Capacity & Ancillary Services Markets Course

Lesson 1 • Physical Characteristics of Electric Power

Covers the real-time balance requirement, grid physics, and why electricity cannot be stored at scale. Grounds all subsequent market design in physical constraints.

Lesson 2 • Reliability Standards and Obligations

Defines planning and operating reliability criteria set by reliability coordinators. Shows how reliability obligations motivate capacity and ancillary service requirements.

Lesson 3 • Energy Market Basics

Explains day-ahead and real-time energy markets, locational pricing, and settlement. Provides the pricing baseline needed to understand capacity and ancillary markets.

Lesson 1 • Forward Procurement and Commitment Periods

Examines multi-year forward auctions, delivery periods, and their effect on investment certainty. Links procurement horizon to financing and construction lead times.

Lesson 2 • The Missing Money Problem

Analyses price caps and their suppression of scarcity rents that would otherwise fund new entry. Motivates capacity market creation as a policy response.

Lesson 3 • Capacity Accreditation Methods

Covers how different resource types receive capacity credit based on their contribution to reliability. Addresses intermittent resources and demand response accreditation.

Lesson 4 • Demand Curves and Auction Parameters

Explains how sloped demand curves replace vertical demand in capacity auctions to reduce price volatility. Covers parameter-setting methodology and sensitivity.

Lesson 1 • Black Start and System Restoration

Covers cranking power requirements, restoration path planning, and black start provider obligations. Positions black start as a low-frequency, high-consequence ancillary service.

Lesson 2 • Voltage Support and Reactive Power

Explains reactive power production and absorption, voltage schedules, and local procurement. Highlights why reactive services are typically procured locally rather than traded.

Lesson 3 • Emerging Ancillary Service Categories

Introduces fast frequency response, inertia services, and ramping products driven by high renewable penetration. Prepares students for evolving market product definitions.

Lesson 4 • Operating Reserves: Spinning and Non-Spinning

Defines synchronised and non-synchronised reserves, response times, and substitution rules. Connects reserve categories to contingency planning requirements.

Lesson 1 • Co-Optimisation of Energy and Reserves

Demonstrates how simultaneous clearing of energy and reserve markets minimises total system cost. Shows how opportunity costs link energy and ancillary service prices.

Lesson 2 • Procurement Mechanisms and Timelines

Compares day-ahead, hour-ahead, and real-time ancillary service procurement windows. Explains how procurement timing affects reliability and price outcomes.

Lesson 3 • Performance Measurement and Penalties

Covers performance scoring, non-performance penalties, and their role in ensuring resource deliverability. Links penalty design to market power mitigation.

Lesson 4 • Offer Structures for Ancillary Services

Covers capability offers, availability payments, and activation payments in ancillary service markets. Guides students through constructing cost-reflective offers.

Lesson 1 • Qualification and Registration

Walks through the steps to register a resource, demonstrate capability, and obtain capacity accreditation. Covers documentation, testing, and deadline management.

Lesson 2 • Capacity Obligations and Compliance

Explains what cleared capacity obligates a resource to do during the delivery period. Covers availability requirements, outage reporting, and substitution options.

Lesson 3 • Performance Incentives in Capacity Markets

Analyses performance assessment intervals, bonus payments, and deficiency charges. Shows how performance rules shift risk from ratepayers to capacity providers.

Lesson 4 • Offer Development and Pricing Strategy

Guides construction of capacity offers using net cost of new entry benchmarks and competitive analysis. Addresses offer floor rules and strategic positioning.

Lesson 1 • Self-Scheduling and Bidding Decisions

Compares self-scheduling into ancillary markets versus relying on market dispatch. Analyses conditions under which each approach maximises resource revenue.

Lesson 2 • Resource Eligibility and Qualification

Details technical requirements for each ancillary service product, including ramp rates and response times. Guides resources through qualification testing and certification.

Lesson 3 • Revenue Optimisation Across Service Types

Applies portfolio optimisation to stack energy, capacity, and ancillary revenues. Introduces linear programming concepts for multi-market dispatch decisions.

Lesson 4 • Dispatch Signal Response and Control

Covers automatic generation control signal following, ramp compliance, and control system tuning. Directly affects performance scores and penalty exposure.

Lesson 1 • Market Monitor Roles and Interactions

Explains independent market monitor authority, annual state-of-the-market reports, and participant engagement. Guides practitioners on productive monitor interactions.

Lesson 2 • Market Power in Ancillary Services

Examines how locational constraints and fast response requirements create ancillary service market power. Covers real-time mitigation triggers and automatic price caps.

Lesson 3 • Regulatory Oversight and Compliance

Covers market surveillance, data reporting obligations, and enforcement actions for market manipulation. Prepares participants to maintain compliance programmes.

Lesson 4 • Offer Mitigation Mechanisms

Explains offer caps, reference prices, and conduct-and-impact tests used to constrain market power. Evaluates how mitigation affects investment incentives.

Lesson 1 • Investment Decision Frameworks

Applies discounted cash flow and real options analysis to capacity and ancillary revenue streams. Quantifies uncertainty in multi-market revenue projections.

Lesson 2 • Strategic Positioning for Future Markets

Synthesises course content into a strategic planning process for asset owners and market participants. Covers competitive intelligence, scenario planning, and adaptive strategy.

Lesson 3 • Decarbonisation and Market Transition

Examines how high renewable penetration reshapes capacity adequacy and ancillary service needs. Addresses carbon pricing interactions with capacity and ancillary markets.

Lesson 4 • Market Design Evolution and Reform

Tracks how capacity and ancillary market rules evolve in response to technology and policy shifts. Equips students to anticipate and respond to rule changes.