Aggregation pilot project in the balancing energy market continues
Fingrid is continuing a pilot project for independent aggregator operating models in the balancing energy market until the end of 2019. This will provide time to obtain the practical experiences needed for broader implementation of the model. It is important to facilitate participation of independent reserve providers so that decentralised flexibility can more readily participate in maintaining the system balance.
Fingrid is continuing a pilot of independent aggregator operating models in the mFRR market with its partners Helen Oy and Voltalis S.A. until the end of 2019 because the project did not produce enough practical experiences in its first year. In 2018, the partners selected for the pilot prepared the technical installations needed to control the flexibility sites. Helen and Voltalis expect to achieve the required readiness in early 2019, after which parties can begin to submit bids on the Nordic balancing market.
The aggregator pilot involves testing how independent reserve providers from outside the balancing chain can participate in the balancing energy market. Among others, experiences are being sought regarding:
- Submission of bids aggregated from the balance of another balance responsible party,
- Transactions and imbalance adjustment processing, and
- Information exchange between different parties.
Based on experiences gained during the pilot, decisions can be made about the details of an independent aggregator model that can be used in the balancing energy market.
Different aggregator models have been widely discussed in the energy industry in recent years. In its final report, the Smart Grid Working Group of the Ministry of Economic Affairs and Employment recommended that independent aggregators should be allowed to operate in all electricity marketplaces. Fingrid’s pilot promotes implementation of the model recommended by the Smart Grid Working Group in energy-based electricity markets. The European recently approved Clean Energy Package also calls for implementation of independent aggregator operating models.
Allowing reserve providers from outside the balancing chain will give customers that own flexible resources more options in relation to flexibility service providers. It will also allow companies to specialise in, for example, a certain technology when participating in the flexibility market. The new operating model will increase competition in different electricity marketplaces. This will bring more flexibility potential to the market and the power balance, which will be increasingly important as the amount of weather-dependent production continues to grow.
Aggregation means combining smaller production, consumption and storage sites that are capable of balancing into larger entities and offering them to different electricity marketplaces. 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 containment reserves (FCR-N and FCR-D).
Balancing chain means the open chain of electricity deliveries. The parties in this chain have mutual agreements regarding management of the electricity balance, in other words, procurement and deliveries of electricity. For example, an electricity supplier delivers electricity to a small consumer, and the retailer subsequently has a balance responsible party with regard to her electricity balance errors. Fingrid balances the electricity balances of the balance responsible parties.
Read an earlier bulletin about the pilot: https://www.fingrid.fi/sivut/ajankohtaista/tiedotteet/2017/helen-ja-voltalis-fingridin-kumppaneiksi-saatosahkomarkkinoiden-aggregointipilotteihin/
Proposal by the Smart Grid Working Group of the Ministry of Economic Affairs and Employment: https://tem.fi/alyverkot