The Essential Role of Ancillary Frequency Services in Europe

What Are Ancillary Services??Ancillary services are essential to keep the grid balanced and efficient, so that it can fulfil its primary role of delivering electricity. In simple terms, ancillary services are part of the mechanism that ensures that supply and demand stay in harmony on the grid. While we typically think about power generation when we discuss decarbonising electricity, keeping the grid resilient while doing so – via services like?grid frequency control?– is equally crucial.

Why Does Frequency Control Matter? The grid operates on alternating current (AC), meaning that the current flows in a sinusoidal wave at a standard frequency—typically 50Hz or 60Hz, depending on the region. Controlling frequency is essential; if it fluctuates too much, the stability of the entire grid is compromised, putting infrastructure and safety at risk.

Traditional thermal spinning generators, for all their carbon crimes, are actually very good at maintaining grid frequency. These generators spin in sync with the grid, naturally providing “inertia”—the grid’s built-in resistance to sudden changes. This inertia smooths out abrupt shifts in supply or demand, helping to maintain a steady frequency.

Challenges with the Shift to Renewables As we transition to a decentralised, renewable-heavy grid, fewer traditional thermal generators are available to stabilise frequency. Solar and wind are DC generators that use inverters to transform their DC current to AC current. While these inverters can control the frequency of the generator, they do not contribute to the stability of grid frequency in the same way as thermal generators. This creates challenges in keeping the grid frequency stable amid rapid changes in electricity supply or demand.

Batteries to the Rescue! Here’s where innovation steps in. Battery Energy Storage Systems (BESS) have emerged as a promising solution for frequency control. These batteries can, with extremely fast response times, inject power into the grid to raise the frequency or absorb it to lower the frequency, offering flexibility and resilience in real-time.

The Role of Transmission System Operators (TSOs) The responsibility of maintaining frequency balance lies with Transmission System Operators (TSOs). TSOs continuously monitor supply and demand, procuring the necessary BESS capacity to adjust frequency levels. While some TSOs use direct contracts to procure ancillary services, many operate open markets where providers compete. Rules vary by region, with different requirements for how long assets need to be available, which services can be stacked, and the procurement order.

For an insightful introduction to how these markets work in Europe, watch Laura’s video.

Industry Insights: Germany’s Innovation Auction Results

Since 2020, Germany’s Federal Network Agency, Bundesnetzagentur (BNetzA) has been holding biannual auctions targeting the development of new generation capacity. In its September 2024 auction, 583 MW of PV and ~583 MWh of BESS were awarded. The bids require innovation in that the projects need to contain multiple generation types or have generation co-located with storage. The vast majority of awarded bids were combined solar and storage. The auction was more than three times oversubscribed in terms of bid capacity. Prices dropped too compared to previous auctions with the highest bid awarded 1.73c/kWh less than the ceiling.

As negative pricing increases, standalone PV projects look to be less favourable and benefit the economics of co-located projects. Will we see this as a trend across Europe? See the graph below which shows the tail end of the price duration curve for a few European countries.

Industry Insights: EPRI Launches DCFlex Initiative

Data Centers are getting bigger, with the capacity of new facilities being measured in hundreds of megawatts or gigawatts. Data Centers are projected to consume up to 9% of U.S. electricity by 2030.

This massive growth in energy demand creates both challenges and opportunities for the grid. To address these demands, EPRI has recently launched 'DCFlex', a new initiative bringing together major players like Google, Meta, NVIDIA, and Utilities to leverage Data Center flexibility for grid support.?

With good planning and modelling Data Centers will not only meet their power needs but also aid grid reliability, helping to balance peak loads and integrate more renewable energy into our power systems.?

Did you know Gridcog can already model DC Flex, co-optimising flexibility with on-site storage and generation and off-site renewable procurement.

All Energy Australia October 23 & 24?

More than 10,000 people visited the All Energy conference in Melbourne this year, and Gridcog’s Australian crew were amongst the masses.?

Our stand at the expo was a very popular stop with All Energy visitors. And whilst we were run off our feet with on-site demonstrations of the software, we couldn’t get enough of nerding-out about the energy system transition with our customers, future prospects, and industry partners.?

The conference sessions where our colleagues spoke had audiences queuing to get in!? Called by some, ‘the best conference session at All Energy this year’, our Flexibility Markets Lead Alex Leemon joined a great panel chaired by Dr Alison Demaria, who works with one of our clients, CS Energy. Alex’s talk at the event was on Big Battery Revenues in the NEM. If you weren’t able to attend the session, we’ve shared the content of his talk in this blog post.?

Product Corner: Ancillary Service Revenue in Gridcog

Ancillary service markets typically have a number of important and sometimes complex rules that need to be honoured by assets looking to earn revenue in them. Gridcog has many features that allow you to adjust the settings of the asset participating in the service, as well as the market settings.?

The animation below shows how you can configure ancillary service type, service availability & activation prices, trading block duration, direction of the service, acceptance percentage and energy utilisation rate. We also make the historical ancillary service prices automatically available to be used in your projects.

That’s all for this week. If you’d like to see how Gridcog can model your energy projects, click here to book a call with our team.

Or, if you have any interesting project use-cases you’d like to see modelled in Gridcog, email our marketing magician [email protected] and we’ll spin it up!