Assessing the Membership of Portugal and Spain in the FCR Cooperation: TSO Costs and VPP Revenues

The Transmission System Operators (TSOs) from Portugal and Spain do not procure Frequency Containment Reserve (FCR) through market mechanisms. A Virtual Power Plant (VPP) aggregating sources such as wind and solar power and hydrogen electrolysers (HEs) would benefit from participation in this ancillary service market. The methodology proposed in this paper allows to quantify the costs of the participation of the Iberian TSOs in the FCR Cooperation as well as the revenues of a VPP that aggregates wind and solar power and HEs. Results are produced using real data from past market sessions. The Portuguese TSO would have paid roughly 10 M€ to participate in this market in 2022. Using data for the same country and year, a VPP (aggregating the HEs expected to be connected by 2025) would have revenues over 2 M€.