Ancillary services in Europe – ‘timid evolution’

smartEn’s new ancillary services map indicates that interest remains in Europe in opening different markets to demand side flexibility but progress is mixed.

In some countries, home to the more innovative TSOs, progress is localised but in others it remains slow, according to the organisation, which last assessed the region’s balancing markets in 2018.

These most advanced countries are Belgium, Denmark, Finland, France, Slovenia, and the Netherlands. They all have different products available, thus facilitating access to different revenue streams.

These conditions have been facilitated through the actions taken on by innovative TSOs like Elia and TenneT Netherlands. They have not only created a good starting point for procuring flexibility services but have also invested in providing transparent data, fostering the activity of flexibility providers.

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smartEn, the European smart energy business association, states that the most significant change in the ancillary services map since 2018 is the move towards higher harmonisation at EU level, prompted by the development of the PICASSO, MARI, TERRE and FCR Cooperation platforms. These have introduced standardised products ensuring requirements that are in line with the technology neutrality principles of the 2019 Electricity Market Directive and Regulation.

However, a significant number of countries have asked for derogations for the connection, delaying the development of these markets.

smartEn says the biggest barriers are linked to the partial implementation of the 2019 Electricity Market Design. This includes the introduction of the aggregator role in national legislation, high minimum bid sizes or too stringent technical requirements, such as has been observed in countries including Austria and Great Britain.

Some countries, e.g. Spain, Romania, Greece and Portugal, impose even higher barriers for demand side flexibility.

Even in the frontrunning countries, important aspects can still be improved, smartEn continues. On the other hand, placing in the lower spectrum does not mean that no improvements have happened, but that they have been insufficient so far and might only require small changes to jump.

For example, Italy is working towards opening the mFRR market, by introducing a new market design with technical requirements open for DR and DERs, which will soon be followed up by a similar market design for aFRR.

smartEn describes the ancillary services market evolution as “timid”, stating that while overall the landscape has improved, given the current energy crisis and the significant needs for balancing that the system will require with further electrification and further deployment of renewables, the efforts made seem insufficient to achieve the EU decarbonisation targets in a cost-effective manner that includes all active consumers.