Associates Area
In Portugal, System Services markets are currently one of the main topics of discussion. Not because they are new, but because, recently, non-dispatchable renewable technologies* have begun to enter these markets, transforming an intermittent resource into a mechanism of flexibility for the electrical system.
*It is important to emphasize that, when we talk about renewables in this context, we are referring specifically to solar photovoltaic and wind energy, since hydropower, being controllable, has long been involved in these services.
In recent years, in Spain, renewables have come to occupy a significant share of these markets. Between May and September 2024, the average power attributed to solar photovoltaic energy in the secondary regulation reserve varied between 21% and 24%; in May, 60% of the average power attributed to the service was allocated to renewable technologies and, of the mFRR energy activated to decrease throughout the month, 78% was from renewable sources. In Spain, renewables are already a relevant active resource in these services, and the additional revenues obtained in ancillary markets are already considered in renewable financing models and in the structuring of PPAs.
In Portugal, on the other hand, the entry of non-dispatchable renewables into System Services is a more recent phenomenon. In December 2023, the Portuguese system operator (REN) organized the first workshop on “Participation of Renewable Energy Sources in the System Services Market”, with the aim of informing producers about the opportunities available in these ancillary markets and the benefits that could be obtained. Despite REN's initiative, in practice, it was still not entirely feasible (or at least easy) for these renewable assets to participate in system services. However, since then, there have been many regulatory changes and new proposals by ERSE (the regulatory body) and REN itself, adapting both the markets and the system requirements to the particularities of renewables, allowing their participation in these services. There is no doubt that the energy transition involves a new paradigm in all aspects. The massive integration of renewables into energy systems represents a major challenge to maintain their balance, in addition to creating new market scenarios that generate uncertainty, such as zero or negative prices. When, in 2024, negative prices appeared for the first time in the MIBEL daily market, questions arose about the economic viability of a technology whose tendency was to reduce prices, directly affecting the profitability of producers.
However, the intermittency of renewable resources increases the operator's need for System Services, i.e., the more renewables, the more activation of balancing energies. Today, we talk less about the percentage of renewable generation and more about the percentage of curtailment of these technologies, since the problem is no longer the lack of renewables in the energy mix, but rather the capacity of these sources to generate energy in a distributed manner, without congesting network nodes or generating major imbalances in the system. To this end, adjustment services are essential. Thus, in the face of low prices in the daily or intraday market, much more attractive values are observed in the System Services markets. This inverse correlation opens up new possibilities for producers within this new market paradigm. Until recently, the Portuguese operator maintained the balance of the system through large manageable plants and direct communications. Now, the challenge is for regulation to also be carried out through delegated Control Centers, aggregating several facilities of different technologies and sizes, in a distributed manner.
In February 2025, REN organized the second workshop on “System Services Markets and the Challenges of Integrating Renewable Generation”. At this point, renewables are already participating in System Services markets in Portugal and, although there is still much to be done, this possibility is already within reach of any producer. Now, the challenge for those of us who are already actively participating in these services is to help other producers understand how they can enter these markets and what the advantages of doing so are, which is the main objective of this second meeting.
Due to the Aggregator, small and medium-sized producers can now also consider participating in these markets through a delegated Control Center, thus avoiding high investments in systems and telecommunications required for direct participation in these services. It is important to remember that, in addition to being economically attractive markets, System Services require real-time response, direct communications with the system operator and a high capacity to react to any disruption. A delegated Control Center can guarantee this operation for any producer within its portfolio, making these opportunities accessible to everyone.
In short, there is no doubt that renewables are indispensable for the energy transition, but their integration also presents new challenges for energy markets and systems. The real value now lies in transforming renewables into a flexible asset, capable of contributing to the balance of the system and generating revenue in all available markets.