The stability of our power grid hinges on maintaining a balanced frequency. To ensure this, we need certain support functions, so-called ancillary services. These include:
The grid is considered balanced when electricity is being consumed and generated evenly to reach a steady frequency of 50 Hz. It is the responsibility of the TSO (Transmission System Operator) to secure this balance, but fluctuations will inevitably happen. The grid can go out of balance in two ways.
To counter the first scenario, the TSO must see to it that consumption is reduced or that generation is increased. Inversely, the second scenario calls for an increase in consumption or a decrease in generation. The transactions to achieve this 50 Hz balance occur in various markets, where the TSO procures energy products from participants who trade energy to capture value.
For asset optimization, frequency regulation holds the most opportunities, most notably the control reserve markets, including FCR (Frequency Containment Reserve), aFRR (automatic Frequency Restoration Reserve), and mFRR (manual Frequency Restoration Reserve). In these, the TSO procures reserves to have enough capacity available for activation in the event of a grid imbalance. FCR is the primary reserve, aFRR the secondary reserve, and mFRR the tertiary reserve. This gives the TSO the constant security of a backup reserve. For example, if both the FCR and aFRR reserves are maxed out due to the outage of a big power plant and struggle to handle other fluctuations and imbalances that continue to happen, the mFRR reserve can still be activated manually to provide grid relief and maintain stability.
The exact timeframes in which such balancing transactions occur are expressed in D units, where D stands for delivery day, D-1 for delivery day minus one, D-7 for delivery day minus 7, and so on. The table below gives you an overview of the most important features of FCR, aFRR, and mFRR, using the common internal markets as reference.
| FCR | aFRR capacity | aFRR energy | mFRR capacity | mFRR energy | |
| Hierarchy | primary reserve | secondary reserve | secondary reserve | tertiary reserve | tertiary reserve |
| Purpose |
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| Procurement | local and cross-border | local and cross-border | local and cross-border | local and cross-border | local and cross-border |
| Bid submission | 11 am D-14 to 8 am D-1 | 9 am D-7 to 9 am D-1 | up until 25 minutes before each delivery period | 10 am D-7 to 10 am D-1 | up until 25 minutes before each delivery period |
| Product duration | 4 hours | 4 hours | 15 minutes | 4 hours | 15 minutes |
| Activation method | automated based on frequency deviations | automated based on TSO signal | automated based on TSO signal | manual | manual |
| Pricing system | pay-as-cleared | pay-as-bid | pay-as-cleared and sometimes pay-as-bid | pay-as-bid | pay-as-cleared and sometimes pay-as-bid |
| Common internal market | FCR Cooperation | PICASSO* | MARI* | ||
| Operational member countries | AT, BE, CZ, DK, NL, FR, DE, SI, CH |
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AT, CZ, DE, IT | AT, CZ, DE, IT |
*PICASSO: Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation
*MARI: Manually Activated Reserves Initiative
To sum up, the stability of our grid hinges on a multi-tiered, inter-supportive system of ancillary services. The hierarchical structure of the primary, secondary, and tertiary reserves ensures the sufficient availability of backup power to manage unexpected grid disturbances and provide consistent security of supply. Check here to get a more in-depth understanding of the market design and participation in the individual markets.
In battery monetization, a cross-market optimization approach is key to securing maximum profitability. Are you interested in leveraging ancillary services with your asset?
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