SPP’s Ancillary Services explained: Why it matters for batteries
SPP's Ancillary Services are beginning to see batteries participate.
The RTO’s first major grid-scale projects began commercial operations in 2025. By December, these assets made up 8% of Regulation Up procurements - the highest paying product at $13.50/MW.
Batteries are well-positioned to displace slower thermal generators across these services. The best performing portfolios will understand how these products work, and how to navigate the opportunity during these early days in the market.
Read on to learn:
- How Ancillary Service products regulate SPP’s grid.
- How big the opportunity is.
- And how batteries can act on it.
Note: Longer reliability contracts procured outside the wholesale market, like Black Start and Voltage Control, are not discussed in this article
1. What are SPP's Ancillary Services?
SPP procures four Ancillary Service products through competitive offers in its wholesale market: Regulation Up, Regulation Down, Spinning Reserves and Supplemental Reserves.
Three additional products - Ramping Up, Ramping Down, and Uncertainty Up - do not accept offers. SPP selects generators economically for these additional services based on their energy offer curves.
This means battery operators do not explicitly compete in these services.
2. How do Ancillary Services work in SPP
SPP, like all North American power systems, must maintain its frequency at 60 Hz. Deviations can cause equipment damage or blackouts.
Ancillary Services work in tandem to ensure this happens.
How does Regulation work?
Regulation Up reserves capacity to increase generation during shortfalls. Regulation Down reduces generation when there’s a surplus.
These services work to adjust minor system imbalances.
Regulations clears every five minutes. Within those intervals, batteries follow four-second Automated Generator Control (AGC) signals to adjust their output. This keeps the system in balance.
These products pays generators for both the capacity they reserve to provide the service, and for mileage.
Mileage is the displacement in the generator's output when providing Regulation. These payments are adjusted by a performance multiplier capturing how accurately the resource followed instructions.
Batteries submit separate offer curves for Capacity and Mileage.
How do Reserves work?
Spinning and Supplemental Reserves are used to correct larger imbalances. SPP deploys Reserves during unexpected generator and transmission outages.
For Spinning Reserves, generators must be online and dispatchable within 10 minutes.
Supplemental Reserves hold the same 10-minute dispatch requirement, but do not require synchronization, allowing offline generators to participate.
Batteries qualify for both.
The only caveat: batteries must have enough state-of-charge to sustain the reserved capacity for 60 minutes.
3. How much does each Ancillary Service pay?
Regulation Up has consistently been SPP's highest-paid Ancillary Service. Since 2023, the service has cleared at an average of $13.50/MW, 2.5 times higher than other products.
Spinning Reserve follows at $5.40/MW, with Regulation Down at $4/MW. Supplemental Reserve, despite clearing the largest monthly volumes, averages just $1.30/MWh.
The pricing hierarchy across these Ancillary Services reflects response-time scarcity.
Only a narrow subset of SPP's thermal fleet can follow the sub-minute signals required for Regulation.
Regulation Up helps resolve shortfalls in SPP’s forecasted wind production, where thermal generators require longer ramp times.
In contrast, Reserves draws on a much broader pool of online and offline capacity with 10-minute response, keeping marginal costs near zero for most hours.
4. How big is the Ancillary Service market in SPP?
SPP procured 1,400 MW of Reserve capacity and 500 MW of each Regulation product during 2025.
Reserve margins are set at the largest loss the system could experience in any given interval.
For SPP, that loss is almost always a large thermal unit. Coal units at facilities like Jeffrey Energy Center, Oklaunion, and Gentleman each provide 600-700 MW. Wolf Creek, SPP's lone nuclear unit, contributes roughly 1,200 MW. These generators set the Reserve requirement.
Regulation scales with load and wind forecast error
SPP sets the Regulation requirement at 1% of forecasted peak load, plus a variable energy-component that scales with wind variability.
Unlike Reserves, Regulation requirement have visible intraday shape. Procurement dips overnight when load is lowest and stable, then rises midday and into the evening as load climbs and ramps get steeper.
5. How wholesale offers are cleared in SPP
SPP procures Ancillary Services in two stages.
The Day-Ahead Market clears Regulation, Reserves, Ramp, and Uncertainty alongside energy by 4pm a day before delivery, based on offers submitted by 11 am.
The Real-Time Balancing Market re-clears all products every five minutes on the day, adjusting awards to actual system conditions.
Strategic takeaway for BESS: SPP’s Ancillary Service markets provide an opportunity for early battery participants. BESS are well-placed to displace existing thermal generation. Early entrants can benefit from higher clearing prices in Regulation before saturation takes.
