ISO-NE’s expanded day-ahead market goes live this month
ISO New England’s Day-Ahead Ancillary Services Market, designed to ensure sufficient energy and reserves to meet customer demand throughout the operating day, goes live Feb. 28. The launch will give the power grid greater flexibility as the region increasingly relies on weather-dependent resources and further electrifies heating and transportation.
The Day-Ahead Ancillary Services Market will compensate resources for providing required energy and reserve capabilities beyond what is scheduled in the existing Day-Ahead Energy Market. The market will provide strong performance incentives to participating resources, such as dispatchable generators and storage resources, to be prepared to provide energy when the power system experiences sudden shifts in demand or unexpected reductions in supply.
The new market, which is the culmination of the ISO’s Day-Ahead Ancillary Services Initiative (DASI), replaces the region’s Forward Reserve Market. DASI’s recommended reforms were accepted by the Federal Energy Regulatory Commission (FERC) in January 2024. FERC’s acceptance order applauded the initiative, saying the new Day-Ahead Ancillary Services Market “will materially improve operating reserve resource readiness, efficiency, and day-ahead price formation in ISO-NE without undue increases in wholesale market costs.”
Ancillary services are a relatively small proportion of the region’s wholesale electricity markets, but are vital to the grid’s short-term reliability. They are generally designed to compensate for short-term fluctuations in supply and demand—a type of “insurance policy” that protects the grid against unexpected outages or increases in demand. Ancillary services help ensure reliability when, for example, renewable resources like solar and wind provide less energy than is typical of the season or the day-ahead forecast due to cloud cover, lower wind conditions, or other factors.
As with other ISO market reforms, the operation of the Day-Ahead Ancillary Services Market will be assessed by the ISO’s Internal Market Monitor, which reports on the competitiveness and performance of major market design changes.
ISO New England will host an informational webinar for market participants at 1 p.m. on Feb. 12. Registration and additional information is available via ISO-TEN.
