How do ancillary services assist energy and capacity markets?

•  While purpose of energy markets is to deliver energy on a day to day basis as MWh, and purpose of capacity market to secure capacity in future as MW, 

• Purpose of ancillary services is primarily to maintain frequency

• Frequency varies based on dynamics between supply and demand. If the demand increases (or supply reduces)- Frequency goes down, and in case demand reduces- frequency goes up automatically. Demand can increase for example in summer months, in day time many people switch on air conditioning at same time. Supply can reduce for example if due a situation many power plants connected to the grid stop working. This can also be due to case where grid is depending on renewable energy sources, for example solar farms may not function optimally on cloudy days.

• Job of ancillary services is to ensure stable frequency is maintained at 50 or 60 Hz depending on the region,  and frequency in the grid does not swing wildly depending on changes in demand and supply- with which grid will not be able to function. Ancillary services build up Inertia in the grid, with governor response. This is typically achieved with  technologies such as gas turbine power plant.