New regulations have created significant costs for actors in the electricity market. This has caused problems for, among others, producers of renewable electricity, suffering high fees for inaccuracies in production forecasts. Higher imbalance costs also increase the electricity price for all consumers. The energy services company CheckWatt, together with its customers, has begun to alleviate the cost for these imbalances by delivering the ancillary service mFRR at scale, which simultaneously generates increased profits for the battery owners.

mFRR (manual frequency restoration reserve) is specifically intended to address these imbalances, which are becoming increasingly common due to the growing share of renewable energy production, which is more difficult to forecast. Since May, CheckWatt has been delivering the ancillary service mFRR.

– When we and our customers help solve grid imbalances, renewable energy becomes more profitable, which in turn leads to cheaper electricity. This accelerates electrification in sectors such as industry and transport, and thus the transition away from fossil fuels, says Dan-Eric Archer, CEO of CheckWatt.

At the end of May, CheckWatt delivered mFRR for the first time – initially with 2 megawatts (MW) from a large battery in bidding area 4 (SE4) in southern Sweden, with Bixia acting as the so-called balance responsible party and thus financially accountable for discrepancies between forecasts and actual outcomes.

Now the next step is being taken, and the first deliveries at a larger scale have begun, also via Bixia. Initially, larger battery systems in the southern Sweden – in bidding areas SE3 and SE4 – are contributing. Some household batteries in SE4 are also included. Initially, up to 10 MW is delivered in each area. As soon as possible, all batteries aggregated by CheckWatt – currently totaling about 300 MW across Sweden, Finland, and Denmark – will provide flexibility to the respective mFRR markets.

The need for more resources delivering mFRR has grown rapidly. In addition to the increasing amount of solar and wind power—providing cheap electricity—a major factor is the new rules introduced by Svenska kraftnät in March with the launch of a new market: mFRR EAM (energy activation market). This market sets the price for imbalances that arise when production and consumption deviate from forecasts. As a result, there have been more instances of extreme prices on mFRR, leading to significantly increased risks of high costs passed on to consumers and power producers—something frequently highlighted in the media during the spring. This also means that mFRR is currently by far the most lucrative revenue source for battery owners.

When CheckWatt, as an independent aggregator, connects smaller electricity resources and delivers mFRR, it must do so in collaboration with a balance responsible party who bears the financial risk for any resulting imbalance. CheckWatt collaborates with most balance responsible companies active in Sweden to enable all of its approximately 15,000 customers with batteries connected to CheckWatt’s virtual power plant in Sweden to deliver mFRR.