Enhancing Renewable Energy Integration through Regional Cooperation

The main sources of FRR in CAREC countries are hydropower plants and gas-fired thermal power plants (balancing reserve suppliers, or BRS). By enabling frequency regulation reserve procurement across borders, the region could save $230 million annually by 2030 in FRR operation costs. This would reduce reliance on expensive thermal power plants, in Kazakhstan and Uzbekistan, and increase the use of cheaper hydropower plants, in the Kyrgyz Republic and Tajikistan.^[2]

Europe has advanced experience in this area, including a regional security coordinator like Coreso in Western Europe and advanced mechanisms for integrating automatic frequency restoration processes, such as IGCC (International Grid Control Cooperation) and PICASSO (the Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation).

A roadmap to establish a regional cooperation framework for frequency regulation reserve among the CAREC countries, drawing on Europe’s experience, would consist of four steps:

1. Planning the development of frequency regulation reserve facilities and interconnection transmission lines based on the region's long-term power development plans.
2. Multiple member countries agreeing on harmonized rules for frequency regulation reserve, including technical requirements, allocation methods, and settlement mechanisms.
3. Legalizing the procedures for cross-border frequency regulation reserve procurement within the participating countries, covering contracts, tariffs, and dispute resolution.
4. Endorsing the regional cooperation framework, which includes developing an operational handbook and establishing a regional security coordination center to facilitate the matching and settlement of frequency regulation reserve transactions among the participating system operators (SOs).

A customized trade model for cross-border FRR procurement for CAREC^[3] should account for the lack of established domestic balancing mechanisms in most participating countries.^[4] Under this model, each system operator will submit its frequency regulation reserve request and offer to the regional security coordination center beforehand (either a day or a week ahead). The center will conduct an auction to determine the procurement price and the allocation of FRR among system operators.^[5] The settlement will be implemented once the procured frequency regulation reserve is utilized on the day.

For the third step, the national legal framework must comply with the cross-border balancing procedure and multilaterally agreed technical rules, defining governance rules for validating new propositions or updating existing regional rules. Per the fourth step, the existing regional energy trading framework can be used to prepare a handbook for CAREC balancing operations, defining roles, responsibilities, operational procedures, and coordination mechanisms. The scope of the existing regional power system operator, CDC (Coordinating Dispatch Centre “Energy” of Central Asian Power System), can be expanded to include regional security coordination, monitoring, and ensuring the reliability and security of the regional power system.