Analysis of pro-rata versus a merit order aFRR activation approach for the Italian power system

The European electricity market rules and network code require Transmission System Operators (TSOs) to share resources for the automatic Frequency Restoration Reserve (aFRR) service and to adopt economic merit order (mo) criteria in service procurement and activation. However, as to activation, several TSOs, including the Italian one, traditionally adopt pro-rata (pr) logics, ensuring high-quality frequency regulation. In this work, the mo and pr mechanisms are compared, from a technical and an economic point of view, for the part of the Italian power system synchronous with the Continental European (CE) system and labelled as CNC. In more detail, the dynamic behaviour of CNC is simulated by means of a single-busbar model including the dynamics of the individual power plants providing primary and secondary frequency regulation; the rest of the CE system is modelled as a single equivalent regulating power plant. A mo mechanism similar to that adopted by the German TSOs is considered. In the simulation of a large step imbalance in CNC, the frequency transients obtained with the two mechanisms are rather similar. As to economic assessments, 2022 historical data about the automatic generation control signal and the energy quantities and prices accepted on the Italian Balancing Market for pr secondary regulation are adopted. In 2022, the mo mechanism analysed would have led, compared to the pr one, to a saving around 8.7% for the TSO in operating CNC.