Business Context

Overall process overview

Manual frequency restoration reserves (mFRR) are one of several different types of Balancing Services that TSOs use for balancing of the Nordic transmission grid.

Since 2016 Fingrid has been procuring mFRR capacity (up-regulation) to maintain enough mFRR balancing bids to cover the dimensioning fault in Finland. From the beginning of 2023, Fingrid also started to procure capacity for down-regulation. The procurement of mFRR capacity is done on a common Nordic market which is run in Fifty’s NMMS (Nordic Market Management System). On the Nordic market, the capacity is procured in the most cost-efficient way taking into consideration the obligations for different bidding zones as well as the transmission capacities between these bidding zones. It is possible to reserve transmission capacity between areas to some extent, if the socio-economic benefit of the reservation is bigger than saving the the transmission capacity for the day-ahead electricity market.

Balancing Service Providers (BSPs) submit their bids directly to the Nordic platform (NMMS) where a common clearing algorithm determines the bids that are accepted. The information about the accepted bids is sent to the BSPs as well as to the TSO. Accepted bids on the capacity market mean that the BSP has an obligation to submit the same amount of bids to the energy market. This way sufficient up/down regulation capacity is ensured. BSP receives a capacity compensation even though the energy bids would not be activated in the energy market. Activated energy market bids are remunerated separately.