Non-frequency ancillary services are services used by Transmission System Operators (TSOs) or Distribution System Operators (DSOs) for:
1. steady-state voltage control,
2. fast reactive current injections,
3. inertia for local grid stability,
4. short-circuit current,
5. black start capability, and
6. island operation capability.
Article 2(49) Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast)
non-frequency ancillary service means a service used by a transmission system operator or distribution system operator for steady state voltage control, fast reactive current injections, inertia for local grid stability, short-circuit current, black start capability and island operation capability
The inclusion in the the said definition of short-circuit current, and island operation capability as well as the supplement as regards inertia that it is “for local grid stability” were the effects of the propositions contained in the Report of the European Parliament’s Committee on Industry, Research and Energy of 27 February 2018 on the proposal for a directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast) (COM(2016)0864 – C8-0495/2016 – 2016/0380(COD)). According to the adopted text of the aforementioned directive, products and procurement processes for non-frequency ancillary services are subject to the approval by regulatory authorities.
Currently, these services are mostly provided by generators but may also be provided by demand facilities, network operation and equipment, as well as energy storage facilities.
Provision of non-frequency ancillary services is often not remunerated (Commission Staff working document of 14 March 2023 on the energy storage - underpinning a decarbonised and secure EU energy system, SWD(2023) 57 final).
The Clean Energy package introduces provisions regarding:
- Transparent and non-discriminatory procurement of non-frequency related ancillary services;
- TSO ownership and control over assets providing non-frequency related ancillary services; and
- A mandate to provide further rules through Network Codes on the provision of non-frequency related ancillary services.
CEER supports a level playing field for the delivery of ancillary services. Market arrangements or market-based compensation, where appropriate, may allow for the most cost-efficient procurement and utilisation of existing and new technologies.
It is, however, important to keep in mind current technical limitations of non-frequency related ancillary services and their geographical limitations (e.g. the ability to supply and or absorb reactive power from distant sources). Due to the local nature of some of these services and therefore the inherent market power concerns, not all non-frequency related ancillary services are well suited for market-based approaches. The optimum design of products is also expected to differ according to the locality. Before being required to carry out a cost benefit analysis to justify non-market based approaches (as per the current Clean Energy package proposals), it would be preferable to assess whether the possibility for a well-functioning market exists for these services.
Therefore, given the existing technical and geographical limitations, rather than predefining a prescriptive requirement for market-based procurement for all non-frequency related ancillary services in European-wide legislation, a more suitable approach would be to allow for more local discretion on a case-by-case basis, taking into account different technical and local circumstances.
A more flexible and principles-based approach would also ensure that innovation in the provision of these services is not inhibited.3 With such an approach, CEER supports further work on a progressive convergence of the principles for the provision of non-frequency related ancillary services. This could be complemented by mapping current practices and sharing best practice among energy regulators in CEER. If this approach does not work and legislation is deemed necessary, and able to demonstrate that it would not have unintended consequences such as inhibiting innovation, CEER considers that a first step should be to build upon existing Network Codes and Guidelines.
CEER also agrees that TSOs and DSOs should coordinate to ensure approaches to accessing these services, which deliver the best outcomes for the system as a whole. In addition, requirements on connectees will remain an important (non-market based) and complementary route to ensuring secure operation of the system. As more activity occurs at local distribution level, and given the variety of local circumstances and large number of DSOs across Europe, regulatory authorities should retain discretion, applying European-wide principles appropriate with local circumstances.
In summary, CEER recommends the following with respect to these issues:
- While market based procurement can be efficient for certain types of non-frequency ancillary services, the local nature of the services and the inherent market power concerns calls for discretion on a case-by-case basis,
- CEER supports a level playing field for the delivery of ancillary services, fair compensation for its provision and appropriate coordination between DSOs and TSOs in accessing these services.
- Mapping current practices and sharing best practice, guided by a progressive convergence on the principles, is a more appropriate means of delivering efficient non- frequency related ancillary services than through a Network Code.
Efficient System Operation, CEER White Paper series (paper # IV) on the European Commission’s Clean Energy Proposals, 16 June 2017CEER White Paper series (paper # IV) on the European Commission’s Clean Energy Proposals, 16 June 2017, p. 3, 4
Report on the proposal for a directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast) (COM(2016)0864 – C8-0495/2016 – 2016/0380(COD)), European Parliament, 27 February 2018, Committee on Industry, Research and Energy
Efficient System Operation, CEER White Paper series (paper # IV) on the European Commission’s Clean Energy Proposals, 16 June 2017CEER White Paper series (paper # IV) on the European Commission’s Clean Energy Proposals, 16 June 2017