Elia Group Sa/nv · EURONEXT:ELI
Elia Group Sa/nv — Technical Presentation (March 2026)
35 slides from Elia Group Sa/nv's technical presentation, Mar 6, 2026
Slide 1: 2026 Incentive - Study on the optimal procurement of FRR capacity
2026 Incentive - Study on the optimal procurement of FRR capacity First workshop
Slide 2: Agenda
Agenda 1. Recall – Scope and objective of the study 2. Assessment of potential benefits of increasing the procurement of aFRR capacity beyond the dimensioned aFRR Needs 3. Preliminary assessment related to an evolution from Pay-as-Bid to Pay-as-Clear aFRR/mFRR capacity remuneration
Slide 3: 1. Context of the incentive
1. Context of the incentive • Objective: develop a long-term strategy for optimizing the procurement of aFRR and mFRR balancing capacity, considering both total system cost and control quality. • The study will build on the proposed recent evolutions to suggest possible further improvements. The stu
Slide 4: General disclaimer
General disclaimer • Scope of the study – This analysis aims at assessing, in a structural and forward-looking manner, whether and under which conditions increasing aFRR capacity beyond dynamic dimensioning can create value (activation cost reduction and/or improved control quality). • Not an event-
Slide 5: Study – part 1: assessment of the potential
Study – part 1: assessment of the potential a. Analysis of the potential to reduce balancing capacity reservation costs by (occasionally) procuring more upward aFRR capacity than the Analysis of procuring more minimum required, at the expense of upward mFRR capacity. aFRR up / less mFRR up b. Analys
Slide 6: Study – part 2: study on how to realize the potential
Study – part 2: study on how to realize the potential a. Comparison with purchasing strategies used in at least two other RFP blocks (for example, the Netherlands, France, Switzerland). Benchmark with other TSO b. Proposal and assessment of different possible strategies for procuring aFRR and mFRR b
Slide 7: Timeline of the incentive
Timeline of the incentive Final presentation Workshop / Pre- in WG BD&S WG Balancing Workshop 1 consultation (17/12) presentation Part 1 Part 2 Consultation Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • First Workshop on 2nd June for discussing the preliminary results of Part 1. • Second Worksho
Slide 8: Agenda
Agenda 1. Recall – Scope and objective of the study 2. Assessment of potential benefits of increasing the procurement of aFRR capacity beyond the dimensioned aFRR Needs 3. Preliminary assessment related to an evolution from Pay-as-Bid to Pay-as-Clear aFRR/mFRR capacity remuneration
Slide 9: Joint auction
Joint auction In 2025, an effort was undertaken to analyze the evolution of the capacity auctions. The design discussions related to the proposed auction evolutions on the short-term are considered finalized. The next step is the preparation of the T&C BSP aFRR amendments and their implementation. O
Slide 10: Recap – Proposed auction design evolutions
Recap – Proposed auction design evolutions (WG Balancing 2 April)
Slide 11: Placing the incentive in the balancing philosophy
Placing the incentive in the balancing philosophy • As described in the system balance philosophy, special attention is given to ensuring that participation in faster-responsive explicit balancing (aFRR) is better valued than slower-responsive explicit balancing as it provides more value to the syst
Slide 12: When can we see activation cost savings from procuring more aFRR capacity?
When can we see activation cost savings from procuring more aFRR capacity? There can be benefits* of increased aFRR capacity (beyond the dimensioned need) if: Condition 1: The increase in procured aFRR capacity leads Conversion Rate / availability of free bids to an increase of available aFRR energy
Slide 13: Procuring a higher volume of aFRR capacity does not necessarily lead to more aFRR energy bids
Procuring a higher volume of aFRR capacity does not necessarily lead to more aFRR energy bids • Elia observes already a substantial and increasing volume of non-contracted aFRR energy bids, in particular in aFRR down. Indeed, the average volume of non-contracted bids corresponds to 41% of the contra
Slide 14: Future increase of non-contracted balancing energy bids
Future increase of non-contracted balancing energy bids • Belgium is expected to have a significant capacity of (large-scale) batteries. • A battery can, in theory, provide up to 200% of its power capacity as FRR energy bids: • No injection / no offtake → 100% upward + 100% downward. • Full offtake
Slide 15: Absence of link between capacity and energy prices
Absence of link between capacity and energy prices • In the current market structure of balancing capacity, there is no link between balancing capacity and balancing energy prices. • As a result, the impact of procuring more than the dimensioned aFRR Capacity (and a lower mFRR Capacity) on the aFRR
Slide 16: The impact of PICASSO
The impact of PICASSO • The connection to PICASSO has allowed Belgium to access much larger Merit Order from neighboring countries. This has had an important impact on the activation prices of aFRR energy. • For aFRR, the volume of aFRR energy bids that can be accessed via PICASSO tend to be signifi
Slide 17: Availability of ATC in the balancing timeframe
Availability of ATC* in the balancing timeframe • In more than 75% of time (in upward direction) and more than 90%of time (in downward direction), Elia has access to minimally 300 MW of ATC to our neighboring countries*. • As a net importer, Belgium has more frequent available to ATC in export direc
Slide 18: Modelling of the economic benefits
Modelling of the economic benefits • As explained in the previous slides, it appears that the main potential for reducing the activation cost with additional procurement of aFRR is during the moments with no ATC and for the upwards direction. • In order to have an idea of potential benefits, a model
Slide 19: Modelling of the economic benefits - discussion
Modelling of the economic benefits - discussion • Based on these results, we can discuss if it is enough to justify an increase of the procurement of aFRR capacity. Several important factors must be considered: 1. It is unlikely that the conversion rate (from extra capacity to additional energy) wou
Slide 20: aFRR Merit Order after current procured level
aFRR Merit Order after current procured level • Procuring more aFRR capacity than the dimensioned volume will be done at a higher cost than the current procurement cost. • The impact of reducing the mFRR capacity cost is much more limited*. “Statistical” aFRR merit order from 0 to 160 MW, with corre
Slide 21: Summary of the key messages
Summary of the key messages • For the downward direction, • there are significant volumes of non-contracted aFRR Energy Bids in the majority of time*, making it much less likely that procuring more aFRR Down capacity will lead to additional downward aFRR Energy Bids. • In addition, Elia tends to hav
Slide 22: Belgian ACE is of good quality
Belgian ACE is of good quality Another potential reason to increase aFRR capacity is for improving control quality*. Control quality can be approximated by the quality of the ACE/FRCE. The requirements for Belgium are significantly lower than the observed ACE, and still well below pre-PICASSO levels
Slide 23: Most (local) saturations are resolved quickly
Most (local) saturations are resolved quickly • Local saturation periods are periods when the Belgian CBMP is reaching the maximal local price and remains at that level. • For last year (from 15 April 2025 to 31 March 2026), aFRR has saturated (in number of 4s points): • Slightly less than 1% of the
Slide 24: Agenda
Agenda 1. Recall – Scope and objective of the study 2. Assessment of potential benefits of increasing the procurement of aFRR capacity beyond the dimensioned aFRR Needs 3. Preliminary assessment related to an evolution from Pay-as-Bid to Pay-as-Clear aFRR/mFRR capacity remuneration
Slide 25: Why consider Pay-As-Cleared for FRR capacity?
From 2020 Why consider Pay-As-Cleared for FRR capacity? market study In 2020, Elia conducted a study on the possible evolution from pay-as-bid to pay-as-cleared remuneration of aFRR and mFRR capacity. The study highlighted the following arguments: • Theoretical argument: • Pay-as-Clear (PAC) incenti
Slide 26: Conclusion of the 2020 study
From 2020 Conclusion of the study market study • Study conclusion: • Pay-as-cleared is the desired long-term target for FRR capacity remuneration. • However, immediate implementation would likely raise capacity costs due to insufficient competition. • Recommended approach: • Implement PAC only once
Slide 27: From WG Balancing of 13 November 2025
From WG Balancing of 13 November 2025
Slide 28: Key elements on PAC
Key elements on PAC 1. Level playing field by reducing barriers to entry and improving the market attractiveness: Benefits • Removal of the need to forecast competitor’s bids. • BSPs benefit equally from higher capacity prices e.g., in moments of limited liquidity. 2. Improved economic efficiency: •
Slide 29: Recent evolution of the auction costs
Recent evolution of the auction costs • Even though the possible (short-term) increase in FRR capacity procurement cost might not be negligible, it should be noted that the FRR capacity procurement costs have recently declined significantly. • aFRR capacity costs have seen a large decrease starting
Slide 30: Evolution of the liquidity
Evolution of the liquidity • The liquidity (i.e. offered capacity volume) has improved, especially for aFRR up (single CCTUs) at the start of 2025.
Slide 31: Evaluation of the risk of increased procurement cost
Evaluation of the risk of increased procurement cost • In order to assess the increased procurement costs from the transition from PAB to PAC, Elia considered different scenarios: 1. Baseline scenario: no change in capacity bids (likely short-term scenario). 2. Improved market condition and surveill
Slide 32: Evaluation of the risk of increased procurement cost - mFRR
Evaluation of the risk of increased procurement cost - mFRR • For mFRR, the recent period has seen a much PAC – lower cost per day than previously. extreme bids PAC – no PAC – removed & • The move to PAC would increase the cost per day bidding extreme bids 15% from 67 to 95 k€. mFRR [k€/day] PAB cha
Slide 33: Evaluation of the risk of increased procurement cost - aFRR
Evaluation of the risk of increased procurement cost - aFRR PAC – PAC – extreme PAC – no extreme bids removed aFRR down bidding bids & 15% • For aFRR, the situation for down and up is quite [k€/day] PAB change removed reduction different. Jan-Jun 2025 25 51 37 31 • For down, the move to PAC would in
Slide 34: Risk of price spikes
Risk of price spikes An issue for moving from PAB to PAC is the risk of price spikes (one bid at a much higher price that propagates to all bids). This risk is especially present for aFRR down (see below the distribution of the ratio between marginal and average price). Few cases with marginal >> av
Slide 35: Next steps
Next steps Concerning the move to PAC, the following next steps are envisaged: • Follow-up some KPIs such as: • The relative capacity cost increase. • The total capacity cost increase. • The remaining margin (i.e., the difference between the volume offered and the volume to be minimally procured) af