Frequency setting an a liberalized environment

Power system frequency is an indicator of the balance between electricity production and consumption. If consumption exceeds production, the frequency decreases; conversely, if production exceeds consumption, the frequency increases. Power system frequency is shared by all users connected to the grid, and has the characteristics of a public good (non-exclusion of any user and non-competition in consumption).

Because it is a public good, frequency control is the responsibility of all Transmission System Operators (TSOs) in the same synchronous area, i.e. an area sharing the same frequency. Frequency control thus belongs to "system services", i.e. the services provided by the power system to users (consumers or producers). Other services, such as voltage regulation or grid restoration, also fall into this category, but are not the subject of this dossier.

In practice, it is mainly the production units that supply the power required for frequency control. In a vertically integrated environment, the means of regulation belong to the frequency controller. In a liberalized environment, the means of regulation (mainly generators) and the regulator (the TSO) are separated. TSOs must then formalize the service they wish to obtain from their suppliers. These services provided to TSOs are called auxiliary services (because they are ancillary to the supply of the "energy" product) and have the characteristics of private goods. They then enable TSOs to provide adequate system services for all users. Naturally, the provision of these services is accompanied by financial flows, the settlement of which varies according to the region under consideration. For example, under the mechanism adopted in France, suppliers of ancillary services are remunerated by the TSO via bilateral contracts. The TSO then invoices the service rendered via the network usage tariff to recover the costs incurred.

This new division of responsibilities has changed the practices of incumbent operators. The aim of this dossier is to describe the main features of these new practices in Europe, and particularly in France:

• the problem in the European context and the definition of frequency control according to the European coordinating bodies ;

• the organization adopted in France to ensure that players meet both technical and regulatory requirements;

• the main costs incurred by producers in adjusting frequency;

• put current practices into perspective by comparing innovative and conventional means of providing frequency control.