Possible design of the Brazilian ancillary service market for generation reserves

This paper deals with the possibility of the supply of generation reserve be considered an ancillary service in the Brazilian system. The hydroelectric nature of the generating units, the energy market design and the Independent System Operator (ISO) rules for reserves are taken into account. Important aspects such as reserve types, reserve requirements, reserve allocation are addressed in order to form the basis for establishing the future market. The proposed method for reserve procurement and reserve selling is based on the Rational Buyer's method and includes several important features. The computational algorithm used to find the solution is fast enough to be adequate for a system with two hundred generators bidding for the one-hour ahead market.