Contingency Reserve Obligation
A contingency reserve obligation specifies the amount of spinning and supplemental reserves that balancing authorities must carry to cover sudden generator or transmission outages. Obligations are defined by reliability standards such as NERC BAL-002 and ensure that enough synchronized capacity exists to arrest frequency deviations.
System operators allocate reserve obligations among market participants based on load or generation share, enforcing compliance through penalties. With high renewable penetration, operators increasingly allow storage and demand response to provide contingency reserves.
Understanding reserve obligations helps developers size storage projects and design hybrid dispatch strategies that capture reserve revenues while meeting energy commitments.
Regulators review reserve calculations during resource adequacy reforms to ensure reliability targets align with changing grid dynamics.
Technical Details
- •Expressed as MW or percentage of load/generation
- •Includes spinning, non-spinning, and supplemental reserve categories
- •Compliance monitored via telemetry and event performance
- •Allows qualified storage and demand response participation
- •Tied to reliability standards such as NERC BAL-002
Why It Matters
Reserve obligations drive ancillary service demand and impact capacity accreditation. Tera catalogs reserve requirements, eligible technologies, and penalty regimes so developers can monetize fast-response assets.
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