Ancillary services (electricity market)
Internal Electricity Market Glossary



Directive 2009/72/EC defines ancillary service as 'a service necessary for the operation of a transmission or distribution system.'


Typical ancillary services procured by Transmission System Operators (TSOs) to ensure the management of the system divide into:


- frequency ancillary services (balancing of the system), and


- non-frequency ancillary services (voltage control and black-start capability).


In most cases, TSOs are mandated to do so by a general public service obligation to maintain system stability and security.


Legislative Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast) of 30.11.2016 (COM(2016) 864 final 2016/0380 (COD)) in Article 2(37) adds to the existing legal definition from the Directive 2009/72/EC the following words: 'including balancing and non-frequency ancillary services but not congestion management.'


The definition of the 'non-frequency ancillary service' is, moreover, proposed to be included in the said Directive (according to the aforementioned proposal it denotes 'a service used by a transmission or distribution system operator for steady state voltage control, fast reactive current injections, inertia and black start capability').


Examples of ancillary services that TSOs can acquire from generators are electricity for the compensation of grid losses, regulating power and emergency power.


Ancillary services according to the ACER's Framework Guidelines on Electricity System Operation (FG-2011-E-003) of 2 December 2011 mean services necessary to support transmission of electric power between generation and load, maintaining a satisfactory level of operational security and with a satisfactory quality of supply. 


The main elements of ancillary services include active power reserves and reactive power reserves for balancing power and voltage control.


Active power reserves include automatically and manually activated reserves and are used to achieve instantaneous physical balance between generation and demand.

Further elements of ancillary services may include inertial response, trip to houseload, spinning reserve and islanding capability.

A particular area in which there may be debate about what constitutes a capacity mechanism and what requires State aid approval is in the specification and procurement of ancillary services.


TSOs typically procure frequency (balancing of the system) and non-frequency (voltage control and black-start) ancillary services to ensure the management of the system.


In most cases, they are mandated to do so by a general public service obligation to maintain system stability and security.


Where such ancillary services are procured independently by TSOs, and where in particular the determination of the precise volumes and types of services to be procured is left to the TSOs without Government involvement, there will be a strong indication that the purchase of such services does not involve State aid and that those services are therefore not covered by this inquiry.


Such indication will be strengthened when procurement of such services is performed in a transparent, competitive and non-discriminatory way, thereby excluding undue advantages.


Another element to distinguish ancillary services from capacity mechanisms is the use and purpose of the services: when they are used in small volumes relative to the overall level of capacity in the market and only to provide short term corrections to enable system security, they will more likely be considered ancillary services.


However, where ancillary services appear to be contracted at the request of governments and/or are used to ensure capacity is available to balance the system over longer periods, they can have the same effect as capacity mechanisms.


Such measures may merit attention from the Commission and require State aid approval. 


Commission Staff Working Document of 30.11.2016 Accompanying the document Report from the Commission Final Report of the Sector Inquiry on Capacity Mechanisms {COM(2016) 752 final} SWD(2016) 385 final, p. 52, 53


In the liberalised market, many ancillary services are contracted by TSOs from selected grid users that qualify for providing these services.

Ancillary services pursuant to the Supporting Document for the Network Code on Operational Planning and Scheduling of 26 March 2013 are services provided by grid users to the TSO.


The said dokument mentions ancillary services in the context of active power, reactive power and black start capability.


The first two ancillary services enable the TSO to operate a secure and reliable power system, whereas the last enables the TSO to reset the system after a fault (the matter of the emergency code).

In managing the transmission systems, the TSOs must be able to deal with unexpected changes of generation capacity, interconnector flows or system demand.


This is accomplished by maintaining a prudent level of active power ancillary services.


The responsibility is put on the TSOs to ensure the correct procurement and management systems are in place to ensure adequate/correct ancillary services.

There is the need to plan ahead to ensure the correct levels of active power ancillary services will be available once real time is reached.


Updates to this plan will be required for any significant network or generation changes that impact on operational security.

If when updating the plan a shortfall is detected, remedial action must be taken.


If a TSO finds itself in a shortfall position (after remedial actions have been investigated), communication and cooperation with neighbouring TSOs is a priority.

For reactive power, the TSOs must maintain a voltage balance across the transmission systems in order to maintain a secure and stable power system and to avoid damage to connected equipment.


To maintain the balance, the appropriate level of reactive power (leading and lagging) is required at appropriate locations in the transmission system.


The required level of reactive power varies in the operational timeframe.


Reactive power is mainly provided by generator units and transmission assets.


Generally, reactive power must be provided close to the location where it is needed.


Overall, therefore, the requirement is for the flexible provision of reactive power at appropriate points across the transmission systems.


Secure and efficient system operation demands cross-border and cross-control area coordination.


Hence, there is a need to share information on ancillary services across interconnectors in the planning phase to ensure that everything reasonably practical has been done to ensure both operational security and an economically sound outcome.


Each TSO will publish the required levels of active power reserves.


This requirement inevitably will be among most important elements of the transparency of the EU Internal Electricity Market and likely will have also relevance to REMIT Regulation.





Article 2(2)(u) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)



'capacity mechanism' means an administrative measure to ensure the achievement of the desired level of security of supply by remunerating resources for their availability not including measures relating to ancillary services







Last Updated on Wednesday, 03 May 2017 12:12


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