A common Nordic aFRR capacity market earliest Q3 2020

A common Nordic aFRR capacity market earliest Q3 2020

Due to a comprehensive NRA approval process, the most optimistic prognosis for the planned common Nordic aFRR capacity market is now next autumn, probably later. The Nordic TSOs will provide more information about a probable start-up time during Q1 2020.

In April, the Nordic TSOs – Svenska Kraftnät, Energinet, Fingrid and Statnett – submitted legal proposals regarding a Nordic aFRR capacity market to their National Regulatory Authority for approval. An approval from the regulators is a prerequisite for introducing a common market. The national regulators have now given their initial feedback and the TSOs are requested to make amendments to the proposal as a step in the further approval process.

When we submitted the proposals this spring, we implied that the aFRR capacity marked could, optimistically, start up during the first months of 2020. Due to our ongoing dialogue with the regulators, it is now obvious that our early estimates, also then pinpointed as optimistic, will not come true, says Jakob Aldrin, program director. -The next decision on approval from the regulators will be in Q1 2020, and at that point we will be able to give more information about an expected timeline.

The purpose of the aFRR capacity market is to ensure availability of aFRR reserves to ensure operational security. Sufficient aFRR capability in the Nordic region is needed for a safe transition to the new balancing model based on 15-minute resolution. A common Nordic market for aFRR capacity is considered as the most efficient way to secure the necessary ramp up of aFRR volumes. This is done by enabling cross-zonal procurement of aFRR capacity available for balancing the Nordic Synchronous Area, whilst taking into account network constraints.

-Introducing a common capacity market for aFRR in the Nordic power system is a cornerstone in the new balancing model, says Jakob Aldrin, program director. - With the introduction of common Nordic aFRR capacity procurement with daily dynamic reservation of transmission capacity between bidding zones as well as cross-border activation, access to balancing resources will be expanded. Without a common market, securing all the needed reserves within each bidding zone is expected to result in less efficient use of cross-zonal capacity and ultimately higher end-user costs.

Please read more about the proposal here.