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Frequency Containment Reserve (FCR)
European Union Electricity Market Glossary

 

 

Frequency containment reserve (FCR) in the European Union Internal Electricity Balancing Market means operating reserves necessary for constant containment of frequency deviations (fluctuations) from nominal value in order to constantly maintain the power balance in the whole synchronously interconnected system.

 

Legal definition of the ‘frequency containment reserves’ is laid down by Article 3(2)(6) of the EU Network Code on System Operation where the FCR denotes "the active power reserves available to contain system frequency after the occurrence of an imbalance”.

 

Activation of these reserves results in a restored power balance at a frequency deviating from nominal value.

 

This category typically includes operating reserves with the activation time up to 30 seconds.

  

Operating reserves of this category are usually activated automatically and locally.

 

Frequency containment reserves are supplied by reserve providers (generators, storage, demand response) and they are used by Transmission System Operator (TSO) to maintain frequency stable within a given synchronous area (e.g. continental Europe).

 

The settlement between TSO and a balancing service provider (BSP) of energy from a FCR is left optional in the Network Code on Electricity Balancing (NC EB) due to potentially small volumes of capacity and activated energy and the possible difficulties for measurement associated to the FCR process.

 

According to Article 46 of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing each connecting TSO may calculate and settle the activated volume of balancing energy for the frequency containment process with balancing service providers.


The price, be it positive, zero or negative, of the activated volume of balancing energy for the frequency containment process is to be defined for each direction in accordance with the following table:

 

Table

Payment for balancing energy

  Balancing energy price positive Balancing energy price negative
Positive balancing energy Payment from TSO to BSP Payment from BSP to TSO
Negative balancing energy Payment from BSP to TSO  Payment from TSO to BSP

 

 

Consultation Report on the FCR Cooperation of 31 May 2017 provided for the following TSOs conclusions regarding the evolution of FCR cooperation market design are the following:

 

1. change the auction frequency from weekly auctions to daily all days auctions,

 

2. subject to technical feasibility and time restrictions the proposal for GOT and GCT is:

- GCT at 08:00 in D-1,

- Publication time at 08:30 in D-1,

- Gate Opening Time in D-5,

 

 3. change the product duration from weekly to 4h products,

 

 4. neither to implement linked bids nor multiple products,

 

 5. not to introduce a cross border transfer of obligations,

 

 6. not to introduce asymmetric products,

 

7.  to allow indivisible bids, with a restriction that no divisible bid can be paradoxically rejected (this will be avoided by allowing overprocurement),

 

8. Maximum bid size of an indivisible bid will be limited to 25 MW,

 

9.  not to introduce exclusive bids,

 

10.  to keep the current minimum bid size of 1 MW,

 

 11. introduce Marginal Pricing as the TSO-BSP Settlement scheme,

 

12. to investigate and to come up with a joint solution for harmonisation on these topics:

- Rules for aggregation & Centralized frequency measurement,

- Monitoring & Penalties,

- Backup requirements (n-1).

 

Annual Report of the ACER and CEER on the Results of Monitoring the Internal Electricity and Gas Markets in 2016 (Electricity Wholesale Markets Volume) published in October 2017 (p. 52) notes that compared to 2015 some key changes were observed in 2016 as regards the capacity procurement costs.

 

These costs decreased in several markets, e.g. in Austria, Germany and the Netherlands by 45%, 34% and 16% respectively.

 

According to the said Report of October 2017, this was partly due to the consolidation of the coordinated procurement of FCRs, a project that was launched in 2015 and extended to Belgium in 2016.

 

As a result, average prices of contracted FCRs in these markets decreased for the second consecutive year (e.g. in the Netherlands between 2014 and 2016 the average decreased by around 50%).

 

On 15 January 2018 the Draft Proposal for the exemption of the FCR Cooperation Parties from the obligation to allow balancing service providers to transfer their obligations to provide balancing capacity in accordance with Article 34 (1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing has been published by TSOs from Austria, Belgium, Denmark, France, Germany, the Netherlands and Switzerland.

 

The above TSOs propose that cross border transfer of awarded capacity obligations should remain prohibited in their common FCR procurement

 

The said TSOs request the relevant exemption, which is reasoned as follows:

 

1. since the said TSOs are planning to implement daily procurement of FCR capacity, they consider that the risk for BSPs of not being able to meet their obligations is significantly lower than the case of weekly procurement (as a result, also the need for the BSPs to transfer their obligations in a cross border context is expected to be substantially lower);


2. linked to the limited needs to implement a cross border context, the said TSOs consider that the task of implementing such a solution comes with the following, significant complexity:


- the import and export limitation violations have to be reassessed each time a demand for cross border transfer of obligations is expressed,


- the k factor, as defined in Commission Regulation EU 2017/1485, of each LFC Control Area needs to be readapted every time a cross border transfer of capacity takes place;


3. the following conditions should be in place in order to have an efficient cross border transfer of obligations that does not induce market distortions, these conditions require a lot of time and effort by the said TSOs:


- harmonisation of penalties in case of BSP failure of delivery among the participating countries,


- design of a mechanism for the allocation of the relevant cross border capacity resulting from the respective import and export limitations should be developed,


- implementing the above mechanism in a central tool and in the LFC of each control area.

 

On 15 January 2018 the TSOs from Austria, Belgium, Denmark, France, Germany, the Netherlands and Switzerland published the Proposal for the establishment of common and harmonised rules and processes for the exchange and procurement of Frequency Containment Reserve (FCR) in accordance with Art. 33 of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing.

 

Provisions regulating frequency containment reserves are stipulated in Articles 153 - 156 of the Network Code on System Operation (see box below).

 

 

 

Network Code on System Operation

Articles 153 - 156

 

Title 5
Frequency Containment Reserves


Article 153
FCR dimensioning


1.   All TSOs of each synchronous area shall determine, at least annually, the reserve capacity for FCR required for the synchronous area and the initial FCR obligation of each TSO in accordance with paragraph 2.


2.   All TSOs of each synchronous area shall specify dimensioning rules in the synchronous area operational agreement in accordance with the following criteria:


(a) the reserve capacity for FCR required for the synchronous area shall cover at least the reference incident and, for the CE and Nordic synchronous areas, the results of the probabilistic dimensioning approach for FCR carried out pursuant to point (c);


(b) the size of the reference incident shall be determined in accordance with the following conditions:


(i) for the CE synchronous area, the reference incident shall be 3 000 MW in positive direction and 3 000 MW in negative direction;
(ii) for the GB, IE/NI, and Nordic synchronous areas, the reference incident shall be the largest imbalance that may result from an instantaneous change of active power such as that of a single power generating module, single demand facility, or single HVDC interconnector or from a tripping of an AC line, or it shall be the maximum instantaneous loss of active power consumption due to the tripping of one or two connection points. The reference incident shall be determined separately for positive and negative direction;


(c) for the CE and Nordic synchronous areas, all TSOs of the synchronous area shall have the right to define a probabilistic dimensioning approach for FCR taking into account the pattern of load, generation and inertia, including synthetic inertia as well as the available means to deploy minimum inertia in real-time in accordance with the methodology referred to in Article 39, with the aim of reducing the probability of insufficient FCR to below or equal to once in 20 years; and


(d) the shares of the reserve capacity on FCR required for each TSO as initial FCR obligation shall be based on the sum of the net generation and consumption of its control area divided by the sum of net generation and consumption of the synchronous area over a period of 1 year.


Article 154
FCR technical minimum requirements


1.   Each reserve connecting TSO shall ensure that the FCR fulfils the properties listed for its synchronous area in the Table of Annex V.


2.   All TSOs of a synchronous area shall have the right to specify, in the synchronous area operational agreement, common additional properties of the FCR required to ensure operational security in the synchronous area, by means of a set of technical parameters and within the ranges in Article 15(2)(d) of Regulation (EU) 2016/631 and Articles 27 and 28 of Regulation (EU) 2016/1388. Those common additional properties of FCR shall take into account the installed capacity, structure and pattern of consumption and generation of the synchronous area. The TSOs shall apply a transitional period for the introduction of additional properties, defined in consultation with the affected FCR providers.


3.   The reserve connecting TSO shall have the right to set out additional requirements for FCR providing groups within the ranges in Article 15(2)(d) of Regulation (EU) 2016/631 and Articles 27 and 28 of Regulation (EU) 2016/1388 in order to ensure operational security. Those additional requirements shall be based on technical reasons such as the geographical distribution of the power generating modules or demand units belonging to an FCR providing group. The FCR provider shall ensure that the monitoring of the FCR activation of the FCR providing units within a reserve providing group is possible.


4.   The reserve connecting TSO shall have the right to exclude FCR providing groups from the provision of FCR in order to ensure operational security. This exclusion shall be based on technical reasons such as the geographical distribution of the power generating modules or demand units belonging to an FCR providing group.


5.   Each FCR providing unit and each FCR providing group shall have only one reserve connecting TSO.


6.   Each FCR providing unit and each FCR providing group shall comply with the properties required for FCR in the Table of Annex V and with any additional properties or requirements specified in accordance with paragraphs 2 and 3 and activate the agreed FCR by means of a proportional governor reacting to frequency deviations or alternatively based on a monotonic piecewise linear power-frequency characteristic in case of relay activated FCR. They shall be capable of activating FCR within the frequency ranges specified in Article 13(1) of Regulation (EU) 2016/631.


7.   Each TSO of the CE synchronous area shall ensure that the combined reaction of FCR of a LFC area comply with the following requirements:


(a) the activation of FCR shall not be artificially delayed and begin as soon as possible after a frequency deviation;


(b) in case of a frequency deviation equal to or larger than 200 mHz, at least 50 % of the full FCR capacity shall be delivered at the latest after 15 seconds;


(c) in case of a frequency deviation equal to or larger than 200 mHz, 100 % of the full FCR capacity shall be delivered at the latest after 30 seconds;


(d) in case of a frequency deviation equal to or larger than 200 mHz, the activation of the full FCR capacity shall rise at least linearly from 15 to 30 seconds; and


(e) in case of a frequency deviation smaller than 200 mHz the related activated FCR capacity shall be at least proportional with the same time behaviour referred to in points (a) to (d).


8.   Each reserve connecting TSO shall monitor its contribution to the FCP and its FCR activation with respect to its FCR obligation, including FCR providing units and FCR providing groups. Each FCR provider shall make available to the reserve connecting TSO, for each of its FCR providing units and FCR providing groups, at least the following information:


(a) time-stamped status indicating if FCR is on or off;


(b) time-stamped active power data needed to verify FCR activation, including time-stamped instantaneous active power;


(c) droop of the governor for type C and type D power generating modules as defined in Article 5 of Regulation (EU) 2016/631 acting as FCR providing units, or its equivalent parameter for FCR providing groups consisting of type A and/or type B power generating modules as defined in Article 5 of Regulation (EU) 2016/631, and/or demand units with demand response active power control as defined in Article 28 of Regulation (EU) 2016/1388.


9.   Each FCR provider shall have the right to aggregate the respective data for more than one FCR providing unit if the maximum power of the aggregated units is below 1,5 MW and a clear verification of activation of FCR is possible.


10.   At the request of the reserve connecting TSO, the FCR provider shall make the information listed in paragraph 9 available in real-time, with a time resolution of at least 10 seconds.


11.   At the request of the reserve connecting TSO and where necessary for the verification of the activation of FCR, a FCR provider shall make available the data listed in paragraph 9 concerning technical installations that are part of the same FCR providing unit.

 

Article 155

FCR prequalification process

 

1. By 12 months after entry into force of this regulation, each TSO shall develop an FCR prequalification process and shall make publicly available the details of the FCR prequalification process.


2. A potential FCR provider shall demonstrate to the reserve connecting TSO that it complies with the technical and the additional requirements set out in Article 154 by completing successfully the prequalification process of potential FCR providing units or FCR providing groups, described in paragraphs 3 to 6 of this Article.


3. A potential FCR provider shall submit a formal application to the reserve connecting TSO together with the required information of potential FCR providing units or FCR providing groups. Within 8 weeks from receipt of the application, the reserve connecting TSO shall confirm whether the application is complete. Where the reserve connecting TSO considers that the application is incomplete, the potential FCR provider shall submit the additional required information within 4 weeks from receipt of the request for additional information. Where the potential FCR provider does not supply the requested information within that deadline, the application shall be deemed withdrawn.


4. Within 3 months from confirmation that the application is complete, the reserve connecting TSO shall evaluate the information provided and decide whether the potential FCR providing units or FCR providing groups meet the criteria for an FCR prequalification. The reserve connecting TSO shall notify its decision to the potential FCR provider.


5. Where the compliance with certain requirements of this Regulation has already been verified by the reserve connecting TSO, it will be recognised in the prequalification.


6. The qualification of FCR providing units or FCR providing groups shall be re-assessed:


(a) at least once every 5 years;


(b) in case the technical or availability requirements or the equipment have changed; and


(c) in case of modernisation of the equipment related to FCR activation.

 

Article 156

FCR provision

 

1. Each TSO shall ensure the availability of at least its FCR obligations agreed between all TSOs of the same synchronous area in accordance with Articles 153, 163, 173 and 174.


2. All TSOs of a synchronous area shall determine, at least on an annual basis, the size of the K-factor of the synchronous area, taking into account at least the following factors:


(a) the reserve capacity on FCR divided by the maximum steady-state frequency deviation;


(b) the auto-control of generation;


(c) the self-regulation of load, taking into account the contribution in accordance with Articles 27 and 28 of Regulation (EU) 2016/1388;


(d) the frequency response of HVDC interconnectors referred to in Article 172; and


(e) the LFSM and FSM activation in accordance with Articles 13 and 15 of Regulation (EU) 2016/631.


3. All TSOs of a synchronous area consisting of more than one LFC area shall, in the synchronous area operational agreement, determine the shares of the K-factor for each LFC area, which shall be based on at least:


(a) the initial FCR obligations;


(b) auto-control of generation;


(c) the self-regulation of load;


(d) frequency coupling via HVDC between synchronous areas;


(e) exchange of FCR.


4. An FCR provider shall guarantee the continuous availability of FCR, with the exception of a forced outage of a FCR providing unit, during the period of time in which it is obliged to provide FCR.


5. Each FCR provider shall inform its reserve connecting TSO, as soon as possible, about any changes in the actual availability of its FCR providing unit and/or its FCR providing group, in whole or in part, relevant for the results of prequalification.


6. Each TSO shall ensure, or shall require its FCR providers to ensure that the loss of a FCR providing unit does not endanger the operational security by:


(a) limiting the share of the FCR provided per FCR providing unit to 5 % of the reserve capacity of FCR required for each of the whole CE and Nordic synchronous areas;


(b) excluding the FCR provided by the unit defining the reference incident of the synchronous area from the dimensioning process for GB, IE/NI and Nordic synchronous areas; and


(c) replacing the FCR which is made unavailable due to a forced outage or the unavailability of an FCR providing unit or FCR providing group as soon as technically possible and in accordance with the conditions that shall be defined by the reserve connecting TSO.


7. An FCR providing unit or FCR providing group with an energy reservoir that does not limit its capability to provide FCR shall activate its FCR for as long as the frequency deviation persists. For the GB and IE/NI synchronous areas, a FCR providing unit or FCR providing group with an energy reservoir that does not limit its capability to provide FCR shall activate its FCR until it activates its FRR or for the period specified in the synchronous area operational agreement.


8. A FCR providing unit or FCR providing group with an energy reservoir that limits its capability to provide FCR shall activate its FCR for as long as the frequency deviation persists, unless its energy reservoir is exhausted in either the positive or negative direction. For the GB and IE/NI synchronous areas, a FCR providing unit or FCR providing group with an energy reservoir that limits its capability to provide FCR shall activate its FCR until it activates its FRR or for the period specified in the synchronous area operational agreement.


9. For the CE and Nordic synchronous areas, each FCR provider shall ensure that the FCR from its FCR providing units or groups with limited energy reservoirs are continuously available during normal state. For the CE and Nordic synchronous areas, as of triggering the alert state and during the alert state, each FCR provider shall ensure that its FCR providing units or groups with limited energy reservoirs are able to fully activate FCR continuously for a time period to be defined pursuant to paragraphs 10 and 11. Where no period has been determined pursuant to paragraphs 10 and 11, each FCR provider shall ensure that its FCR providing units or groups with limited energy reservoirs are able to fully activate FCR continuously for at least 15 minutes or, in case of frequency deviations that are smaller than a frequency deviation requiring full FCR activation, for an equivalent length of time, or for a period defined by each TSO, which shall not be greater than 30 or smaller than 15 minutes.


10. For the CE and Nordic synchronous areas, all TSOs shall develop a proposal concerning the minimum activation period to be ensured by FCR providers. The period determined shall not be greater than 30 or smaller than 15 minutes. The proposal shall take full account of the results of the cost-benefit analysis conducted pursuant to paragraph 11.


11. By 6 months after entry into force of this regulation, the TSOs of the CE and Nordic synchronous areas shall propose assumptions and methodology for a cost-benefit analysis to be conducted, in order to assess the time period required for FCR providing units or groups with limited energy reservoirs to remain available during alert state. By 12 months after approval of the assumptions and methodology by all regulatory authorities of the concerned region, the TSOs of the CE and Nordic synchronous areas shall submit the results of their cost-benefit analysis to the concerned regulatory authorities, suggesting a time period which shall not be greater than 30 or smaller than 15 minutes. The cost-benefit analysis shall take into account at least:


(a) experiences gathered with different timeframes and shares of emerging technologies in different LFC blocks;


(b) the impact of a defined time period on the total cost of FCR reserves in the synchronous area;


(c) the impact of a defined time period on system stability risks, in particular through prolonged or repeated frequency events;


(d) the impact on system stability risks and total cost of FCR in case of increasing total volume of FCR;


(e) the impact of technological developments on costs of availability periods for FCR from its FCR providing units or groups with limited energy reservoirs.


12. The FCR provider shall specify the limitations of the energy reservoir of its FCR providing units or FCR providing groups in the prequalification process in accordance with Article 155.


13. A FCR provider using FCR providing units or FCR providing group with an energy reservoir that limits their capability to provide FCR shall ensure the recovery of the energy reservoirs in the positive or negative directions in accordance with the following criteria:


(a) for the GB and IE/NI synchronous areas, the FCR provider shall use the methods specified in the synchronous area operational agreement;


(b) for the CE and Nordic synchronous areas, the FCR provider shall ensure the recovery of the energy reservoirs as soon as possible, within 2 hours after the end of the alert state.

 

 

 

 

 

 

 

IMG 0744

    Documentation    

 

 

 

 

 

Network Code on System Operation, Article 3(2)(6), Articles 153 - 156

 

Network Code on Electricity Balancing (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - NC EB), Article 46

 

Proposal for the establishment of common and harmonised rules and processes for the exchange and procurement of Frequency Containment Reserve (FCR) in accordance with Art. 33 of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing, 15 January 2018

 

Draft Proposal for the exemption of the FCR Cooperation Parties from the obligation to allow balancing service providers to transfer their obligations to provide balancing capacity in accordance with Article 34 (1) of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing, 15 January 2018

 

Consultation Report “FCR Cooperation”, 31 May 2017

 

Supporting Document for the Network Code on Electricity Balancing of 6 August 2014

 

 

 

 

 

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    Links    

 

 

 

 

 

ENTSO-E FCR cooperation website

 

Balancing Energy

 

Replacement Reserve (RR)

 

Frequency Restoration Reservee (FRR)

 

Standard Products

 

Balancing Capacity

 

 

 

 

Last Updated on Wednesday, 04 April 2018 16:38
 

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