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ALPACA

The TSOs of Austria, Czechia, and Germany joined efforts to establish a balancing capacity cooperation for aFRR, ALPACA, which stands for “Allocation of Cross-zonal Capacity and Procurement of aFRR Cooperation Agreement”. ALPACA is a voluntary TSO cooperation based on the current Austrian-German aFRR balancing capacity cooperation which has been established in 2020 and which shall now be extended by the Czech TSO, CEPS a.s.. The TSOs of the cooperation signed a Memorandum of Understanding in February 2022 and are currently exploring the possible ways of exchanging balancing capacity. In addition, the TSOs of Hungary, Croatia, the Netherlands, Slovenia and Switzerland take part in the discussions and observe the progress.

ALPACA cooperation (as of July 2024)
ALPACA cooperation (as of July 2024)

Main Aim of the Cooperation

ALPACA focuses on enhancing the ability of TSOs to balance the grid by improving access to aFRR and on reducing aFRR procurement cost by creating a common aFRR balancing capacity market. After the accessions to PICASSO have taken place, the overall goal is to further integrate the aFRR balancing markets which will lead to price convergence and to a general increase of liquidity of the TSOs’ balancing capacity markets.

Basic Principles of the Cooperation

Balancing Service Providers (BSPs) in their respective LFC blocks submit their standard balancing capacity bids to the TSO of the LFC block. The BSPs’ bids and the TSOs’ balancing capacity demands are then forwarded to the TSO who operates the Common Procurement Optimization Function (CPOF). The CPOF determines the optimal procurement amounts for each LFC block by minimizing aFRR procurement costs while respecting additional constraints like e.g. minimum amounts of balancing capacity that need to be procured within an LFC block or limits regarding the maximum amount of balancing capacity that may be exchanged across a single border. The TSO operating the CPOF then sends the results to the TSOs of the cooperation who then perform the final procurement of balancing capacity and inform their respective BSPs about the procured volumes and prices.

Illustration of a future functioning of ALPACA
Illustration of a future functioning of ALPACA

Contacts

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