Ancillary services — frequency response, reserves and voltage support — are emerging as the primary revenue source for grid batteries in emerging markets, and regulators are formalising the products, procurement and payment rules that make those revenues bankable.

Batteries respond faster and more precisely than thermal plants, so system operators facing more variable generation are turning to them first for stability. But revenue depends on rules: what services exist, how they are procured, and whether payments are firm.

What regulators are doing

Defining fast-frequency-response and reserve products, opening competitive procurement to storage, setting availability-based payments and, in some markets, creating markets rather than bilateral contracts. Where products are undefined, batteries earn little; where they are clear, projects finance. See our BESS tender guide.

Implications for the supply chain

Specifications emphasise response time, accuracy, cycling capability and communications with the control centre; metering and market-interface systems become part of the delivery. Follow developments in our storage section.

Background: batteries earn from services, not just energy

A battery’s most valuable attribute is speed: it can respond to a frequency deviation in milliseconds, provide reactive power and voltage support, and shift energy between hours. In mature markets such as Great Britain, Australia and the US PJM region, frequency response and other ancillary services were the first revenue streams that made grid-scale storage bankable. Emerging-market systems mostly lacked such products — the state utility provided reserves from its own plants — so early storage projects relied on capacity payments in tenders. Regulators are now defining ancillary-service products and payment rules, drawing on guidance from the IEA, IRENA and the World Bank’s ESMAP storage programme.

What regulators are doing, in more detail

• Defining products. Primary, secondary and tertiary reserve, fast frequency response, voltage support and black start are being written into grid codes and market rules.
• Setting payment mechanisms. Availability payments, competitive procurement or regulated tariffs — each shapes what storage can earn alongside capacity payments.
• Opening eligibility. Rules that once assumed spinning generators are being amended so storage and inverter-based resources can qualify.
• Measurement and settlement. Metering, telemetry and settlement systems must be in place, tying into utility control-centre upgrades.

What it means for suppliers to utilities and OEMs

Ancillary-service revenue rewards performance: response time, accuracy, availability and cycling capability. That favours battery systems with strong power-conversion and control platforms, and it makes energy management software, telemetry and grid-code compliance testing part of the supplier’s value proposition. Suppliers should expect tenders — see What is a BESS tender? — to specify service capability, and should watch how warranty terms treat the additional cycling. Our storage page tracks these rules market by market.

Quick answers

What are ancillary services?

Services beyond energy supply that keep the grid stable — frequency response, reserves, voltage support and black start — traditionally provided by generators and now increasingly by batteries.

Why do ancillary-service payments matter for storage?

They provide revenue that recognises a battery’s speed and flexibility, improving project economics beyond energy arbitrage or capacity payments.

Sources and further reading

• IEA — Batteries and Secure Energy Transitions — storage economics
• IRENA — Power system transformation — system services and flexibility
• ESMAP — Energy storage — World Bank storage programme
• EnergiTech Media — What is a BESS tender? — procurement explainer

This article was researched and written by the EnergiTech Media editorial team and last reviewed in August 2026. We update country and sector guides as tenders, plans and regulations change. Spotted something out of date? Email support@energitechmedia.com.