Introduction of marginal pricing on FCR markets
Starting from February 1st 2024 all FCR markets will apply marginal pricing, also called pay-as-cleared. In addition, the procurement of FCR will transition to a new market platform in 2024.
Frequency Containment Reserves (FCR) has the task of stabilizing the frequency during frequency deviations and is fundamental in maintaining the balance in the power system. There are three different FCR-products – FCR-N, FCR-D upwards, and FCR-D downwards – all of which are procured one day ahead of the delivery period.
Starting from February 1st 2024, all three FCR-products will apply marginal pricing, also called pay-as-cleared.
Introduction of marginal pricing
As of today, providers of FCR are remunerated for accepted bids according to the price given in the bid, also called pay-as-bid. The introduction of marginal pricing means that all accepted bids will be remunerated according to the marginal price in the auction, thus the highest priced accepted bid.
FCR capacity is procured in two supplementary auctions the day ahead of delivery period – D-1. Therefore, there will be two different marginal prices per product and hour. One marginal price per product and hour in the first auction and another marginal price per product and hour in the second auction.
The introduction of marginal pricing will not necessitate any technical changes to bidding and clearing of bids. FCR providers will be contacted to perform testing during December and January.
More information on pricing as well as terms and conditions for FCR is available in Swedish in the Balance Responsibility Agreement.
Transition to a new market management system
The original plan was to transition the procurement of FCR to a new market platform – Fifty Nordic MMS (market management system) on February 1st 2024. However, the new plan is to implement marginal pricing in the current market solution – Fifty MMS. The date for transitioning to Fifty Nordic MMS will be postponed.
The new indicative go-live for transitioning the procurement of FCR to Fifty Nordic MMS is Q2/Q3 2024. This will allow for more time to conduct integration tests with providers of FCR. The transition to Fifty Nordic MMS will imply that bids shall be sent according to Common Information Model (CIM) through ECP. Providers will be contacted for integration tests in 2024.
Svenska kraftnät has published an implementation guide for FCR on Fifty Nordic MMS. The guide covers the technical details of an integration towards the new system and gives information on the necessary processes on providing FCR. Download a first edition of the implementation guide here. (.pdf) Opens in a new window Please observe that changes may occur to the document. The guide can also be downloaded on the Fifty Nordic MMS page. Providers of FCR are encouraged to take part of the information available in the implementation guide.
Contact and more information
Provision of ancillary services
Balance responsibility agreement
For more information, please contact: fcr@svk.se.