When a contingency happens (loss of equipment such as a generator), units respond pretty much immediately due to governor response in the unit itself (good ole' inertia). Most RTO/ISOs in the USA (I know AEMO is in Australia) have a very large amount of power already ready to go if a unit trips offline. Using batteries to help with this is being worked on. They already exist, but new market rules are being drafted in order to allow them to be taken advantage of and properly compensated. The term is stored energy resource. Google that term in conjunction with ISO-NE, PJM, MISO, SPP, NYISO, CAISO...etc.
The requirements were relaxed because the intention was to have an entirely market-driven mechanism for frequency control. The system reliability impacts were an unintended consequence.
