8th International Conference on Smart Energy Systems and Technologies - SEST 2026, Ciudad Real (Spain). 02-04 September 2026
Summary:
The Spanish Secondary Regulation Service (SRS), launched in 2024, introduced a new settlement mechanism for automatic Frequency Restoration Reserve (aFRR) that significantly impacts the remuneration and compliance obligations of Balancing Service Providers (BSPs). This paper provides a comprehensive analysis of the SRS settlement model, detailing the calculation of marginal prices, accepted aFRR energy, and associated penalties for non-compliance. An illustrative example demonstrates the practical application of these concepts, highlighting discrepancies between delivered and accepted energy and their economic implications for BSPs. The results demonstrate that accurate bidding strategies and real-time monitoring are essential to maximize revenues and avoid penalties. Furthermore, the proposed framework is generalizable to any system operator implementing reserve markets, supporting harmonization efforts such as those promoted by the PICASSO project.
Spanish layman's summary:
Este artículo analiza el modelo de liquidación del nuevo Servicio de Regulación Secundaria español, introducido en 2024. Mediante un caso de estudio, examina la remuneración de la energía, los precios marginales y las penalizaciones, destacando la importancia de ofertas precisas y del cumplimiento operativo de los BSPs.
English layman's summary:
This paper analyzes the settlement framework of the Spanish Secondary Regulation Service introduced in 2024. An illustrative case study examines energy remuneration, marginal pricing, and penalties, highlighting the importance of accurate bidding and compliance for BSP profitability.
Keywords: Balancing Service Provider, Frequency Restoration Reserves, Penalties, Secondary Reserve Service, Settlement.
Publication date: 02-Sep-2026.
Citation:
A. Baringo, I. Egido, L. Rouco, "Settlement Design for Secondary Regulation Service: A Case Study of the Spanish aFRR Market", presented at 8th International Conference on Smart Energy Systems and Technologies - SEST 2026, Ciudad Real, Spain, 02-04 September 2026
IIT-26-204C
