Frequency regulation is an ancillary service with the purpose of managing the quality of energy on the grid. Frequency regulation balances the fluctuations between electricity generation and electrical load and manages the variability in the grid’s frequency output and is required to maintain grid balance regardless of whether the electricity market is regulated or deregulated; frequency regulation is relevant to every grid system. Traditionally, frequency regulation was largely tied to the wholesale energy market. Today, a second key driver has developed – intermittent renewable energy. Solar PV, wind, and other intermittent resources are causing frequency instabilities on the electrical grid. In addition, in face of energy security concerns, major economies are mandating changes in energy mixes globally, altering the mix of technologies available to deliver frequency regulation.

New opportunities in the frequency regulation sector are emerging in countries that are liberalizing or deregulating electricity markets. Additional opportunities are developing in fully deregulated markets that are changing market rules to differentiate the quality of frequency regulation delivered by various technologies. The United States Federal Energy Regulatory Commission has issued Order 755 (commonly referred to as the commission’s Pay for Performance order) with the purpose of making the market more efficient, encouraging high-quality vendors to the market, and reducing the amount of frequency regulation required by the market, all else being equal.

This Pike Research report analyzes the global market for frequency regulation including capacity supplied by coal power plants, natural gas power plants, nuclear power plants, and energy storage systems. The report provides a comprehensive assessment of the demand drivers, business models, policies, and technology issues associated with the frequency regulation market. Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by technology and region, extend through 2022.

Key Questions Addressed:

• What is frequency regulation?
• How is frequency regulation delivered?
• What are the key market structures affecting how much frequency regulation is worth?
• What are the key differences between the North American, European, and Asian markets?
• What key market conditions will affect the frequency regulation market over the next 10 years?
• How will more aggressive economic growth affect the frequency regulation market?

Who needs this report?

• Renewable energy technology providers and project developers
• Energy storage technology vendors and integrators
• Battery manufacturers and component providers
• Utilities
• Government agencies
• Investor community

Table of Contents

1.      Executive Summary

1.1  Introduction

1.2  Market Issues

1.3  Technologies

1.4  Market Forecast

2.      Market Issues

2.1  What Are Ancillary Services?

2.2  What Is Frequency Regulation?

2.3  Key Market Conditions

2.3.1    Regulated Markets and Technology Mix

2.3.2    Deregulated Markets and Technology Mix

3.      Markets by Region

3.1  Broad Regional Comparison

3.2  North America

3.2.1    Energy Mix

3.2.2    Pay for Performance

3.3  Europe

3.3.1    European Grid System

3.3.2    Technical Requirements

3.4  Asia Pacific

3.4.1    Korea

3.4.2    China

3.4.3    India

3.5  Rest of World

4.      Technology Issues

4.1  Introduction

4.2  Flywheels

4.2.1    Basic Principles

4.2.2    Strengths and Weaknesses

4.2.3    Issues Related to Cost

4.3  Lead-Acid Batteries

4.4  Advanced Lead-Acid Batteries

4.5  Pumped Storage

4.5.1    Overview

4.5.2    Applications

4.5.3    Issues Related to Cost

4.6  Sodium-Sulfur Batteries

4.6.1    Overview

4.6.2    Applications

4.6.3    Issues Related To Cost

4.7  Lithium ion Batteries

4.7.1    Overview

4.7.2    Leading Chemistries

4.7.3    Summary of Developments

4.7.4    Efficiency and Capacity

4.7.5    Issues Related to Cost

4.8  ESS for Ancillary Services Technology Comparison

4.9  ESS for Ancillary Services Costs

5.      Key Industry Players

5.1  Grid operators

5.1.1    TEPCO (Tokyo Electric Power Company)

5.1.2    KPX (Korea Power Exchange)

5.1.3    ERCOT

5.1.4    PJM

5.1.5    Energinet

5.2  Flywheels

5.2.1    Active Power

5.2.2    Amber Kinetics

5.2.3    Beacon Power

5.2.4    Vycon

5.3  Advanced Lead-Acid Batteries

5.3.1    East Penn Manufacturing

5.3.2    Panasonic

5.3.3    Xtreme Power

5.4  Lithium Ion

5.4.1    A123 Systems

5.4.2    Altairnano

5.4.3    Saft Batteries

5.5  NaS Batteries: NGK Insulators

5.6  Pumped Storage

5.6.1    Black & Veatch

5.6.2    HDR

5.6.3    MWH Global

5.7  Energy Storage Value-Add Players

5.7.1    AES Energy Storage

5.7.2    NYSERDA

6.      Market Forecasts

6.1  Key Market Conditions

6.2  Scenarios: Average and Aggressive

6.3  Methodology

6.3.1    Revenue

6.3.2    Model

6.4  Global Market Forecast

6.5  North America

6.6  Europe

6.7  Asia Pacific

7.      Company Directory
8.      Acronym and Abbreviation List
9.      Table of Contents
10.    Table of Charts and Figures
11.      Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

• Coal-Fired Power Plant Following the AGC Regulation Command Signal
• Commercial Flywheel Performance
• The European Grid’s Five Synchronous Areas: 2009
• Fingrid Regulation Up and Regulation Down Prices for 2011
• World Energy Consumption: 1990-2035
• Diagram of Electric Power Supply and Demand, Korea: 2010
• Korea’s Smart Grid Roadmap
• Advanced Lead-Acid Battery Cycle Life Comparison to Other Advanced Batteries
• Schematic of Pumped Storage
• Planned Pumped Storage Facilities in the United States
• Integrating Wind with Pumped Storage Shaping Wind Variability
• Schematic of Sodium-Sulfur Battery Technology
• Core NaS Application: Conventional Energy Time Shifting or Peak Shaving
• Frequency Regulation Market Revenue, Average and Aggressive Scenarios, World Markets: 2012-2022
• Electricity Production by Fuel Type, United States: 2008
• Generation Capacity by Fuel Type, South Korea: 2001-2012
• Electricity Production, by Fuel Type, China: 2008
• Total Frequency Regulation Market by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Market by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Market Revenue by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Market Revenue by Region, World Markets, Aggressive Scenario: 2012-2022
• Frequency Regulation Market Revenue, Average and Aggressive Scenario, North America: 2012-2022
• Total Frequency Regulation Capacity by Technology, Average Scenario, North America: 2012-2022
• Total Frequency Regulation Capacity by Technology, Aggressive Scenario, North America: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Western Europe: 2012-2022
• Total Frequency Regulation Capacity by Technology, Average Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Capacity by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Capacity by Technology, Average Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Capacity by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Market Revenue, Aggressive Scenario, World Markets:  2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Latin America: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Eastern Europe: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Middle East: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Africa: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, World Markets: 2012-2022

List of Tables

• Summary of Key Market Conditions in the Frequency Regulation Market
• Summary of Select Ancillary Service Markets and Characteristics
• Summary of Key Markets and Drivers and Market Characteristics, Select Countries
• Summary of Market Structures, ISOs versus Vertically Integrated Markets
• Summary of U.S. Grid Operators, Capacity, Ancillary Services Considered, and  Payments, as Available
• Fingrid Regulation Up and Regulation Down Minimum, Maximum, and Average  Prices for 2011
• Summary of European Grid Operators, Capacity, Ancillary Services Considered, and Payments, as Available
• Technical Comparison of Primary Frequency Control, Parameters in Various Systems: 2007
• Summary of Asia Pacific Grid Operators, Capacity, Ancillary Services Considered, and Payments, as Available
• South Korea’s Energy Consumption and Imports
• China Southern Grid Frequency Regulation Payment Structure
• Summary of Rest of World Grid Operators, Capacity, Ancillary Services Considered, and Payments, as Available
• Characteristics of Li-ion Battery Chemistries
• ESG Technology Strengths and Weaknesses
• Storage Characteristics by Application and Technology
• Active Power SWOT Analysis
• Amber Kinetics SWOT Analysis
• Beacon Power SWOT Analysis
• Vycon SWOT Analysis
• East Penn Manufacturing SWOT Analysis
• Panasonic SWOT Analysis
• Xtreme Power SWOT Analysis
• A123 Systems SWOT Analysis
• Altairnano SWOT Analysis
• Saft Batteries SWOT Analysis
• NGK Insulators SWOT Analysis
• Black & Veatch SWOT Analysis
• HDR SWOT Analysis
• MWH SWOT Analysis
• AES Energy Storage SWOT Analysis
• NYSERDA SWOT Analysis
• Summary of Key Market Conditions in the Frequency Regulation Market
• Pike Research Forecast Methodology Drivers
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, North America: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, North America: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, North America: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, North America: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, North America: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, North America: 2012-2022
• Frequency Regulation Capacity, North America, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, North America: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, North America: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, North America: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Western Europe: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Western Europe: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Western Europe: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Western Europe: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Western Europe: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Frequency Regulation Capacity, Western Europe, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Capacity, Asia Pacific, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Latin America: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Latin America: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Latin America: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Latin America: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Latin America: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Latin America: 2012-2022
• Frequency Regulation Capacity, Latin America, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Latin America: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Latin America: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Latin America: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Capacity, Eastern Europe, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Middle East: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Middle East: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Middle East: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Middle East: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Middle East: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Middle East: 2012-2022
• Frequency Regulation Capacity, Middle East, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Middle East: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Middle East: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Middle East: 2012-2022
• Annual Growth of Frequency Regulation Market by Technology, Average Scenario, Africa: 2012-2022
• Frequency Regulation Capacity by Technology, Average Scenario, Africa: 2012-2022
• Frequency Regulation Delivered by Technology, Average Scenario, Africa: 2012-2022
• Frequency Regulation Cost by Technology, Average Scenario, Africa: 2012-2022
• Frequency Regulation Revenue by Technology, Average Scenario, Africa: 2012-2022
• Frequency Regulation Capacity by Technology, Aggressive Scenario, Africa: 2012-2022
• Frequency Regulation Capacity, Africa, Aggressive Scenario: 2012-2022
• Frequency Regulation Delivered by Technology, Aggressive Scenario, Africa: 2012-2022
• Frequency Regulation Cost by Technology, Aggressive Scenario, Africa: 2012-2022
• Frequency Regulation Revenue by Technology, Aggressive Scenario, Africa: 2012-2022
• Total Frequency Regulation Market by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Average Scenario, World Markets: 2012-2022
• Total Frequency Regulation Market by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Aggressive Scenario, World Markets: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, North America: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Latin America: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Eastern Europe: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Middle East: 2012-2022
• Total Frequency Regulation Market by Technology, Average Scenario, Africa: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, North America: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, Latin America: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Total Frequency Regulation Market, by Technology Aggressive Scenario, Middle East: 2012-2022
• Total Frequency Regulation Market by Technology, Aggressive Scenario, Africa: 2012-2022
• Total Frequency Regulation Market Revenue by Region, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Market Revenue, Average Scenario, World Markets: 2012-2022
• Total Frequency Regulation Market Revenue by Region, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Coal Power Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Natural Gas Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Nuclear Power Plants by Region, Market Revenue, Aggressive Scenario, World Markets: 2012-2022
• Frequency Regulation Delivered by Energy Storage Systems by Region, Market Revenue, Aggressive Scenario, World Markets:  2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, North America: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Latin America: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Eastern Europe: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Middle East: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Average Scenario, Africa: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, North America: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Western Europe: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Asia Pacific: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Latin America: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Eastern Europe: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Middle East: 2012-2022
• Total Frequency Regulation Market Revenue by Technology, Aggressive Scenario, Africa: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, North America: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Western Europe: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Asia Pacific: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Latin America: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Eastern Europe: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Middle East: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, Africa: 2012-2022
• Total Frequency Regulation Market Revenue, Average and Aggressive Scenarios, World Markets: 2012-2022