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ALPACA: Cross-Border Balancing Capacity Cooperation for aFRR

The transmission system operators (TSOs) of Austria, Czechia, and Germany have joined forces to establish ALPACA — Allocation of Cross-zonal Capacity and Procurement of aFRR Cooperation Agreement. This initiative, launched in February 2022, builds on the existing Austrian-German aFRR balancing capacity cooperation from 2020, now extending to the Czech TSO, ČEPS a.s.

In addition to these ALPACA Members, TSOs from Hungary, Croatia, the Netherlands, Slovenia, and Switzerland are participating in discussions and monitoring project developments as Observers.

The go-live of ALPACA is planned for Q3 2025, enabling the exchange of aFRR balancing capacity across the AT-CZ and DE-CZ borders. This exchange is closely linked to the PICASSO project, which harmonizes and facilitates the exchange of aFRR balancing energy. As a result, the operation of the PICASSO platform is a key prerequisite for ALPACA’s success.

ALPACA cooperation (as of March 2025)
ALPACA cooperation (as of March 2025)

Objectives of ALPACA

The ALPACA cooperation is designed to:

  • Enhance grid balancing capabilities by improving TSO access to aFRR balancing capacity.
  • Reduce procurement costs by creating a common balancing capacity market.

The cooperation is based on two core pillars:

  1. Common Procurement
    • Harmonized procurement procedures and standard balancing capacity product.
    • Optimization function operated by 50Hertz.

  2. Ensuring Availability of Cross-Zonal Capacity for Capacity Exchange
    • Probabilistic method forecasting the available cross-zonal capacity (CZC) in a way that there is no pre-allocated CZC taken from the energy market.
    • Forecasting tools operated by 50Hertz and APG

How ALPACA Works

  1. Submission of Bids – Balancing Service Providers (BSPs) submit their standard balancing capacity bids to their respective TSO (local procurement platforms).

  2. Procurement Optimization – The bids and TSOs’ capacity demands are sent to the Common Procurement Optimization Function (CPOF), which calculates optimal procurement while considering constraints such as:
    • Minimum required procurement within each LFC block (core share).
    • Limits on balancing capacity exchanged across borders (maximum exchange limits based on the probabilistic forecasting method).

  3. Final Allocation and Notification – The CPOF forwards the results to the participating TSOs and the TSOs finalize the procurement and inform BSPs of the allocated volumes and prices.
Illustration of a future functioning of ALPACA
Illustration of a future functioning of ALPACA

ALPACA Balancing Capacity Product Characteristics

  • Daily procurement
  • Separate procurement for upward and downward aFRR
  • Six 4-hour blocks (00:00-04:00, 04:00-08:00, …)
  • Gate Opening Time (GOT): D-7 10:00 CET/CEST
  • Gate Closure Time (GCT): D-1 09:00 CET/CEST
  • Publication of results: D-1 09:30 CET/CEST
  • Minimum bid size: 1 MW (with 1 MW increments)
  • Bid divisibility: All bids are divisible
  • Pricing mechanism: Pay-as-bid
  • Compliance with SO GL Article 167 – Core shares and exchange limits apply as limitations in the aFRR market optimization.

Governance Structure

  • Steering Committee – The main decision-making body, chaired on a rotating basis among its members. Steering the Expert Group and managing discussions with NRAs and external stakeholders.
  • Expert Group – Working body addressing the market-related and technical topics.

For inquiries, the project bodies can be contacted via the details below.

Documentation & Public Consultations

Documents

  • ALPACA Algorithm Description (expected in Q3 2025)
  • ALPACA Forecasting Tools Description (expected in Q3 2025)

Public Consultations

Contacts

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