Frequency Market: How Your Battery Solution Becomes a Profitable Reserve

The frequency market (or reserve market) is a critical mechanism for the stability of the electricity system, through which the grid frequency is kept consistently at 50 Hz. Frequency stability is essential, as excessive fluctuations can cause power outages or equipment damage. The frequency constantly fluctuates depending on whether electricity generation or consumption dominates in the grid.

1. Why is the frequency market important for Estonia?

While previously the Baltic frequency maintenance largely relied on the Russian system, from February 2025, the Baltic states will join the Continental European synchronous area. From that moment, Estonia (through its system operator Elering) must manage its own frequency, which opens up significant new opportunities for all market participants capable of offering flexible power.

2. Who and How Participates in the Market?

Participants in the frequency market offer power reserves that Elering can quickly activate if needed (within seconds or minutes) to correct the frequency.

Today, technology allows a wide range of distributed energy resources (DER) to be integrated into the system, creating a common virtual power plant from them:

• Energy Storage Systems (BESS): Industrial battery parks, commercial building storage, and home batteries.
• Generation Plants: Solar farms, gas power plants.

Flexible Consumption: Equipment in industrial enterprises that can temporarily manage consumption.

3. Three Types of Frequency Reserves (as of February 2025)

Reserves are divided into three products based on their speed and activation time, which Elering procures:

1. Primary Reserve (FCR): The primary and fastest response (within seconds) to frequency changes to stabilize the frequency.
2. Secondary Reserve (aFRR): An automatic and slightly slower reserve that restores the frequency to its nominal value (50 Hz) by replacing the FCR's operation.

  3. Tertiary Reserve (mFRR): Manually activated power reserves (by the dispatcher), used to maintain long-term balance and free up other reserves.

4. Why is it beneficial for battery solutions to join the frequency market?

Regardless of whether it's a home or industrial battery, market participation provides an additional source of income without restricting the device's primary use (e.g., self-consumption, UPS).

1. Passive Income from Investment

• Capacity Fee: You receive monthly financial compensation simply for your battery being ready to be available to the market within a certain capacity. This fee is paid to your account regardless of whether the reserve was used.
• Usage Fee (rare): If your battery's energy is actually used for frequency correction, you receive a separate payment for the energy sold.

2. Optimal and Automatic Management

The Virtual Power Plant platform manages the system automatically:

• Prioritizing Your Use: The software ensures that the battery is always sufficiently charged and remains available for your preferred functions (e.g., self-consumption, emergency power), offering only surplus capacity to the market.

Dual Benefit: The system often optimizes battery operation in parallel with both the frequency market and your peak shaving management, thereby offering a double financial benefit.

‍