Question and Answer





The changes that will be implemented for the modernized Nordic mFRR market are necessary steps in order to be compliant with the European mFRR market.
The total Nordic benefits for common mFRR activations are very large, in the range of 200 mio Euro per year. The fundamental changes in the power system we foresee (15 min ISP, smaller bids, more RES) means that the Nordics cannot continue to capture these benefits in the future unless the operators are equipped with new tools such as an mFRR AOF. This new tool can be a European mFRR AOF, but we need to handle the risk that this platform is delayed or not working properly? Together the short term benefit; the risk minimization; the necessary step to be compliant; and the use as a back-up unction later mean that the Nordic see large benefits in developing a Nordic AOF before the EU platform goes live.
The Nordic TSOs will strive to avoid unnecessary or double changes for the BSPs





The main difference is that there will be established an mFRR need per bidding zone, and not just one common need based on the frequency. Different needs from different bidding zones, can however still be netted via the platform





No, we don't see that now.





MARI and PICASSO are energy markets. The Nordic aFRR and mFRR capacity markets are balancing capacity market. The platforms (MARI and PICASSO) and the Nordic capacity markets have different objectives. MARI and PICASSO are platforms for exchange of balancing energy between TSOs and the Nordic capacity markets are to ensure enough reserves in the region.





As service providers for common Nordic services for balancing, Svenska kraftnät and Statnett will use Fifty for developing and implementing IT-tools supporting these common services. Fifty has established two vendor contracts so far, and will conduct additional public procurement processes if needed. IT solutions necessary to support each TSOs local responsibilities/tasks is a matter for each TSO. ENDK and FG will ensure implementation in own systems





We have an agile approach in the development of NBM design





The activations will be done by the TSO. The bid selection will happen in MARI.





The BSP submit the bids for each bidding area so the resources in a bid have to be from the same bidding area.





The mACE function will optimize the activations depending on bid price, system need and available capacity. The available capacity will in the first step be the leftover capacity from ID.





The dimensioning of FRR is done before the procurement of FRR capacity, based on historical imbalances. The dimensioning of FRR is to ensure enough reserves in the system and the TSOs procure these reserves in the capacity market. In theory all the resources can be activated in the spot market so the procurement has to be done before. In the procurement the TSO can take into account expected voluntary bids in the reserve capacity market.





The volume may change both hourly and daily, and will be based on a dynamic process (D-2). The TSOs will aim to publish the volumes in advance of the auctions, if practically possible. The procured volumes will be according to dimensioning volumes unless each TSO assess that the procurement of capacity can be less due to voluntary bid volumes in the energy activation market. According to SOGL and EBGL each TSO needs to at least once a year assess the volume of voluntary bids in the energy activation market based on historical values.





We think the balancing costs will mainly depend on other fundamental drivers in the Nordic energy market. With that said, the introduction of aFRR will mean that the TSOs are increasing the total volume of reserves, and this can be expected to lead to a short term increase in balancing costs.





The future prices are unknown, most important is that we establish a well-functioning market, with equal access, no discrimination etc., where healthy competition between market players will ensure that the right prices are established





The products that will be introduced is the ones the system need. The European regulations encourage use of the defined standard products, and any further products should be duly justified.





Yes, due to a broader ID market, the new production mix etc. The new settlement and market roles are tools to handle this change.





A procurement of FRR capacity in another bidding area has to be followed by a reservation of transmission capacity between the areas to ensure continuous access. According to EBGL article 41.2 the Cross-zonal capacity allocated on a market-based process shall be limited to 10 %.





The updated proposals will not be discussed with stakeholders before sent to NRAs but the proposals will be published. NRA said in their presentation that they will have their own stakeholder consultation during the 6 month the proposals is with the NRAs





The TSO need for aFRR will always be to minimize ACE of each area. For mFRR the TSO need will be based on forecasted imbalance.
There are no plans to use price-dependent demand, but the MARI platform for mFRR will support this.
Limits on demand, activation volume or price could be used in the introduction of the new markets.




A road map for stakeholder involvement is under development and will be published at





The auction each 4th second will provide a direction to increase or decrease their contribution for the unit. The dynamics of the aFRR control process will be slower than 4s, meaning that the aFRR activation will not change significantly from one cycle to the next.





Imbalance price is a subject for all European TSOs to develop a proposal following a NRA decision. Currently, the proposal suggest the margin price of mFRR and aFRR will be input to the imbalance price.





This is difficult to quantify. For each HVDC cable there are technical restrictions that need to be respected. In principle all DC cables handle FRR reserves, , but the modern VCSC cables have less restrictions than the older LLC cables. The actual availability of reserve capacity requires unused capacity in the energy markets or the introduction of a capacity reservation scheme. In one direction there will always be significant available capacity.
In addition to the limitations on each HCDC connections it could be necessary with more system-wide restrictions to ensure the operational security in the power system. Rapid changes power changes of thousands of MW could lead to frequency quality problems and should be prevented.





Yes. It is most efficient to implement 15 minutes ISP in the Nordic countries at the same date. If countries implement 15 minutes ISP at different dates, cost will rise for the common settlement system of eSett and we will have a less efficient Nordic balancing market. Market parties operating in several Nordic countries will have to relate to different ISPs, which will increase costs.





Both European and Nordic development follows the legal process and system needs. There is no race.





The Nordic TSOs are currently working on changing the Balancing philosophy from frequency regulation to "Modernized ACE" regulation. In addition, European Network Guidelines are bringing in other changes – for example the transition to 15-minute Imbalance settlement period. These changes will affect the impact from DC ramping on the Nordic system, and will give the Nordic TSOs new tools for balancing their systems. This in turn calls for a thorough evaluation of the Nordic ramping restrictions in 2-3 years' time. New ramping restrictions will be negotiated as part of an updated Nordic synchronous area operational agreement.





The data hubs in Sweden and Finland are scheduled to be operational during 2021. Although these projects are moving ahead as planned, there is always a risk of delays with such large IT project. The Elhub in Norway is one example. Thus, linking the go live of 15 minutes ISP and the data hubs of Sweden and Finland would create a dependency and any risk of delays in either of the data hub projects would be a risk for the implementation of 15 minutes ISP in the Nordics. That said the Nordic TSOs are well aware of the extra costs that could be incurred for market parties, in particular DSOs, when 15 minutes ISP comes before the go live of the data hubs. That is why the TSOs in both Finland and Sweden will implement a minimum solution at first in order to limit the intermediate changes for all market parties as much as possible.





Not related to NBM. The discussion regarding 15 minutes on Spot market is on a European level.





At the moment there are no formalized plans for integrating the FCR market on a Nordic level. However, the current development of Nordic common technical requirements for market participation in each country can be seen as an important step in a future, possible integration of the markets.





The mFRR capacity market design and the relation to the aFRR capacity market is not yet decided.





First question; see answer above. Second question: Depends on the first question. We do not want to speculate at this point in time.





The proposal of standard products will be developed in the platforms and approved by NRAs. Current proposal, the products for FRR follows the length of ISP (15 minutes) except direct activation for mFRR that can be up to 30 minutes. The proposed bid size is 1 MW.





The FAT will be harmonized in Europe. Current proposal of Implementation Framework for aFRR is a harmonized FAT on 5 minutes 2025. Until then the FAT is under national responsible.





NBM will send a survey to all seminar participants that will be a start of this process





The goal is to involve stakeholders as early as possible and according to stakeholders needs.





The main drivers for the Nordic Balancing Model are not financial, but required to keep a functional, secure and market-based power system with significant exchange of energy and balancing between TSOs. Large positive benefits are based on analysis and implementation to uphold current benefit from Nordic cooperation. There are large changes being implemented both for improving security of supply and implementation of European regulation.
Frequency quality is expected to be significantly improved with more available aFRR.





NBM will send a survey to all seminar participants that will be a start of this process