Transmission System Operators (TSOs) in Sweden and Finland are significantly changing how Nordic Ancillary Services will be delivered for their respective markets in 2024. The changes affect FCR services in Sweden and aFFR services in Finland.
Regarding Finland, the changes support Fingrid’s transition to operational membership of PICASSO: the Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation. Endorsed by all ENTSO-E member TSOs, the goal of PICASSO is to establish a European-wide automated platform for the exchange of balancing energy from frequency restoration reserves, i.e. a pan-European aFRR capability.
Given that Hansen Trade already complies with these evolutions, our customers in the Nordics are primed and ready to take advantage immediately.
The Detail
As of February 1, Svenska Kraftnät will change the Frequency Containment Services (FCR) procurement model to marginal pricing, also known as pay-as-cleared pricing. FCR has a vital role as one of the first lines of defence in stabilising the network frequency during deviation events and is fundamental in maintaining the power system. Previously, this market operated a so-called pay-as-bid model, where Svenska Kraftnät compensated providers based on the price of accepted bids. In the future, this move means that service providers will be paid according to the marginal price in the auction, thus the highest-priced accepted bid.
FCR capacity is procured in two supplementary auctions the day before the delivery period (D-1). Therefore, there will be two different marginal prices per product per hour: one marginal price will be set per product/hour in the first auction and another marginal price per product/hour in the second.
Additionally, Svenska Kraftnät will transition FCR market-messaging from a protocol based on EDIEL/SMTP to one using XML/ECP. We understand the TSO will implement this change around mid-2024.
In Finland, Fingrid will introduce a new energy market for providing Automatic Frequency Restoration Reserve (aFRR) services, complementing the existing capacity market. The current situation operates pro-rata (based on the capacity bid), and this market will soon move to a bid pricing model. This change means that service providers will be ranked, according to their bids, in an order of merit listing. During aFRR activation, Fingrid will utilise this list, calling in as-required capacity based on the lowest bid, the next lowest, and so on.
The purpose of aFRR, as a centralised, automatically activated reserve, is to return the frequency to the nominal value of 50 Hz. The activation of aFRR is via a request signal sent by the TSO, with activation requests calculated and distributed every 10 seconds.
The Conclusion
Ancillary Services appear to be gaining ever more importance due to a combination of an increasingly diverse and complex mix of generation assets and the variable nature of many, especially weather-dependent renewables. The transition from conventional to green, renewable sources is, in equal measure, inevitable and unquestioned. These evolutionary changes reflect how national grids must adapt and evolve to gain maximum leverage of all available sources and implement the necessary modifications to maintain network stability.
Hansen Trade’s modular approach delivers a fully automated solution for bidding and trade result handling across a broad range of market activities, including Ancillary Services. It provides trade results separately for each asset and other trading positions, and this capability enables traders to participate fully in markets with up-to-date data. Additionally, Hansen Trade delivers comprehensive monitoring and validation tools, ensuring trading is reliable, deterministic, and conducted with high levels of transparency and visibility.
Learn more about our Ancillary Services modules and the full range of Hansen Trade’s capabilities.
Jyri Joutsi
Product Manager
Hansen Trade
