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Aggregation Pilot Project in the Balancing Energy Markets

In the aggregation pilot project in the balancing market the offering of balancing bids with aggregation of flexible resources by a party outside the chain of open deliveries of electricity will be tested. Independent aggregator pilot will be open to all interested balancing market participants.

Participation requires balance responsibility and signing the pilot agreement. The piloting period starts on 21.7.2020 and continues until 30.4.2021. Fingrid will separately inform the piloting party when the submission of bids will be possible. Fingrid reserves the right to suspend the pilot in the unlikely case that the pilot has a negative impact on system security.

As energy transition towards clean energy systems evolves, the need for flexibility in the power system increases. Fingrid develops balancing and reserve markets so that the entire flexibility potential of generation, consumption and energy storages can be utilized in markets in order to balance the power system securely and efficiently also in the future. Flexibility offered by actors outside the traditional open delivery chain requires updates to the IT systems, data exchange on the electricity market and the reserve agreements to ensure that the operating models are impartial and effective. Independent aggregator model offers the owners of flexible resources more choices in providing flexibility services, and they make it possible for actors to specialize in a specific technology or operating method, for example.

The previous aggregation pilots implemented with Helen and Voltalis, which have been in progress for a couple of years, have yielded limited results. Challenges in the previous pilots have resulted in improved solutions regarding minimum bid sizes and the information exchange rules and practices regarding the trading and multilateral settlement in the balancing energy markets. During independent aggregator piloting in 2019, balancing offers of independent aggregators were activated six times.

In accordance with the policies of the Clean Energy package of the EU and the Finnish smart grid working group, the operation of independent aggregators must be made possible. Fingrid sees expanding the pilot as an opportunity to test the scalability of the pilot solutions trialled during 2019 before making actual changes to the agreements. Fingrid is participating in the discussion, and when the legislation has been specified, it will make changes to the reserve agreements of the balancing energy market.

Terminology:

Aggregation means combining smaller electricity production, consumption and storage sites that are capable of balancing into larger packages that can be offered on different electricity marketplaces. The aggregation of different resources is already permitted in all electricity marketplaces in Finland.

Independent aggregator refers to an operator that combines flexible resources outside the conventional electricity delivery chain; in other words, an operator that is not the electricity supplier or balance responsible party for the sites. In Finland, independent aggregator activities are already permitted in frequency-controlled reserves (FCR-N, FCR-D and FFR).

Chain of open deliveries of electricity refers to the basic structure of the electricity market, where the different electricity operators have mutual agreements on the management of the electricity balance; in other words, the procurement and delivery of electricity. For example, an electricity supplier that delivers electricity to a small-scale electricity consumer must have a balance responsible party for any errors in the electricity balance. Fingrid balances the electricity balances of the balance responsible parties.