Frequency Containment Reserves (FCR)
In accordance with the objectives of the COMMISSION REGULATION (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (EBGL), the common market for procurement and exchange of FCR (FCR Cooperation) aims at the integration of balancing markets in order to foster, but not limit to, effective competition, non-discrimination, transparency, new entrants and increase liquidity while preventing undue distortions. These objectives must be met in consideration of secure grid operation and security of supply.
This regional project currently involves ten Transmission System Operators (TSOs) from seven countries. These are the TSOs from Austria (APG), Belgium (Elia), Switzerland (Swissgrid), Germany (50Hertz, Amprion, TenneT DE, TransnetBW), Western Denmark (Energinet), France (RTE) and the Netherlands (TenneT NL).
The Austrian, Belgian, Dutch, French, German and Swiss TSOs currently procure their FCR in a common market. Extension towards Western Denmark is foreseen and welcomed by all involved TSOs and National Regulatory Authorities (NRAs).
The FCR Cooperation works currently with weekly auctions with one weekly symmetric product. The auction takes place on Tuesday afternoon and applies for the next delivery week. The FCR Cooperation is organized with a TSO-TSO-model, where the FCR is procured through a common merit order list where all TSOs pool the offers they received. The interaction with Balancing Service Providers (BSPs) and the contracts between the TSOs and BSPs are handled on a national basis along with the responsibility of delivery.
Further development of the market design will facilitate the access for smaller market players, improve the investment signals and increase socio-economic benefits. The process of market design evolution is based on a close cooperation between all the TSOs, NRAs and stakeholders of the involved countries.
The decision making body of the FCR Cooperation is the Steering Committee, chaired by Markus Riegler (Markus.Riegler@apg.at). Steering Committee steers the working groups and manage the interface with NRAs closely. Currently there are two working groups: Market Expert Group address market related topics and is represented by the Convener Milos Djordjevic (Milos.Djordjevic@swissgrid.ch). Ronald Engelmair (email@example.com) leads the Technical Expert Group, focusing on technical topics.
Historical evolution & Outlook
With the ongoing changes in the technology mix, e.g. increased share of renewables, demand side response and storage technologies, TSOs and NRAs decided to assess the current status of the FCR Cooperation and study the possible market design evolutions. The FCR Cooperation project partners launched a public consultation in January 2017, seeking market participants’ views on detailed design options and proposed choices to be implemented.
Extension towards France has been realized in mid-January 2017.
Resulting from the public consultation, the consultation report was published in May 2017, including TSO analysis and subsequent TSO conclusions. Foreseen market design evolution with detailed information is provided in the document
Article 33 (1) EBGL provides that TSOs exchanging […] balancing capacity shall develop a proposal for the establishment of common and harmonized rules and processes for the exchange and procurement of balancing capacity. Since the TSOs of the FCR Procurement are exchanging FCR, they developed a Draft Proposal (together with FCR Draft Proposal - Article 34_1). In accordance with EBGL Article 10, a public consultation on the Draft Proposals was undertaken beginning of 2018. On 26 April 2018, TSOs of the FCR Procurement have submitted their Proposal – Article 33_1 (together with Proposal – Article 34_1 ). TSOs have asessed views of stakeholders resulting from the consultation, and have prepared the consultation report including TSO analysis and subsequent conclusions.
Extension of the joint FCR procurement towards Western Denmark is currently foreseen and welcomed by all involved TSOs and NRAs.
On 26 April 2018, FCR TSO’s submitted abovementioned market proposals to NRAs and the Agency.
End of September 2018, NRAs submitted a request dated 25 September 2018 to amend the TSO’s Proposal for the establishment of common and harmonized rules and processes for the exchange and procurement of Balancing Capacity for Frequency Containment Reserves (FCR) regarding the following point:
- To move the first implementation step From 26 November 2018 to 1 July 2019 (delivery day).
Simultaneously NRAs submitted the request to amend the TSO’s Proposal for the exemption from the obligation to allow balancing service providers to transfer their obligations to provide balancing capacity in accordance with Article 34 (1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing regarding the following point:
- To change the date from 26 November 2018 to 1 July 2019 (delivery day).
The exemption will be applicable from the date of submitting the NRA approval .
The main reason for NRAs amendment request was that stakeholder feedback was received in the official consultation pointing out the limitations to the lead-time available for balancing service providers strictly following the expected date of NRA approval. Furthermore, this solution will also allow synchronizing the implementation of daily auctions with the introduction of marginal pricing, thus reducing the number of implementation steps.
TSOs appreciate the received feedback from stakeholders during the public consultation on market design in February 2018. The feedback was analysed and improved proposals have been prepared and submitted to national regulators (links above and below).
In case you are interested in the FCR Cooperation or have any questions, please contact FCR@entsoe.eu.
Press Releases and Updates
09 January 2019 Stakeholder workshop on harmonisation and market implementations February 19, 2019 at ENTSO-E in Brusssels
09 January 2019 NRA approval for amended TSOs’ proposals was confirmed to all TSOs of the FCR Cooperation
18 October 2018 Amended TSOs’ proposal for the establishment of common and harmonized rules and processes for the exchange and procurement of Balancing Capacity for Frequency Containment Reserves (FCR)
18 October 2018 Amended TSOs’ Proposal for the exemption from the obligation to allow balancing service providers to transfer their obligations to provide balancing capacity
14 June 2018 Updated Consultation report as two inconsistencies were detected and are corrected. Outlined corrections:
GOT D-14 (replacing statement of GOT D-5 )
Implementation D-1 daily auctions as of 01-07-2020 (replacing 01-12-2020)
Below TSO Proposals published on April 26, 2018 are not impacted by this.
26 April 2018 TSOs’ proposal for the establishment of common and harmonized rules and processes for the exchange and procurement of Balancing Capacity for Frequency Contain-ment Reserves (FCR)
26 April 2018 TSOs’ Proposal for the exemption from the obligation to allow balancing service providers to transfer their obligations to provide balancing capacity
26 April 2018 Consulation report on TSO Proposals for FCR cooperation market design
- 15 February 2018 Consultation on Proposal for FCR cooperation market design
- 31 May 2017 Consultation Report “FCR Cooperation”
- 2 January 2017 Public consultation on “FCR Cooperation” potential market design evolutions