Procurement of frequency containment reserves from annual market 2025
Fingrid has made a procurement decision on the annual market reserve quantities of frequency containment reserves for the year 2025. Decision is based on the public tender held in September. The growing needs of electricity system reserves and the changed market situation have been reflected in the volumes and prices of the reserve market.
Compared to the 2024 annual market procurement, the annual market 2025 prices of the Frequency Containment Reserve for Disturbances Upwards (FCR-D up), while the annual prices of the Frequency Containment Reserve for Normal Operation (FCR-N) and the frequency containment reserve for disturbances down-regulation (FCR-D down) will decrease. The approved annual market volumes will decrease in all FCR reserves. The lower annual market volume in 2025 combined with the increasing total FCR procurement in 2025 means higher procurement volumes from the FCR hourly market. Fingrid asks all parties to review their possibilities to offer reserves.
As a result of this year's tender, Fingrid will have at most the following amounts of annual market capacity available for 2025:
- 52,5 MW of frequency containment reserve for normal operation (FCR-N)
- 292,4 MW of the up-regulation product of the frequency containment reserve for disturbances (FCR-D up).
- 202,6 MW of the down-regulation product of the frequency containment reserve for disturbances (FCR-D down).
The annual market prices for 2025 are:
- Frequency containment reserve for normal operation (FCR-N): 25,30 €/MW,h
- Up-regulation product of the frequency containment reserve for disturbances (FCR-D up): 4,00 €/MW,h
- Down-regulation product of the frequency containment reserve for disturbances: 8,66 €/MW,h.
The annual market capacity compensation to be paid to reserve suppliers is determined on the basis of a tender according to the most expensive accepted offer (marginal price) separately for each reserve product. The total value of annual market contracts is approximately 32,0 million EUR.
Reserve suppliers who were not selected in the FCR annual market competition can sell their reserve capacity on the hourly market. Participation in the hourly market is possible at any time of the year. The market information for frequency containement reserves can be found here and the contractual terms of reserve suppliers here.
More information:
Taneli Leiskamo, Fingrid Oyj, tel. +358 30 395 5240
Email addresses are in the format firstname.surname@fingrid.fi.
Background:
Fingrid selects the reserve capacity to be acquired from the annual market based on a separately organized tender, for which the reserve supplier can offer reserve capacity located in Finland. Reserve suppliers participating in the annual market confirm the amount of reserve capacity they maintain every day for the following day.
In addition to the annual market, Fingrid acquires frequency stabilization reserve capacity through daily acquisition from the hourly market in Finland and other Nordic countries as well as Estonia (until Baltic synchronization to Continental Europe power system, planned Feb 2025). In addition, Finnish FCR capacity can be sold to other Nordic TSOs. The procurement is carried out by minimizing total costs, but in such a way that the total procurement covers the reserve obligations of Fingrid.
Fingrid's obligations for frequency stabilization reserves in 2025 are as follows:
- Frequency Containment Reserve for Normal Operation (FCR-N) 126 MW
- Frequency Containment Reserve for Disturbances Upwards (FCR-D up) at most 305 MW
- Frequency Containment Reserve for Disturbances Downwards (FCR-D down) at most 294 MW MW1.
1The procurement of the frequency containment disturbance reserve downregulation product (FCR-D down) began on 1 January 2022, and its procurement amount will be gradually increased towards the full obligation. Currently (11/2024), the procurement amount is 266 MW.
The amount of required fault reserves depends on the size of the fault to be measured in the Nordic electricity system. In the case of disturbances, the largest possible individual power change varies depending on the operating situation of the electrical system, but typically the maximum values of disturbance reserves shown above have been needed in most hours. The dimensioning quantities of the frequency stabilization reserves are filled for all hours of the year.
The costs of the reserves are allocated to the pricing of Fingrid's services on a causal basis. The costs of the frequency containment operation reserve for normal operation are covered by the balance service fees paid by the balance responsible parties, and the costs of the frequency containment disturbance reserve are covered by the main grid service fees paid by Fingrid's customers.