Balancing energy helps offset short-term imbalances between electricity generation and consumption and stabilise grid frequency. Suitable generation assets, battery storage systems and controllable loads adjust their power accordingly. In Germany, transmission system operators (TSOs) organise the procurement and activation of the required balancing reserves.

Balancing Energy at a Glance

• Positive balancing energy means increased electricity feed-in or reduced consumption; negative balancing energy means reduced feed-in or increased consumption.
• The reserve types FCR, aFRR and mFRR differ in their activation method, response speed and delivery requirements.
• Market participation requires demonstrated technical suitability and reliably available flexibility.

How Does Balancing Energy Work?

Electricity generation and consumption must continuously remain balanced. If consumption exceeds generation, grid frequency falls; if generation exceeds consumption, it rises. FCR initially contains the frequency deviation. aFRR and mFRR help restore the nominal frequency of 50 Hz and balance the control area. Their responses can overlap; they are not strictly sequential switching stages.

Several related terms need to be distinguished: balancing reserves describe the resources available to support system balancing. Balancing capacity is the power reserved for this purpose, measured in megawatts (MW). Activated power is also measured in MW, while balancing energy is the energy actually delivered during activation, measured in megawatt-hours (MWh). The German term “Regelenergie” is frequently used more broadly as an umbrella term.

The direction depends on the change in power relative to scheduled operation. A simplified example: if a battery storage system reduces its charging power from a scheduled 1 MW to 0.6 MW as part of a balancing reserve activation, it delivers 0.4 MW of positive balancing power. It does not need to export electricity to the grid. If this deviation remains constant for 15 minutes, it provides 0.1 MWh of positive balancing energy. Reducing charging power solely for self-consumption optimisation or peak shaving does not constitute balancing reserve delivery.

Comparing Primary, Secondary and Manual Frequency Restoration Reserves

The three reserve types perform different functions in frequency control and control-area balancing. In Germany, FCR is also known as Primärregelleistung (PRL), aFRR as Sekundärregelleistung (SRL) and mFRR as Minutenreserveleistung (MRL).

Reserve type	Activation	Function
FCR – Frequency Containment Reserve, also known as primary control reserve	Responds locally to measured grid frequency deviations.	Contains frequency deviations as the fastest of the three reserve types.
aFRR – automatic Frequency Restoration Reserve, also known as secondary control reserve	Follows automatically transmitted power setpoints.	Helps restore grid frequency and balance the control area.
mFRR – manual Frequency Restoration Reserve, also known in Germany as minute reserve	Is requested when needed through electronic activation instructions.	Supports or replaces aFRR, making it available for further balancing needs.

“Manual” does not mean that equipment must be switched by hand on site.

Which Assets Can Provide Balancing Reserves?

Battery energy storage systems (BESS) can adjust their charging and discharging power rapidly. Their suitability depends not only on response capability but also on sufficient stored energy or available storage capacity.

Flexible commercial and industrial processes can temporarily increase or decrease electricity consumption, provided that production requirements and process limits allow it.

Controllable generation assets can adjust their electricity output. Increasing output requires spare generation capacity and an available primary energy source. An aggregator can combine multiple assets into a jointly controlled pool.

Market Participation, Remuneration and Limitations

In Germany, providers must demonstrate their technical and organisational suitability through prequalification. Depending on the reserve product, requirements cover response speed, metering, communication, availability and evidence of delivery. For a pool, the participating assets and their coordinated control must meet the applicable requirements.

FCR in Germany is remunerated through capacity availability; there is no separate payment for balancing energy. For aFRR and mFRR, separate markets exist for balancing capacity and balancing energy. Committed availability and actual energy activation are therefore treated separately for remuneration and settlement. The applicable rules differ by product and market.

Providing balancing reserves can generate additional revenue, but does not guarantee an economic benefit. For BESS, relevant costs include market participation fees, energy losses and battery degradation. State of charge, power limits and grid connection capacity must also support the committed delivery.

Flexibility committed to balancing reserves is not simultaneously available without restrictions for electricity trading or peak shaving. Operational planning must therefore retain sufficient power and energy reserves and coordinate competing applications.

How Does EcoPhi Support Technical Integration?

With suitable project integration, EcoPhi can collect operational data, implement external power setpoints locally and report the asset’s response to the connected market partner. This integration is particularly relevant to implementing external activation instructions for aFRR and mFRR. For BESS, important operational data includes actual power, state of charge and available charging and discharging power.

FCR is activated in response to locally measured grid frequency.

EcoPhi’s role in this process depends on the control architecture of the specific project.

Implementation depends on device interfaces, the balancing reserve product and the provider’s requirements. Response times, data quality and evidence of delivery must be assessed across the entire control chain; additional integration work may be necessary. An EMS connection does not replace prequalification or the balancing service provider and its market participation and settlement responsibilities.

Balancing Energy in Summary

Balancing energy uses controllable power to keep the electricity system in balance. For asset operators, it offers an additional potential use of their flexibility. Essential requirements include demonstrated suitability, reliable delivery and operational planning that accounts for other applications.

Frequently Asked Questions About Balancing Energy

Is Imbalance Settlement the Same as Balancing Energy?

No. Imbalance settlement is the accounting and financial settlement of deviations in a balance responsible party’s energy position. The German term “Ausgleichsenergie” refers to this mechanism; it is not an additional balancing reserve product.

Are Positive and Negative Balancing Reserves Offered Together?

In Germany, FCR is procured as a symmetrical product: the provider must be able to deliver in both directions. Positive and negative aFRR and mFRR are offered separately. These product requirements should be distinguished from how responsibilities are allocated between individual assets within a pool.

What Happens If Committed Balancing Capacity Is Unavailable?

Incomplete delivery can have financial consequences. For aFRR, for example, capacity payments may be reduced and additional charges may apply if delivery obligations are breached.