The energy transition is bringing big changes. One of the biggest challenges is keeping the power grid in balance. In the Netherlands, the Automatic Frequency Restoration Reserve (aFRR) plays an essential role in maintaining this balance. But what exactly is aFRR and why is it so important?
What is aFRR?
aFRR stands for automatic frequency recovery reserve. It is one of three mechanisms deployed by TenneT, the Dutch grid operator, to maintain the grid frequency at 50 Hz. Whereas FCR (Frequency Containment Reserve) provides the initial rapid response to frequency fluctuations and mFRR (manual Frequency Restoration Reserve) is activated manually, aFRR is an automated process that responds to deviations within minutes.
How does aFRR work?
When a 50 Hz deviation cannot be restored by FCR, aFRR is automatically activated via a signal from TenneT. This signal is transmitted to market participants such as Covolt, who adjust their power. This process takes place within minutes and helps to stabilize the grid quickly without manual intervention (mFRR).
Why is aFRR important?
- Power grid reliability - Without effective balancing mechanisms, frequency fluctuations can lead to outages and even blackouts.
- Efficiency - aFRR provides faster and more efficient grid stabilization than manual corrections.
- Integration of renewable energy - With the growth of wind and solar power, energy production is becoming more volatile. aFRR helps to accommodate these fluctuations without relying on fossil backup power plants.
How do you make money with aFRR?
aFRR offers not only stability, but also an opportunity to generate revenue. When you as a solar panel or battery owner have your panels/battery controlled, by companies like Covolt, it offers an opportunity to get additional income without active effort. There are several ways this can be done:
- Compensation for availability - Covolt ensures that your solar power is flexibly available to the grid. You will receive compensation for this, even if your power is not being used.
- Compensation for activation - When the grid needs extra power or needs to shut down, your energy is put to use. For this, you get an extra reward.
- Smart trading and optimization - Covolt uses smart algorithms to best trade your renewable generated and maximize yield.
- Impact on imbalance prices - aFRR helps keep the grid stable. This affects imbalance prices, which in turn affects your income.
PICASSO platform and international cooperation
Since October 18, 2024, TenneT has been connected to the PICASSO platform. This platform makes it possible to exchange control power with other connected countries, such as Germany and Denmark. TenneT activates foreign bids if they are cheaper than national aFRR options.
Connection to PICASSO helps to reduce strong grid fluctuations, especially due to extremely low electricity prices. In the past, this created "regulation status 2," where correction mechanisms failed and parties in the imbalance market were unable to generate revenue. As a result of PICASSO, TenneT expects fewer control status 2 situations.
Dutch aFRR prices have historically been lower than international aFRR prices, so joining PICASSO has a positive effect on the returns of Dutch market participants active in free aFRR bids.
Future of aFRR in the Netherlands
With the growth of Battery Energy Storage Systems (BESS), aFRR is becoming increasingly important and broadly applicable. Battery control significantly increases grid flexibility. In addition, the aFRR market is becoming more accessible to smaller players, resulting in more providers. This can lead to lower prices and revenues, as in any competitive market.
However, the energy market remains dynamic, and aFRR is just one of many changes that will shape the future of the power grid.
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