Balancing Capacity in Germany

Background

Main goal of the German transmission system operators (TSO) is to balance generation and demand of electricity within their load frequency control areas (LFC areas) at any point in time. To do so, TSOs use different types of balancing services (frequency containment reserve (FCR), automatic frequency restoration reserve (aFRR) and manual frequency restoration reserves (mFRR), which differ regarding type and time of activation. Since 2001, German TSOs procure the required FCR, aFRR and mFRR on an open, transparent and non-discriminatory market according to the requirements of the national regulation authority. The overall amount of balancing capacity in Germany is reduced by the cooperation of the transmission system operators in the German Grid Control Cooperation (GCC).

Prequalification

To be able to participate in the balancing markets, power plant operators or aggregators must meet various requirements. The TSO verifies this as part of the standardized prequalification process. Relevant documents are available at  www.regelleistung.net/.

Since January 1^st, 2025, units connected in Luxembourg can be prequalified to participate at all balancing markets in Germany. Previously (since January 1^st, 2020), this has only been possible for FCR. Units connected in Luxembourg can be prequalified by either existing balancing service providers or other market participants either in Luxembourg or Germany (after concluding the relevant contracts). To facilitate this, the two transmission system operators Creos and Amprion have developed a cooperation model. Amprion prequalifies the plants and serves as the contracting party for providers who want to participate in the balancing markets using units connected in Luxembourg.

Dimensioning

The FCR demand is determined on European level. According to the Guideline on System Operation (GL SO) the deterministic dimensioning incident in the Continental European synchronous area is 3,000 MW. Based on a stochastic approach, it may increase if the target parameters of system frequency are missed. The distribution of the required FCR to the LFC areas is annually calculated on basis of each LFC area’s power generation and demand.
For the determination of the required capacity of aFRR and mFRR, the German TSOs use a joint dimensioning methodology. Since December 9^th, 2019, the required balancing capacity is no longer dimensioned quarterly but dynamically for every four-hour block. This new dimensioning methodology takes into account the changing regulatory framework, especially GL SO.

Procurement

Balancing capacity is procured on a daily basis. For all balancing services, the minimum bid volume and bid increment is 1 MW. FCR contracted exclusively based on the offered capacity price applying marginal pricing. For frequency restoration reserves, a balancing energy market has been introduced in 2020. Since this year, balancing capacity and balancing energy are procured separately. Introducing the balancing energy market is one national requirement to enable the European domestic market for balancing energy in accordance with Article 16(5) of Guideline Electricity Balancing (GL EB). It offers balancing service providers the opportunity to update the balancing energy prices of bids awarded in a balancing capacity auction and/or to submit new bids (without a capacity price). For aFRR and mFRR, pay-as-bid pricing is applied at the balancing capacity market while marginal pricing is applied at the balancing energy market.

Activation of balancing energy

FCR is activated decentrally in the entire synchronous area according to system frequency deviation applying the solidarity principle. FRR is activated in the LFC area causing the imbalance. aFRR is activated automatically to replace FCR, whereas the TSOs request the use of mFRR manually.

Publication

Tender results (e. g. volumes and prices) are published on  www.regelleistung.net.