By 2025, battery energy storage systems could account for one-third of the European Automatic Frequency Recovery Reserve (aFRR) market share, according to research firm forecasts. The market will launch in the middle of this year, with France and Germany sharing its services first.
Corentin Baschet, an analyst at consultancy Clean Horizon, said recently that the company has carried out extensive research work on the upcoming PICASSO project, which plans to achieve mutual benefits in the aFRR market in Europe. He said France and Germany would launch the scheme by co-delivering services in mid-2022, a little later than originally planned (scheduled for the first quarter).
The project has sparked scrutiny of market rules that exclude energy storage from the secondary reserve market in most countries in Europe, a situation that is expected to change with the introduction of the new aFRR scheme.
“Increasing the participation of battery energy storage systems is part of the PICASSO project, but it is not a priority for them, and there will still be a large number of traditional energy assets involved,” Corentin said.
We believe that by 2025, if regulations and price signals improve, a third of the aFRR market in Western Europe could be for battery storage systems. Thus, in Germany alone, the installed capacity of energy storage systems in the Automatic Frequency Recovery Reserve (aFRR) may reach 500 MW. "
Belgium’s rules are more friendly to energy storage, he said, with more than 30MW of battery storage systems in the aFRR market today, including a 10MW battery storage system optimized by Centrica Business Solutions, which joined last December.
“Belgium will deploy more than 200MW of storage to seize this opportunity,” he said, adding that 130MW/450MW battery storage projects were awarded in the most recent capacity market auction.
He explained, “The purpose of sharing aFRR services across borders is to reduce costs. This may be because the cost of aFRR in France is more expensive than in Germany, so if the cross-border export of energy is activated, it can reduce the cost of ancillary services and ultimately reduce costs for consumers , and balance grid operations.”
He noted that primary reserves have the fastest response requirements (activated within 30 seconds of receiving a signal), followed by secondary reserves, also known as automatic frequency recovery reserves (aFRR), which are designed to restore grid operating frequencies to its nominal value. Automatic Frequency Recovery Reserve (aFRR) typically takes longer to activate, which means that the energy storage system needs to inject or draw power from the grid within minutes to hours.