Wind turbines with data visualization and electricity market statistics for control reserve and flexibility

Our statement on the Transmission System Operators’ consultation regarding 15-minute products for aFRR and mFRR, and our outlook on FCR – A plea for more market dynamism.

The German Transmission System Operators (TSOs) have recently launched a consultation on increasing the flexibility of the balancing power market. The core of the proposal is the introduction of significantly shorter 15-minute product time slices for automatic Frequency Restoration Reserve (aFRR) and manual Frequency Restoration Reserve (mFRR), in addition to the existing 4-hour products. As QAES Europe GmbH, a leading provider in the field of Battery Energy Storage Systems (BESS), we expressly welcome this proposal. Furthermore, we also consider the evaluation of 15-minute products for Frequency Containment Reserve (FCR), initiated through a voluntary survey, to be an important and appropriate step. From our perspective, this flexibilization is essential to better leverage the potential of modern technologies like BESS for grid stability and the energy transition.

Background: The Need for Shorter Products in the Balancing Power Market

The current balancing power market in Germany is based on 4-hour products for aFRR and mFRR. This design dates back to a time with less volatility in the power grid. However, with the rapid expansion of renewable energies such as photovoltaics (PV) and wind power, the demands on system flexibility are increasing. The TSOs justify their proposal, among other things, by wanting to lower market entry barriers for PV systems.

At QAES Europe, however, we see an even greater lever: the optimal integration of Battery Energy Storage Systems. While a previous survey already indicated that BESS operators favour such flexibilization, we want to outline our reasons here why we not only support this step but consider it necessary.

Why 15-Minute Products for aFRR and mFRR are a Win for BESS (and the Grid)

Battery storage systems are predestined for providing balancing power. Their millisecond-fast response capability and precise controllability, however, are inadequately utilized by rigid 4-hour blocks. The introduction of 15-minute products offers decisive advantages here:

  1. Better Reflection of Technical Capabilities: Shorter products allow BESS to offer their power much more accurately and dynamically, reflecting their technical capability for rapid power adjustment.
  2. Improved Forecasting Accuracy: Predicting the State of Charge (SoC), availability, and market price developments is significantly more precise for 15 minutes than for 4 hours. This considerably reduces marketing risks.
  3. Reduced Opportunity Costs: A commitment of only 15 minutes instead of 4 hours allows BESS to react more flexibly to other market opportunities (e.g., intraday arbitrage). Revenue stacking is facilitated, improving the economic viability of storage.
  4. More Efficient SoC Management: The need to maintain large energy buffers for long periods is eliminated or reduced. SoC management becomes simpler and allows for more efficient operation of the storage systems.
  5. Market Alignment: The shift to 15-minute products aligns with the European trend towards shorter trading and settlement intervals (e.g., 15-minute intraday market, 15-minute imbalance settlement period) and promotes the integration of European electricity markets.

For these reasons, in our feedback to the consultation, we clearly advocated for the introduction of 15-minute products for aFRR and mFRR.

Outlook: The Potential of 15-Minute Products for FCR

In addition to the official consultation, the TSOs also conducted a voluntary survey on the introduction of 15-minute products for Frequency Containment Reserve (FCR). Here too, QAES Europe sees great potential and has provided corresponding feedback:

We believe the introduction of 1/4 h products for FCR is sensible. We are convinced they help BESS offer additional flexibility in FCR. Our feedback highlights the positive aspects: The measure supports the technical capabilities of BESS, improves SoC planning, and reduces opportunity costs through easier revenue stacking. At the same time, we emphasize the need for clear, adapted market rules (especially for SoC management and prequalification) and see the chance for better European harmonization.

Although FCR has different requirements (continuous availability, symmetrical activation), we believe the advantages of shorter time units also prevail here and can further improve the integration of BESS in this market segment.

Conclusion: An Important Step in the Right Direction

The flexibilization of the balancing power market proposed by the German Transmission System Operators through the introduction of 15-minute products for aFRR and mFRR is a long overdue and important step. QAES Europe fully supports this initiative. It enables battery storage to leverage its strengths more effectively, reduces risks, and improves economic viability – ultimately leading to more investment in urgently needed flexibility.

We also welcome the initiative to examine similar flexibilization for FCR and encourage the TSOs to consistently pursue this path. Only through modern and flexible market designs can we master the challenges of the energy transition and shape a stable, cost-efficient, and renewable energy system for the future.

 

For more information, visit our website: qaes.eu.