Regulation is used to reconcile momentary differences between demand and generation inside a control area or momentary deviations in interchange flows between control areas, caused by fluctuations in generation and loads. In other words, this is a power balancing application. Conventional power plants are often less suited for this application, where rapid changes in power output could incur significant wear and tear. Energy storage systems with a rapid-response characteristic are suitable for operation in a regulation application. 

Energy storage used in regulation applications should have access to and be able to respond to the area control error (ACE) signal (where applicable), which may require a response time of fewer than five seconds. Furthermore, energy storage used in regulation applications should be reliable with a high quality, stable (power) output characteristics.