Analysis of a new aFRR market in East Denmark

To ensure security of supply in the electricity system, Energinet buys various types of reserves for the market areas DK1 and DK2, which covers West and East Denmark, respectively. The most important purchases are for stabilisation of frequency (primary reserve – FCR), frequency recovery (secondary reserve – aFRR), and equalising balance (tertiary reserve – manual reserves, mFRR). The reserves contribute to ensure the quality of frequency that has been agreed on.

In East Denmark (DK2) there is currently no local marked for aFRR. Since Energinet’s share of the joint Nordic need for aFRR is very small, Energinet has considered it complicated to establish a national marked in DK2. The need is expected to rise in the coming years, however. A Nordic market for purchase of aFRR capacity is being implemented but is only expected to be operational in 2022 at the earliest.

This task concerned the purchase of aFRR reserves in DK2. Energinet wanted to shed light on the consequences of a possible establishment of a market for purchasing aFRR capacity in the transition period while the Nordic capacity market is put into operation, as well as an analysis of potential suppliers in a future market, and the pricing in the market. This would also give an impression of how suppliers in DK2 can participate and compete in a future Nordic market in the future.

The project ran from April to December 2021.