How does SMD impact the regulation market?
Under the original market in New England, automatic generation control (AGC) sets the proper flow and frequency across the region in order to provide moment-by-moment balancing of generation and demand on the system and maintain the 60 Hertz frequency. In cases of either inadequate or excess instantaneous supply, generators within a control area increase or decrease generation to restore the energy balance within the control area. Generators are provided financial incentive to ramp-up or back-down their generation in order to maintain this frequency. With the implementation of SMD, this market becomes know as “regulation.” ISO New England continuously monitors the system’s balance. As this monitoring signals excess or under generation, generators are called upon and compensated for reestablishing frequency balance.
