TenneT published its Annual Market Update 2025 at the end of April, and one line illustrates well the state of Dutch passive imbalance trading: the share of quarter-hours settled under Regeltoestand 2Regeltoestand 2 is what happens when the imbalance flips sign inside the same fifteen-minute settlement period.

TenneT has to ramp both up and down within that one window, and settles two separate prices for it instead of one, one you don’t know until after the window has closed. rose from 17% of hours in 2024 to 27% in 2025.

TenneT names two causes for the rise: faster-reacting assets (solar, wind, batteries) all chasing the same price signal, and tighter coupling with PICASSO,PICASSO stands for Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation. It lets TenneT and other European grid operators exchange aFRR volumes across borders every four seconds, instead of each balancing its own area alone. the European platform that shares balancing energy across borders.

This dual pricing can affect the profits expected from passive imbalance trading. One solution is to turn towards the active balancing markets, such as aFRR, which are becoming more financially attractive.

Some numbers first. We ran an aFRR simulation using ACC’s modeling tool, based on ENTSO-E market data between July 2025 and June 2026, on a 1 MWp reference solar asset. Compared with imbalance trading, it found:

• up to 69% more simulated profit from curtailed volume
• a 2.5x higher price per curtailed MWh
• 34% less green power curtailed, which keeps more SDE++-subsidized production on the meter

These are simulated results, on one reference asset, over one twelve-month window; they are not a forecast for your site. But they reflect the direction the market is moving towards: less profitable imbalance, more profitable aFRR.

What aFRR actually does

European grids run at 50 Hz.In the ENTSO‑E (European) synchronous area, normal operation aims to keep deviations within about ±0.5% of 50 Hz (i.e., roughly 49.5–50.5 Hz). When production and consumption are not in balance, the frequency moves with them, which threaten system stability and can trigger protective actions, equipment stress, and in extreme cases, cascading blackouts. In order to keep our lights on, TenneT relies on three reserves which respond in sequence.

1. FCR (Frequency Containment Reserve) reacts within seconds across the whole synchronous area to stop the frequency falling further. It stabilizes temporarily, but it doesn’t correct.

2. aFRR (automatic Frequency Restoration Reserve) does the correcting. It pulls the frequency back to 50 Hz and returns the control area’s balance, releasing the shared FCR reserve for the next event.

3. mFRR (manual Frequency Restoration Reserve) handles what’s left, activated by hand for larger or longer deviations.

As its name indicates, aFRR is “automatic.” TenneT’s control system calculates the imbalance in its control area and sends a delta-setpoint (how much extra power to add or remove) to every contracted asset through its Balancing Service Provider,A Balancing Service Provider, or BSP, is the party contracted directly with TenneT. Individual assets take part through a BSP’s pool rather than bidding alone, which is also why aggregation across many smaller sites works even though the market’s minimum bid sizes run into the megawatts. TenneT calls the instruction itself a delta-setpoint. as often as every four seconds. Your asset receives that delta and follows it, with a visible reaction expected within 30 seconds.

Two products, two ways to get paid

aFRR has two separate revenue lines. They’re bid differently, paid differently, and carry different obligations.

• Capacity bids: selling availability. You offer (via your BSP) available power in MW, upward and/or downward, in TenneT’s day-ahead auction.The auction runs through TenneT’s Auction Platform for Ancillary Services (APFAS), with bidding for the following day closing at 9:00. Pricing is pay-as-bid,Pay-as-bid means you receive exactly the price you offered, unlike energy bids (below), where the price is shared across everyone activated that quarter-hour. whether or not TenneT ever activates you. In exchange, you must stay available for the entire contracted period. Selling capacity you can’t actually deliver is the fastest way to lose both the revenue and the prequalification behind it.
• Energy bids: selling delivered MWh. You offer a price per MWh for upward and/or downward activation, priced and settled per quarter-hour, with bids adjustable up to 25 minutes before each period starts. TenneT activates in real time based on system need, and you’re paid only for what you actually deliver. Pricing is pay-as-cleared:The price paid is the highest (for upward) or lowest (for downward) price among all the bids TenneT activates in that quarter-hour, regardless of what any individual party asked for. If that energy bid fulfills a capacity contract, the commitment itself can now run in four-hour blocks rather than covering the full trading day, a change TenneT introduced through 2025 to make it easier for smaller and more weather-dependent portfolios to commit. everyone activated in the same quarter-hour receives the same marginal price, which can sit above your own offer.

The two combine. Capacity income is predictable but obliges you to hold headroom you may never be asked to use. Energy income is variable, and you only give up production when the system actually calls for it. Which mix suits your asset depends on your production profile, your subsidy position, and what your balancing partner can place in the market.

How the Teleport unlocks aFRR services

Whatever TenneT asks for, the Teleport’s job stays the same: take the adjustment your trading partner requests, and apply it to the right asset in a way that respects everything else already happening on site.

For solar and wind, that adjustmentPrecisely: the target output equals the lower of what the asset could currently produce and any active curtailment limit, plus the amount TenneT is asking for. TenneT calls that amount a delta-setpoint.

Our API command for applying it is ApplyAfrrDeltaSetpoint and calculates: setpoint = min(available power, active curtailment limit) + delta. applies on top of what the asset could currently be producing given today’s weather, or, if the site is already being curtailed for another reason (a grid limit, a congestion signal), on top of whichever limit is more restrictive. The Teleport works out locally which limit currently applies, so a curtailment instruction and an aFRR request can run at the same time without conflicting.

For a battery, the adjustment is measured against whatever the battery was already told to do, rather than against the weather. And if one Teleport is steering both a battery and solar or wind on the same site, the solar or wind moves first to meet the request; the battery only steps in if they can’t cover it on their own, since curtailing solar or wind is normally cheaper than cycling a battery.

For the piece TenneT actually checks, what your asset would have done without the requestTenneT calls this the reference signal, and sets two hard rules for it: it must be built the same way whether or not aFRR is active, and it can never move in the opposite direction from the request itself.

For solar, building it needs a real irradiance sensor, since no standard inverter reports available power directly. we also offer an optional control strategy, the aFRR limiter, that builds this automatically: from one or more irradiance sensors for solar, or read straight from the turbine for wind. It isn’t mandatory; a BSP can build this themselves from the raw sensor and trading data we already send.

On the reporting side, the Teleport can report as often as once a second, with control commands responding in a fraction of that, all keeping pace with TenneT’s requirements.

How to get started?

If you already have a Teleport installed: start with your trader or aggregator and ask whether aFRR is in scope of your current contract, which products they bid, and what the revenue split looks like. Then email support@withthegrid.com so we can configure the aFRR limiter, and irradiance sensors if solar is involved, on your device.

If you don’t: contact our team and tell us more about your project. We confirm compatibility, ship a preconfigured device, and support your installer remotely through the Site Acceptance Test.

Either way, the prequalification test runs through your balancing partner, and the site needs to be measuring properly before it starts.

Frequently asked questions about aFRR in the Netherlands

Can my existing optimizer / energy trader trade for me on the aFRR market?

You can check whether your optimizer is recognized by TenneT as a Balancing Service Provider (BSP) for aFRR on the BSP register (search by name/EAN code, and look if there are checkmarks for “aFRR capaciteit” and/or “aFRR energie”).

If it is not listed, reach out to them to ask for a timeline for pre-qualification and BSP recognition.

What do "upward" and "downward" mean for solar, wind, and batteries?

Upward aFRR means providing more injection (or less withdrawal) to the grid, and downward aFRR means providing less injection (or more withdrawal). Here’s how it works, per asset type:

Batteries (BESS)

• Upward aFRR: discharge more (or charge less) than your baseline schedule → extra injection.
• Downward aFRR: charge more (or discharge less) than your baseline schedule → extra withdrawal.

A battery does not need to curtail production in advance to offer aFRR, but it does need to reserve part of its state‑of‑charge and power capability for aFRR capacity blocks. This reservation has an opportunity cost: that SoC and power cannot be used for arbitrage or other services, and must be priced into your optimisation.

Solar (PV) and wind

• Downward aFRR is the “natural direction”: you offer curtailment relative to what the weather would otherwise allow. This does not require extra fuel, but it does mean giving up MWh and any associated SDE++ subsidy revenue.
• Upward aFRR is only possible if the asset is deliberately held back below its weather‑available potential, creating headroom. That headroom has a real cost: the expected aFRR capacity payment (and activation revenues) must exceed the forgone energy value and SDE++ subsidy on the withheld MWh, plus any additional operational costs.

In the Netherlands, downward aFRR for PV and wind is often more economically attractive than upward aFRR, because it does not require maintaining headroom.

What does TenneT require before an asset can bid?

Three things. Your asset has to prove it can react fast and accurately enough.In practice: during prequalification, TenneT checks that the portfolio can start responding quickly and then reach the full activated volume within the required time. The European framework sets a full activation time (FAT) of 5 minutes for standard aFRR products, and national rules require that the response starts within about 30 seconds of the activation signal and then ramps to the full setpoint within the FAT. Steady‑state accuracy requirements are typically on the order of ±10% of the aFRR capacity (or a minimum MW threshold).

TenneT monitors delivery on the basis of real‑time telemetry; persistent non‑compliance can lead to restrictions or loss of prequalification status for the BSP’s portfolio. It needs a reference signal TenneT trusts, showing what the asset would have done without the aFRR request. And it needs a telemetric or smart-meter connection.

Does power curtailed for aFRR still cost you SDE++ subsidy, the way imbalance curtailment does?

Yes. SDE++ pays per delivered MWh, so any MWh you don’t produce goes unsubsidized regardless of why you curtailed it. What changes with aFRR isn’t that rule, but the volume of curtailed energy: the simulation cited earlier curtailed 34% less energy over the year than the same asset trading on imbalance, which is why keeping more subsidized production on the meter shows up as a real secondary benefit.

Is this specific to the Netherlands, or does aFRR work the same everywhere in Europe?

The mechanism is common across the continent. ENTSO-E harmonization means aFRR plays the same role, restoring a control area’s balance after FCR has stabilised the frequency, using automatic activation of balancing energy bids.

What differs by country is the contracting TSO, and the exact tolerances, bid sizes, activation schemes (merit order vs pro‑rata), settlement rules, and some technical response requirements (e.g. precise ramp rates, monitoring intervals, and prequalification test details).

Everything above reflects TenneT’s rules for the Dutch market specifically, so if you’re evaluating a site elsewhere in Europe, treat this as how aFRR works in general and confirm the local specifics with your own TSO or aggregator.