Saudefaldene: Unlocking the Value of Flexible Assets in the Balancing Market

Norwegian TSO Statnett has announced a transition to automated trading of the power market’s tertiary reserves. Today, participation is based on hourly deadlines, but in the spring of 2023, a 15-minute response time will be introduced for power producers that offer this balancing service to the system operator.

In the first 9 months of 2022, Statnett's total reserve market payments added up to more than 1600 million NOK, making the reserve markets increasingly important for companies able to offer flexible hydropower generation, like Saudefaldene.

The need for digitalisation

For years, Saudefaldene has participated in the reserve market over the phone. With the introduction of 15-minute intervals, this is no longer possible.

According to Heidi Slettedal, Production Manager at Saudefaldene, an automated digital platform is required for continued trading in the reserve market. Such a platform – Ancitra – is provided by Volue.

"Volue has a good track-record for developing and implementing IT solutions for all power reserve markets. With the help of the Volue Ancitra software, we will be ready to trade in compliance with Statnett's new protocol," says Slettedal.

Unlocking the value of flexible assets

Saudefaldene operates seven power plants, in addition to 14 dams and transmission facilities. The annual production is 1,850 GWh, corresponding to 1.5 percent of the total Norwegian power production. Balancing services have been handled manually from the control center, but with the help of Volue's Ancitra software, this operation is now automated.

"The new Statnett model for trading in the reserve and balancing markets, will be based on algorithms that calculate the need for balancing the transmission net and automatically build and send activations to the power producers, based on their bids. Acceptance of bids and activation is automated. The Volue Ancitra software ensures that Saudefaldene can build and send valid bids to Statnett as well as receive and respond to activations by increasing or decreasing its power production within the new short deadlines," explains Nils Olav Tangvik, Sales Manager at Volue.

By implementing Ancitra, Saudefaldene can keep up with the development and utilise the reserve market more profitably than today, by creating bids that are better adapted to its own hydropower system.

Cloud-based access

Saudefaldene has chosen a Software-as-a-Service model, which means that Ancitra is made available as a cloud-based service. Instead of buying the software and installing it on their own servers, Saudefaldene rents access to Ancitra. Service and system maintenance is provided by Volue.

"A cloud-based solution is well-suited for companies that don't want to operate IT solutions in-house. You also avoid the one-off investment in the software as you are charged a monthly cost, instead of buying licenses up front. In addition, a SaaS solution is generally faster to implement, meaning that the customer can be up and running as fast as within 2-3 weeks”, says Tangvik.