What are Ancillary Services?

What are Ancillary Services?

In order to ensure that the demand for electrical energy is met in real time, ancillary services are specialized services and tasks that help grid operators maintain a dependable electricity system. They support and assist the continuous flow of electricity. The increasing penetration of variable renewable energy sources into the grid is expanding the need for ancillary services to be able to balance the overall supply and demand for energy.

The main factor affecting ancillary services is the variability and uncertainty of wind and solar energy, which affects the scheduling and pricing of those services. Adding renewable energy to a power system increases the overall security of supply and decreases costs in the long run. This must be balanced by a robust and agile power system of interconnected devices which are managed in a flexible way. Adding to the complexity, each region has a different power mix and different geographical features which changes the generation requirements as well as the demands on the overall ancillary services market. While the power system is complex and there are many different aspects, ancillary services can be simply described as one of the main functions used to maintain a reliable electricity system. The need for this is increasing as more variable energy sources are deployed in the grid. 

Frequency Control

Controlling the frequency within set limits is crucial to maintaining the intended operating conditions and supplying energy to all connected loads. This prevents unforeseen disturbances that could damage connected loads or even bring the system to a halt.

A power system's frequency fluctuations are caused by an unbalanced relationship between generation and load. The control strategy is started when the frequency value of a power system approaches the emergency condition. In Europe, the power system runs at 50 Hz and the slightest deviation from the required frequency must be corrected in real-time.

Scheduling and Dispatch

At the most basic level, the system designed to balance the energy systems is made up of two main components, scheduling, and dispatch. The first stage, referred to as "unit commitment," usually occurs a day before (referred to as day-ahead) the time needed to meet real-time electricity demand. In most European markets, an auction takes place to determine the price and amount of power required. 

The second stage, known as "dispatch" occurs when the plants that have been committed are chosen to operate at a specific level to meet total electricity demand. Economic factors drive the dispatch choice. In addition, ramp rates and minimum run times are taken into account in the dispatch decision.

The TSO or DSO determines which of its power plants to turn on or off in preparation for demand when the unit is committed. We refer to a plant as "committed" or "scheduled" to create energy if it is turned on during the unit commitment process.

  • Every hour, the grid operator must meet a certain amount of electricity demand known as "base load."
  • Demand is typically greater during the day than at night. As a result, the grid operator will need to arrange some forms of power plants to operate around the clock, but not others.
  • Finally, there are times each day when demand is especially high. These are known as "peak" hours, and the grid operator would need to plan some forms of power plants to be "on-demand," running only during these peak demand periods. While these plants can be turned on and off quickly, they are also more expensive to operate.

Operating Reserves

Due to the strict requirements for production and demand matching, operating reserves are used to fill in the gaps when production is too low.

A generator that can be immediately sent as an operating reserve will guarantee that there is enough energy production to fulfill the load. Spinning reserves are online generators that can quickly boost their power output to meet sudden fluctuations in demand. Because demand might change quickly and an immediate response is necessary, spinning reserves are essential. Other operating reserves include grid batteries, which may respond in tens of milliseconds or less, generally more quickly than even spinning reserves, and generators, which the operator can deploy to fulfill demand but which cannot respond as quickly as spinning reserves.


Learn more about auctions and payments for ancillary services

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In countries with a liberalized energy market, the TSO organizes auctions to procure the required amount of balancing energy that is needed. The TSO specifies the amount needed by looking at historical data and information regarding the particular market, i.e. depending on the energy mix and factors such as weather. 

Merit order decides the devices that get acceptance of a bid. This refers to the fact that bids are ranked by price in order from lowest to highest. When activation occurs, bids are called in merit order until the demand for energy has been met. Cheaper bids with a lower marginal cost of production are more likely to be called than more expensive ones. 

A brief overview of the auction process is below - the auction takes place in the “day-ahead” and the next day the balance responsible party needs to be ready to deliver the energy if activated:

FCR, aFRR, mFRR - what does that mean?

These describe different frequency reserve services. These products’ activation times and the way they work to balance energy vary. 

FCR or Frequency containment reserve is also known as primary reserve. Primary reserve is used to quickly stabilize the grid in 30 seconds (automatically activated in the generator of the power plant). For instance, hydropower plants and battery generators instantly adjust the amount of electricity available in response to a frequency deviation throughout Europe. Primary reserve is used only for initial stabilization and is augmented by secondary control as soon as possible so that FCR can be prepared for the next activation. 

aFRR or automatic Frequency Restoration Reserve is also known as secondary reserve.  aFRR must be activated in either 7.5 minutes or 5 minutes depending on the jurisdiction. aFRR is provided by many different device types, the main requirement is that they can be fully activated within the required time. It is possible to combine devices together, such as a battery and biogas plant to create one device that is both quick to activate and also able to be activated for a longer duration. 

mFRR or manual Frequency Restoration Reserve is also known as tertiary reserve. Devices operating on mFRR must be activated within 15 or 12.5 minutes depending on the local jurisdiction. These devices are sometimes activated manually, i.e. a dispatcher will alert the device operator to activate the device at the specified time. 

MARI and Picasso

The European guidelines on electricity balancing call for the establishment of the European-wide mFRR and aFRR platforms, two essential deliverables of the TSOs' projects MARI and PICASSO. 

These European platforms have been designed to increase the effectiveness of energy balancing throughout the continent and integrate balancing energy markets, opening up the possibility of trading mFRR and aFRR balancing energy while enhancing operational security.

Picasso stands for the Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation - and is the European platform for steering aFRR or secondary reserve. The objective is to create an international trading platform for aFRR. On an international level that dictates devices that have ramp-up speeds of up 7.5 minutes or 5 minutes by December 2024. The initial go-live of PICASSO was the 1st of June 2022

MARI stands for Manually Activated Reserves Initiative. It went live in October 2022. It is the European platform for steering mFRR or tertiary reserve. The objective is the same as PICASSO in the sense that it dictates activation and operational parameters for devices with a ramp-up speed of 12.5 minutes.

Nano Energies is an expert in ancillary services. Are you an energy asset operator with either a large production or consumption of electricity? We can be your access to European ancillary services markets. We have more than a decade of experience in the industry, 24-hour dispatching, and advanced algorithmic trading and forecasting to give you easy access to energy-balancing markets and new business opportunities. Learn how much you can earn with your device in ancillary services markets.

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