Even with diligent planning and BRP efforts, the energy grid constantly faces unexpected challenges. Imbalances can arise, and within each 15-minute wholesale settlement period, the moment-to-moment flow of electricity can be mismatched even if the 15-minute average eventually balances out. This is where Ancillary Services step in.
Both automatic Frequency Restoration Reserve (aFRR) and Frequency Containment Reserve (FCR) serve a similar crucial role: balancing supply and demand on a moment-by-moment basis to ensure the grid remains stable.
Both FCR and aFRR markets operate as day-ahead auctions, with results published before the close of the wholesale Day-Ahead auction. This allows market participants to bid their capacity into both types of markets simultaneously.
aFRR: Correcting Unexpected Imbalance
The primary problem solved by aFRR is unexpected imbalance — when a generator or consumer fails to deliver what they committed to in the wholesale market, causing a sustained deviation in the overall energy balance.
Here is how aFRR works for an asset owner:
- Bidding for availability: You bid into the aFRR market, offering to make a certain amount of your battery’s power capacity (MW) available to the TSO for last-minute dispatch.
- Capacity payment: If your bid is accepted, you receive a capacity price for keeping that portion of your battery’s capacity reserved and ready. You cannot use that capacity for wholesale trades during that period — it is held exclusively for the TSO. This is like receiving a retainer fee to have an emergency vehicle on standby.
- TSO dispatch: If an imbalance occurs, the TSO sends a direct signal to your battery via the Ancillary Services Pool Box on its Gateway, telling it to charge or discharge immediately to bring the grid back into balance.
The Two aFRR Markets
The aFRR market has two intertwined components:
1. The aFRR Capacity Market
- Purpose: Where TSOs procure the guaranteed availability of aFRR power.
- Bidding: When bidding into the capacity market, you must simultaneously submit a bid for the energy market (see below).
- Granularity: Bids are submitted in EFA blocks — standard 4-hour periods (e.g. 00:00–04:00, 04:00–08:00, etc.).
- Payment: If your bid is accepted, you receive the capacity price for keeping the designated power capacity available and ready throughout that 4-hour block.
2. The aFRR Energy Market
- Purpose: Where the actual energy (MWh) is exchanged when the TSO activates your capacity.
- Payment/charge: If the TSO activates your capacity:
- If they tell you to discharge (inject power), they additionally pay you the energy price for the actual energy delivered.
- If they tell you to charge (absorb power), you typically pay them the energy price for the energy absorbed.
- Energy-only bids: You can also bid only into the aFRR energy market. These bids are at 15-minute granularity and are traded in a continuous intraday market. There is no capacity payment for energy-only bids, because the timeframe is too short to warrant compensation for making capacity available without activation.
aFRR provides a crucial service by standing ready to correct unexpected imbalances, with its two-part market structure ensuring providers are compensated for both their availability and their actual energy delivery. Last modified on April 20, 2026
