Feasibility of a bilateral market for load following

In the ongoing process to create a competitive electricity market, the prob lem of Ancillary Services is assuming a fundamental role. Ancillary Service s are those services performed by generators, transmission and control equi pment, which are necessary to support basic services and to maintain reliab le operations and system security. In this paper, we focus our attention on one of these services, load following, and propose a competitive way to pr ovide this service through bilateral contracts between supplier and custome r. In general, we assume that there will be both a competitive market for t he provision of load following and an authority responsible for the amount of load following not met by bilateral contracts.