What is a balancing market?
Svenska kraftnät is responsible for maintaining the balance between electricity consumption and generation in the Swedish electricity system. This means making sure that the frequency is as close to 50 Hz as possible at all times, every single second, so as not to risk serious disturbances in the grid. To do this, SvK purchases and activates ancillary services to be able to up or down regulate the production or consumption of electricity when needed. This is called frequency control or balancing market.
Support services
There are several different ancillary services, many of which are compatible with energy storage as they can be used for both up and down regulation. They are all fully market-based, which means that they are procured openly in competition using bidding in each market. Remuneration and regulations are based on the principles applicable to each market. You can’t predict what the reimbursement will be, but looking at historical data and future needs, the market in the next few years looks very profitable. An energy storage system from us meets the technical requirements to qualify for support services.
What can you gain from supplying reserves?
How much you can earn depends on how much volume you have available to bid into the reserve markets and the price you choose to bid.
By looking at historical prices for called volumes, you can get an indication of how much you can earn by being active in the markets and how to price your bids.
Capacity payment = Price (marginal price or bid price) * sold capacity (MW)
Energy compensation = Price (up or down regulation price) * activated energy (MWh).
Capacity market
A reserve market where volume is bid in and called off, usually one day before the operating day. Capacity compensation is always paid to called bids, even if the resource is not activated. Some capacity markets also provide compensation for the energy actually activated.
Energy activation market
A reserve market where volume is bid in. Calls for tenders are made during the operating hour. Energy compensation is given for the energy actually activated. Capacity compensation is not provided.
How can I participate?
If you have an energy storage facility, it is possible to connect it for support services. You can either help with up or down regulation, or both. When you buy an energy storage system from us, it comes with software programmed to manage the procurement and tendering of support services for you. In other words, the battery does the work itself without you having to do anything. Economically beneficial for you, and a way to create the conditions for both increasing the amount of renewable electricity in the system and electrification.
Want to learn more about the balancing market?
On Svenska kraftnät’s website you can find more information about how the balancing market works and the expected development in the future.
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Hi, I am happy to talk solar energy with you!
Are you interested in what you can get as a landowner in terms of rent? Is your company interested in owning a solar park? Want to know what a PPA might cost? Give me a call or send me an email and I’ll tell you more.