Power Ancillary Services Market is Expected to grow at a robust CAGR of 25.83% through 2030F
The increasing global power ancillary
services market is driven by shift toward energy storage-based ancillary
services, emergence of aggregated DERs and Virtual Power Plants during the
forecast period 2026-2030F.
According to TechSci Research report, “Power Ancillary Services Market – Global
Industry Size, Share, Trends, Competition Forecast & Opportunities, 2020-2030F”, The
Global Power Ancillary Services Market was valued at USD 2.71 Billion in 2024
and is expected to reach USD 10.85 Billion by 2030 with a CAGR of 25.83% during
the forecast period. The growing use of battery energy storage systems (BESS)
for ancillary services is reshaping the market. These systems offer
rapid-response capabilities, modular deployment, and increasingly competitive
prices, making them ideal for applications such as frequency regulation,
spinning reserves, and black start support. Traditionally, ancillary services
were dominated by fossil-fueled generators, but the need for flexibility and
decarbonization is pushing grid operators toward cleaner alternatives. Many countries
now mandate or incentivize storage deployment in grid balancing. For example,
California ISO integrated over 5 GW of storage capacity into its ancillary
services market in 2023. In the UK, National Grid’s Dynamic Containment program
pays premium rates for ultra-fast response services, favoring storage
solutions.
Australia’s Hornsdale Power Reserve has
already proven the economic and operational benefits of BESS in reducing
frequency response costs. Furthermore, as lithium-ion battery prices have
fallen below USD140/kWh and system efficiency exceeds 85%, developers are
scaling up multi-GWh projects. Beyond standalone systems, hybrid
storage-renewable plants are increasingly configured to offer grid services,
enabling utilities to use a single asset for multiple value streams. This trend
is expected to accelerate as regulatory frameworks evolve to recognize and
reward the multifunctional role of energy storage in modern power systems.
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Power Ancillary Services Market"
Based on Type of Service, Spinning
Reserve is the fastest growing segment in the global Power Ancillary Services market
during the forecast period, due to increasing grid reliability requirements and
rising deployment of variable renewable energy sources. Spinning reserves are
online but unloaded generation resources that can respond instantly to power
system disturbances, making them essential in preventing frequency collapses or
blackouts during sudden demand surges or generation losses. As the share of
wind and solar energy grows globally—now accounting for over 30% of power
generation in some major economies—grid operators are requiring larger,
faster-responding reserves to maintain stability. Unlike frequency regulation,
which corrects minor deviations, spinning reserves act as immediate backup for
system imbalances. This has become especially critical as traditional baseload
plants are being retired or run less frequently in favor of cleaner but
intermittent sources.
Emerging technologies like battery energy storage
systems (BESS) are now being integrated into spinning reserve functions due to
their rapid dispatch capability, especially in the U.S., China, and parts of
Europe. In fact, in markets such as California ISO and ERCOT, storage now makes
up a growing portion of spinning reserve resources. Additionally, flexible gas
turbines and demand response aggregators are contributing to spinning reserve
pools with greater reliability and control. The growing need for grid
flexibility, especially in renewable-rich grids, along with enhanced digital
control systems and market participation by new resource types, is fueling
growth in this segment. Government mandates, capacity payment mechanisms, and
growing participation of hybrid power plants are also contributing to the
fast-paced development of spinning reserve services. As power grids become more
dynamic and decentralized, spinning reserves will remain an indispensable tool
for operational stability, making this segment a focal point of market
expansion.
Based on region, Asia Pacific is the
fastest growing region in the Global Power Ancillary Services Market during the
forecast period driven by rapid urbanization, increasing electricity demand, and
aggressive renewable energy expansion. Countries like China, India, Japan,
South Korea, and Australia are leading efforts to transition toward clean
energy, resulting in a growing need for ancillary services to ensure grid
stability. With rising reliance on variable energy sources such as wind and
solar, maintaining frequency, voltage, and reserve capacity has become
increasingly important. China, the world's largest power producer and consumer,
is heavily investing in ancillary services. It has integrated over 430 GW of
wind and solar capacity and is now expanding its energy storage fleet to
provide frequency regulation and spinning reserves. The Chinese government has
mandated the inclusion of energy storage systems in all new renewable projects,
ensuring a rapid expansion of ancillary service capabilities.
India is also developing its ancillary service
framework under the direction of the Central Electricity Regulatory Commission
(CERC), introducing market-based mechanisms for frequency and balancing
services. With a goal of reaching 500 GW of non-fossil energy capacity by 2030,
India is fostering a supportive regulatory and technical environment for
ancillary services growth. Japan and South Korea are focusing on smart grid
development, digitization, and battery storage integration to enhance voltage
and frequency control. Australia’s deployment of large-scale battery systems
like the Hornsdale Power Reserve is setting global benchmarks for response
speed and cost efficiency. Additionally, Asia Pacific’s strong focus on smart
grid technologies, rising smart meter adoption, and increased investment in
digital substation infrastructure support real-time ancillary service
participation. The presence of large industrial consumers also opens up
opportunities for demand response and flexible load services. All these
factors, combined with ambitious decarbonization targets, make Asia Pacific the
most dynamic and rapidly expanding market for ancillary services globally.
Key market players in the Global Power
Ancillary Services market are: -
- General Electric
- Siemens Energy
- ABB Ltd.
- Schneider Electric
- Hitachi ABB Power Grids
- Tesla, Inc.
- AES Corporation
- Enel X
- ENGIE
- NextEra Energy
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“The global power ancillary services market offers vast
opportunities due to accelerating renewable energy integration, growing
investments in grid modernization, and increasing deployment of energy storage
systems. Emerging technologies like virtual power plants, AI-based grid
management, and advanced metering infrastructure are opening new avenues for
efficient service delivery. Regulatory reforms enabling greater participation
from aggregators, DERs, and demand response providers further expand market potential.
Additionally, developing economies are creating structured ancillary service
markets, offering untapped opportunities for technology providers, investors,
and grid operators. These trends position ancillary services as a critical
enabler for resilient, flexible, and decarbonized power systems worldwide.Top
of Form” said
Mr. Karan Chechi, Research Director of TechSci Research, a research-based Global
management consulting firm.
“Power
Ancillary Services Market - Global Industry Size, Share, Trends, Opportunity,
and Forecast, Segmented By Type of Service (Frequency Regulation, Spinning
Reserve, Non-Spinning Reserve, Black Start Services, Others), By Source Type
(Conventional Power Plants, Renewable Energy Sources, Energy Storage Systems,
Others), By End User (Transmission System Operators (TSOs) / Grid Operators,
Independent Power Producers, Utilities, Large Industrial & Commercial
Consumers, Others), By Region &Competition, 2020-2030F,” has evaluated the future
growth potential of Global Power Ancillary Services Market and provides
statistics & information on market size, structure, and future market
growth. The report intends to provide cutting-edge market intelligence and help
decision makers take sound investment decisions. Besides the report also
identifies and analyzes the emerging trends along with essential drivers,
challenges, and opportunities in Global Power Ancillary Services Market.
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