Ancillary Services for Power

Global Ancillary Services for Power Market to Reach US$13.5 Billion by 2030

The global market for Ancillary Services for Power estimated at US$9.0 Billion in the year 2024, is expected to reach US$13.5 Billion by 2030, growing at a CAGR of 6.9% over the analysis period 2024-2030. Frequency Controlled Ancillary Services, one of the segments analyzed in the report, is expected to record a 8.2% CAGR and reach US$8.7 Billion by the end of the analysis period. Growth in the Network Controlled Ancillary Services segment is estimated at 4.5% CAGR over the analysis period.

The U.S. Market is Estimated at US$2.5 Billion While China is Forecast to Grow at 11.1% CAGR

The Ancillary Services for Power market in the U.S. is estimated at US$2.5 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$2.8 Billion by the year 2030 trailing a CAGR of 11.1% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 3.3% and 6.8% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 4.6% CAGR.

Global Ancillary Services for Power Market – Key Trends & Drivers Summarized

Why Are Ancillary Services Becoming Critical for Power Grid Stability in an Era of Renewable Integration?
Ancillary services are gaining strategic importance in power markets worldwide as grid operators grapple with the variability and decentralization introduced by large-scale renewable energy adoption. These services—encompassing frequency regulation, voltage control, spinning and non-spinning reserves, black start capability, and reactive power support—are essential for maintaining grid reliability, operational security, and power quality. As solar, wind, and other intermittent sources replace traditional synchronous generators, the inherent inertia and reactive power support once provided by thermal plants is diminishing, creating a gap that must be filled by fast-responding, flexible ancillary service resources. Grid operators are increasingly relying on advanced technologies such as battery energy storage systems (BESS), demand response programs, and fast-ramping gas turbines to meet these needs in real time.

The global push toward decarbonization and energy transition is accelerating the demand for ancillary services as renewable penetration crosses thresholds where traditional grid balancing methods become insufficient. Markets like the U.S., Germany, Australia, and parts of China are witnessing a paradigm shift where non-traditional assets—such as distributed energy resources (DERs), aggregated virtual power plants (VPPs), and inverter-based technologies—are actively participating in ancillary service markets. This shift reflects a structural evolution in grid operations, from centralized dispatch to decentralized, dynamic balancing mechanisms. As the generation fleet transforms and energy market structures evolve, ancillary services are no longer viewed as peripheral support—they are becoming the backbone of modern, renewables-heavy power systems.

How Are Market Design and Technology Advancements Transforming Ancillary Services Procurement?
Market liberalization, real-time trading platforms, and updated grid codes are redefining how ancillary services are procured, priced, and delivered. Many system operators are moving toward unbundled, market-based procurement models that allow a wider array of participants—beyond traditional generators—to bid into ancillary service markets. These reforms are enabling independent power producers (IPPs), industrial consumers, battery operators, and aggregator platforms to monetize grid support capabilities in response to dynamic pricing signals. Real-time balancing markets, frequency containment reserves (FCR), and fast frequency response (FFR) schemes are gaining traction, particularly in regions with high renewable shares. Time-of-use compensation, performance-based payments, and multi-product bidding structures are further enhancing economic viability for ancillary service providers.

Technological progress is also expanding the types of assets that can contribute to ancillary services. Utility-scale BESS, with sub-second response times and modular deployment, are being deployed for frequency regulation, voltage support, and spinning reserve substitution. Advanced inverter controls on solar PV systems and wind farms are enabling synthetic inertia and reactive power injection—functions once exclusive to fossil fuel plants. Artificial intelligence (AI) and predictive analytics are improving system operators’ ability to forecast imbalances and dispatch resources proactively. Moreover, distributed demand-side resources—such as smart thermostats, EV charging stations, and industrial loads—are being aggregated and orchestrated via energy management systems to provide responsive capacity on par with traditional assets. These market and technology innovations are broadening the ancillary services supply base while increasing flexibility, speed, and cost-efficiency in grid balancing.

Where Is Demand Accelerating and Which Resource Types Are Gaining Market Share?
Demand for ancillary services is accelerating most rapidly in regions experiencing high renewable penetration, aging grid infrastructure, or increasing electrification of transport and heating. In the United States, regional transmission organizations (RTOs) and independent system operators (ISOs) like PJM, CAISO, and ERCOT are expanding ancillary service programs to accommodate variable renewable generation and manage load ramping challenges. In Europe, countries such as Germany, the U.K., and Denmark are integrating BESS and distributed flexibility into ancillary frameworks to stabilize their increasingly wind- and solar-dominated grids. Australia’s National Electricity Market (NEM) is also emerging as a benchmark for incorporating fast frequency response and battery-backed inertia solutions into ancillary markets.

Battery energy storage is the fastest-growing resource type in ancillary services, particularly for frequency regulation, fast reserves, and inertia substitution. Lithium-ion battery deployments are being optimized to participate in multiple value streams, including energy arbitrage and ancillary services stacking. Gas peakers and hybrid gas-plus-storage systems continue to play a role in providing contingency and ramping reserves, especially in regions with limited storage penetration. Wind and solar operators are increasingly being required—or incentivized—through grid codes to provide synthetic inertia, voltage ride-through, and reactive power support using power electronics. Additionally, demand-side participation via aggregators and industrial flexibility providers is gaining traction in delivering non-spinning reserves and primary frequency response, particularly during grid stress events. As regulatory frameworks mature and interoperability improves, the pool of ancillary service contributors is becoming more diverse, modular, and real-time responsive.

What Is Driving the Global Expansion of the Ancillary Services for Power Market?
The growth in the ancillary services for power market is driven by several factors, including rising renewable penetration, grid modernization imperatives, and the evolution of energy markets toward flexibility and decentralization. One of the most critical drivers is the declining inertia and dispatchability of power systems due to the replacement of traditional baseload plants with intermittent renewable energy. This shift is creating a structural need for fast-acting, digitally orchestrated services to maintain system stability and reliability. At the same time, the proliferation of distributed energy resources (DERs) and smart grid technologies is enabling more granular, dynamic participation in ancillary markets, opening new monetization channels for flexible assets.

Policy support and regulatory reform are also accelerating market development. Governments and system operators are updating grid codes, introducing capacity payment mechanisms, and creating co-optimized markets where energy and ancillary services are procured together. Investments in digital infrastructure, AI-enabled grid forecasting, and energy storage deployment are further enhancing the precision and responsiveness of ancillary services. Moreover, the global electrification push—including electric vehicles, heat pumps, and industrial electrification—is amplifying grid volatility, thereby increasing the need for advanced ancillary capabilities. As these drivers converge, the ancillary services market is transitioning from a hidden operational layer to a high-value, strategically critical segment of the power system—raising the question: Can ancillary services evolve quickly enough to anchor the stability of tomorrow’s decentralized, decarbonized electricity grids?

SCOPE OF STUDY:

The report analyzes the Ancillary Services for Power market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Service Type (Frequency Controlled Ancillary Services, Network Controlled Ancillary Services, Other Service Types); Application (Frequency Regulation, Voltage Compensation, Renewable Integration, Operational Management, Other Applications); End-Use (Residential, Commercial, Industrial)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.

Select Competitors (Total 43 Featured) -

• ABB Ltd.
• AES Corporation
• Alberta Electric System Operator
• California Independent System Operator (CAISO)
• Dominion Energy, Inc.
• Duke Energy Corporation
• EDF Energy
• Elia Group
• Enel S.p.A.
• Energinet
• Engie SA
• ERCOT (Electric Reliability Council of Texas)
• Exelon Corporation
• General Electric Company
• Hitachi Energy
• Iberdrola S.A.
• Independent Electricity System Operator (IESO)
• Invenergy
• ISO New England (ISO-NE)
• Midcontinent Independent System Operator (MISO)

TARIFF IMPACT FACTOR

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