Feasibility of a bilateral market for load following

In the ongoing process to create a competitive electricity market, the problem of ancillary services is assuming a fundamental role. Ancillary services are those services performed by generators, transmission and control equipment, which are necessary to support basic services and to maintain reliable operations and system security. In this paper, we focus our attention on one of these services, load following, and propose a competitive way to provide this service through bilateral contracts between supplier and customer. In general, we assume that there will be both a competitive market for the provision of load following and an authority responsible for the amount of load following not met by bilateral contracts.