PC_2024_E_02_Public consultation on the amendments to the automatic frequency restoration reserve implementation framework and pricing methodology

On 7 February 2024, ACER has received the Transmission System Operators’ (TSOs’) proposal to amend:

• the common methodology for harmonising the pricing balancing energy and cross-border capacity; and

• the  implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation (aFRR).

The pricing methodology establishes a harmonised approach for calculating prices across the different EU balancing platforms and increases the efficiency of the balancing energy markets.

The aFRR implementation framework describes the design of the platform for the international coordination of automated frequency restoration and stable system operation (PICASSO), which is a key element in the European balancing markets integration.

In relation to the pricing methodology, the TSOs are proposing to:

• Reduce the technical price limits of the integrated balancing energy markets from 99,999 to 15,000 EUR/MWh. This implies that balance service providers will not be allowed to bid below -15,000 EUR/MWh or above 15,000 EUR/MWh, after July 2026.

• Lower the transitional price limit (valid until July 2026) to 10,000 EUR/MWh. Similarly, during this transitional period, balance service providers will only be allowed to bid between the price range from -10,000 to 10,000 EUR/MWh.

• Use an alternative way to compute the prices from the PICASSO platform to better reflect the bids activated by the TSOs.

In terms of the aFRR implementation framework, the TSOs propose introducing the possibility of using an elastic demand. This would allow them to price a segment of their demand and therefore establish a threshold beyond which they are unwilling to activate balancing energy. This would improve the TSOs' ability to manage the balance between cost efficiency and the need for maintaining high-quality frequency.

To inform its decision-making process, ACER invites stakeholders to submit their inputs.

For more information, please contact: 

• ACER-ELE-2024-003@acer.europa.eu (for aFRR implementation framework),

•  ACER-ELE-2024-004@acer.europa.eu (for pricing methodology).

Link to survey.

Privacy statement.

Pricing methodology:

• All TSOs’ amendment proposal 
• Explanatory note

AFRR implementation framework:

• All TSOs’ amendment proposal 
• Explanatory note

ACER will hold a webinar on 8 April 2024 to present and discuss the main elements of this public consultation.

ACER will reach a decision by 7 August 2024.