Rethinking the method for a Nordic capacity market for mFRR
A proposed Nordic method for a common capacity market for manual frequency restoration reserves (mFRR) has been withdrawn. The reason is that the Nordic TSOs were notified that the Nordic national regulatory agencies (NRAs) saw regulatory challenges with the proposed methods. The Nordic TSOs will now revise and resubmit adjusted methods to establish a Nordic capacity market for mFRR.
Why a common Nordic mFRR capacity market?
A cornerstone in the Nordic Balancing Model is to establish a single, common Nordic balancing capacity market for the procurement and exchange of manual frequency restoration reserves (mFRR). By procuring balancing capacity, TSOs acquire the option to activate specific generation or demand facilities to balance the electricity system in real time. By organising this common procurement and exchange of balancing capacity, the Nordic TSOs increase competition between providers, reducing the overall costs for the TSOs.
What has been done so far?
In accordance with the EU guideline on electricity balancing (EBGL), the Nordic TSOs submitted a set of regional terms and methodologies (TCMs) in the fall of 2022. The aim was to establish common and harmonised rules and processes to create a single Nordic balancing market for the exchange and procurement of mFRR balancing capacity.
On 14 April 2023, the Nordic TSOs received a response from the Nordic national regulatory agencies (NRAs), in which they highlighted regulatory challenges regarding the submitted terms and methodologies.
In the response to the Nordic TSOs, the NRAs state that there is no clear solution in the submitted methodologies on how to exchange mFRR capacity in and out of the Nordic synchronous area without violating the provisions in other methodologies. As a result, the NRAs have not been able to reach an agreement within the 6-month deadline provided in the EBGL. The proposed Nordic methods were then withdrawn by Statnett and Svenska kraftnät.
Revising and resubmitting
The Nordic TSOs will revise and resubmit the methods to establish a Nordic capacity marked for mFRR.
NBM will publish an updated timeline for the Nordic mFRR capacity markets go-live as part of the renewed roadmap. However, the withdrawal is not expected to affect the upcoming go-live of national capacity markets.
Contact at TSOs: