Inverter fast frequency response is a low-cost alternative to system inertia

New research from Yamit Lavi (EPP Ph.D. '23) and Jay Apt tackles the critical issue of maintaining grid stability in electric grids with a high penetration of utility-scale inverter-based resources (IBRs) like wind, solar, and batteries. As these systems become more prevalent, they often exhibit lower system inertia, necessitating additional measures for frequency support.

One traditional response to this challenge has been to keep conventional synchronous generators operational to ensure an adequate level of system inertia. However, this approach can limit the number of IBRs that can be integrated into the grid, potentially increasing system emissions. An alternative solution explored by Lavi and Apt is the potential of IBRs to provide fast frequency response (FFR) at a competitive cost. If IBRs can offer this service economically, it could reduce the reliance on conventional generators for system inertia, facilitating higher IBR penetration.

To investigate the feasibility and economic implications of implementing an FFR requirement for utility-scale IBRs, the researchers employed a unit commitment and economic dispatch (UCED) model. Their study focused on the Electric Reliability Council of Texas (ERCOT) ancillary service market, aiming to assess the competitiveness of various resources, including wind, solar, batteries, and thermal generators, under different scenarios.

Under the conditions observed in 2020, which featured a relatively low penetration of IBRs, introducing an FFR requirement had notable effects. Energy prices increased by 7%, and the associated FFR cost approached the price of energy itself. This situation indicated the challenges associated with implementing FFR in a low-IBR environment.

However, when considering the conditions expected for 2025, with a higher IBR penetration, the dynamics changed significantly. In this scenario, the introduction of an FFR requirement did not lead to changes in energy or reserve prices, and the FFR cost dropped to approximately $0.3/MWh. Importantly, FFR proved to be an effective replacement for the need for inertia, and it did not come with any additional cost in today's markets. 

The research's key finding is that FFR, particularly under conditions of high IBR penetration, presents a cost-effective alternative to traditional inertia-based solutions. This suggests that policies should be developed to incentivize IBRs to provide FFR services, as this could facilitate the integration of more renewable resources into the grid without compromising stability or increasing emissions.

Lavi and Apt's study underscores the importance of considering fast frequency response as a valuable contribution from IBRs to grid stability. Their findings highlight the economic advantages of such a shift, especially in a future energy landscape characterized by increased reliance on renewable resources.