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Glossary · Energy industry & energy transition

Ancillary Services

Ancillary services ancillary services balancing energy frequency maintenance voltage control grid operation security of supply

Ancillary Services

Ancillary services are services that support the secure operation of transmission and distribution networks. In German, the term is usually rendered as system services. They include, in particular, balancing short-term power imbalances, voltage control and capabilities for grid restoration. They complement the supply of electrical energy but are not necessarily energy-free: when balancing reserve is activated, for example, electrical energy may be fed in or additionally consumed.

The boundary of the term depends on context. Article 2, point 48 of the EU Electricity Market Directive 2019/944 expressly excludes congestion management from ancillary services. Broader technical accounts, by contrast, also treat system operation, grid protection and congestion management as system services. Anyone comparing costs, markets or statutory obligations must therefore check which delimitation is used. The market examples below refer to Germany, as of 11 November 2026.

Distinction from energy trading and balancing reserve

Energy trading mainly involves trading electrical energy, for example in megawatt hours (MWh). System services, by contrast, also concern reserved capacity, responsiveness, availability or particular technical properties. These quantities answer different questions: How much energy is delivered? How much can a plant change its feed-in? How quickly does it respond? And how long can it sustain the response?

A simplified calculation illustrates the difference: if an additional 4 megawatts (MW) are fed in for a quarter of an hour, this amounts to 1 MWh of electrical energy. If 4 MW are merely held available as reserve, no particular quantity of energy has yet been delivered. Holding capacity in reserve initially creates an option that can be called upon. Accordingly, remuneration may relate to capacity availability, to actual activation, or to both; the specific rule depends on the product.

Ancillary services must not be equated with balancing reserve. The latter serves the short-term balancing of feed-in and withdrawal. Here, balancing capacity (Regelleistung) refers to the capacity held available, and balancing energy in the narrow sense (Regelarbeit) to the electrical energy exchanged upon activation; "balancing energy" (Regelenergie) is often used as an umbrella term. Voltage control, inertia and black-start capability fulfil other tasks and are not mere subtypes of the usual balancing reserve products.

Frequency containment and frequency restoration

The grid frequency indicates the active power balance in the synchronously interconnected alternating current system. In the Continental European synchronous area, the nominal value is 50 hertz (Hz). If withdrawal exceeds feed-in, the frequency initially falls; in the opposite case it rises. Withdrawals also include grid losses. A balanced annual energy balance is therefore not sufficient: what matters is the ongoing power balance.

Frequency Containment Reserve (FCR) responds in a decentralised and automatic manner to the measured frequency deviation and limits it. Automatic Frequency Restoration Reserve (aFRR) is activated by the control systems of the transmission system operators. It restores the balance in the respective control area or control block and relieves the FCR. Manual Frequency Restoration Reserve (mFRR) provides support where further balancing is needed. "Manual" does not mean that all technical activation steps are carried out by hand.

The reserves are not emergency stages switched on strictly one after another; their effects may overlap in time. Positive reserve means more feed-in or less consumption, negative reserve means less feed-in or more consumption. An industrial plant can thus make a comparable balancing contribution by reducing load as additional feed-in would, provided it meets the product requirements.

Voltage control is more location-dependent

The voltage must remain within permissible ranges at the individual grid nodes. Reactive power, expressed in var or megavar (Mvar), serves this purpose among other means. It is associated with the periodic build-up and decay of electric and magnetic fields and, on average over time, delivers no usable active energy. Nevertheless, the associated current loads equipment and can cause additional losses.

Reactive power influences the voltage level and must be available where and when needed, at a suitable location. A source at a distant grid point cannot readily solve a local voltage problem. The frequency across the interconnected system can therefore appear unremarkable while voltage limits are already being violated in a sub-network. Besides generators and converters, special grid equipment such as capacitor banks or reactors also serves voltage control.

Inertia, grid stability and black start

Inertia (instantaneous reserve) acts immediately after a disturbance and limits how quickly the frequency changes. Directly coupled synchronous machines provide it through their rotating masses. Grid-forming converters can technically replicate a corresponding inherent response. This capability must be distinguished from FCR: a fast, controlled change in power alone does not prove grid-forming capability.

Wind and solar plants are often connected via power electronics and therefore do not automatically have the same properties as directly coupled synchronous generators. Grid-forming functions require suitable controls, appropriate plant design and an energy source or energy store for the active power response. Short-circuit current, protection concepts and the interaction of several controllers must also be taken into account. Technical suitability can therefore not be derived solely from the label of a generation technology.

Black-start capability means that a plant can start without an external power supply and contribute to the restoration of a failed grid. It does not replace a complete grid restoration plan. Suitable switching sequences, communication facilities, manageable load connections and coordination among grid operators are also required. An ordinary emergency generator is therefore not automatically suitable as a black-start plant for the public grid.

Procurement and remuneration in Germany

Not every system service is a freely tradable standard product. A distinction must be made between technical connection obligations, services from grid operators' own equipment, and contributions from third parties procured separately. The unbundling of grid operation, generation and trading makes transparent responsibilities and procurement rules particularly important. However, this implies neither that every technical contribution is paid for separately nor that all services are organised through the same market.

Participation in balancing reserve markets requires prequalification. What is examined is not only individual plants but also metering, communication and the organisation of a plant pool. In principle, different technologies and flexible consumers are eligible. What matters is proof of the required properties, not membership of a particular power plant class.

The earlier assessment that non-frequency ancillary services are predominantly organised outside market-based procedures is, for Germany, no longer adequate. TransnetBW documents regional procurement procedures for reactive power and black-start capability. For reactive power, only bids that exceed the applicable mandatory technical level are considered there. Since 22 January 2026, the German transmission system operators have also procured inertia (instantaneous reserve) on a market basis through a fixed-price system. Market-based therefore does not necessarily mean an auction.

These examples do not establish a uniform obligation or remuneration for all plants and voltage levels. What is decisive in each case is the procurement region, connection conditions, plant capabilities, regulatory exemptions and contractual requirements. The legal category "non-frequency" also needs explanation: under the EU definition it includes, among other things, inertia for local grid stability, even though physically this influences the course of the frequency.

Use conflicts and significance for security of supply

A battery storage system can combine energy trading and system services, but not unlimitedly at the same time. As a simplified example: if a storage unit with a maximum discharge capacity of 10 MW is already feeding in 8 MW, then without further measures only 2 MW of additional discharge capacity remain. For longer-lasting activations, sufficient energy must also be available. Conversely, a full storage unit has hardly any room for additional absorption. The reserve that can actually be offered therefore depends on the operating point.

Several revenue streams can complement one another, but the same committed capacity must not be marketed twice. For flexible consumers, production limits, temperature ranges or delivery deadlines to be met take the place of the state of charge, for example. New electrical loads such as heat pumps, electric vehicles and electrolysers are therefore not reliably available service providers merely because of their connected capacity.

It follows from the differing requirements that system services are neither a side issue nor permanently tied to conventional power plants. Equally, new requirements cannot be met solely through better remuneration. What is needed are actually suitable plants, proof of capability and coordinated modes of operation. An assessment of security of supply must therefore consider frequency, voltage, stability and restoration capability in addition to sufficient energy and capacity.

Sources

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Edited by eCMS on 11.11.2026 13:50

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