Analysis of different methods to calculate tertiary regulation reserves for renewable energy in Japan

Regulation reserves designed to compensate for renewable energy power generation unexpected shortfalls are being implemented around the world. In Japan, since 2021, the balancing market has a specific type of tertiary power regulation reserve to mitigate the effects of day-ahead forecasting errors of renewable energy systems. However, the cost of these reserves is quite high, and it is not clear how effective they are. In this study, we provide one of the first comprehensive analysis of the efficacy of a regulation reserve designed to compensate for renewable power generation shortfalls, that is currently in use in national scale. To do that, we used three years of real data provided by one of the largest TSOs in Japan. Moreover, through the study we identified issues with the current reserve calculation methodology, and proposed two modifications to it, to mitigate these issues. The use of the modifications resulted in more effective reserves. For example, for 2021, the proposed modifications yielded reserves that covered shortfalls of renewable based power generation 78.7% of the time while reaching annually 2.3 TWh. This was approximately 7% higher coverage than the one achieved by the method currently in use, while requiring almost 30% less reserves than what it prescribed. Furthermore, the proposed modifications resulted in reductions in the largest values of hourly deficits of reserves in some cases. As such, they constitute good options to properly estimate the RR-FIT.