entrants in order to provide greater competition, lower costs, and improved service.
The report adds that, as the industry evolves, additional ISOs and RTOs are expected to follow suit and allow access to their frequency regulation markets and, furthermore, pricing for such services is directly linked to the price of electricity, which is also on an upward curve. The growing contribution from wind power to total installed capacity is also expected to further boost the market.
The report focuses on four markets – ISO New England; New York ISO; California ISO; and the PJM Interconnection – which covers close to 30% of US generation capacity. Midwest ISO is expected to open its frequency services market to competition later this year.
