What are ancillary services?

Ancillary services are essential operations that help maintain the stability and reliability of the electricity grid. They are generally managed by the Transmission System Operators (TSOs) and they help ensure that electricity supply and demand are balanced at all times and the grid frequency is kept at a stable level (50 Hertz in most countries); this is necessary for the reliable operation of the grid and to prevent outages and blackouts.

The main ancillary services products within the ENTSO-E area listed below, based on increasing activation time:

1. Frequency Containment Reserve (FCR) – Also known as primary reserve, FCR is the first response when there’s an imbalance between electricity supply and demand. It activates automatically within seconds to correct deviations in grid frequency, keeping it stable at the required level (typically 50 Hz in most regions). This rapid response prevents larger issues from developing. Due to the quick response times and small energy volumes involved, FCR participants are usually compensated for their capacity. The procurement of FCR is  coordinated across several countries in continental Europe (FCR Cooperation) through joint daily auctions.
2. Automatic Frequency Restoration Reserve (aFRR) – Also called secondary reserve, aFRR takes over after FCR. While FCR handles the immediate imbalance, aFRR steps in after a few minutes to further stabilize the grid, continuously balancing supply and demand to maintain the grid’s frequency. Differently than FCR which is usually compensated only based on capacity, aFRR participants may be compensated both for their capacity and for the energy injected into or withdrawn from the system. For several European countries, aFRR is procured through a common cross-border platform called PICASSO (Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation).
3. Manual Frequency Restoration Reserve (mFRR) – Known as tertiary reserve, mFRR is manually activated when needed. This service responds after aFRR if the imbalance continues for a longer period, usually within 15 minutes. mFRR provides more sustained support, ensuring that the grid remains stable while more long-term solutions are put in place. Similarly to aFRR, mFRR participants may be compensated for both their capacity and for their energy. For several European countries, mFRR is procured through a common cross-border platform called MARI (Manually Activated Reserves Initiative).

In a few countries, Replacement Reserve (RR) is also active, although it is not classified as a standard ancillary services product within the ENTSO-E area. This is the final reserve used to restore the grid’s balance over the long term. RR is activated after the other reserves and helps bring the grid back to normal operating conditions by replacing the reserves that were previously used.

Historically, conventional power plants (typically gas-fueled) and pumped-hydro storage (where present) have been the main providers of ancillary services. In the latest years, BESS are becoming more and more active as balancing services providers thanks to their extremely fast response times; BESS are indeed the most active in those balancing products such as FCR and aFRR that require the asset to be active within seconds or minutes.

KYOS Software models and Advisory

Although BESS may be participating in the ancillary services market, this is usually accompanied with doing price arbitrage on wholesale markets (Day-Ahead or Intraday).

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