Impact of Market Reforms on Deterministic Frequency Deviations in the European Power Grid

TL;DR

The paper investigates how a 2025 market reform, which shifts day-ahead trading from hourly to quarter-hourly blocks, affects deterministic frequency deviations (DFDs) in the Central European grid. It uses a multi-method approach—power spectral density via Welch, daily frequency profiles, stability indicators (Nadir, MSD, Integral, RoCoF), PCA of hourly patterns, and Fourier-based functional data analysis—to compare pre- and post-reform data from public frequency measurements. The main findings show substantial reductions in hourly- and half-hourly DFDs and associated spectral components, with increased prominence of quarter-hourly structures; large deviations fall overall, but some extreme events and time-specific spikes persist due to non-market factors. These results demonstrate that market design reforms can meaningfully improve frequency quality in low-inertia systems, while also underscoring the need for accompanying technical and regulatory measures to suppress residual large excursions and improve robust operation across the CE synchronous area.

Abstract

Deterministic frequency deviations (DFDs) are systematic and predictable excursions of grid frequency that arise from synchronized generation ramps induced by electricity market scheduling. In this paper, we analyze the impact of the European day-ahead market reform of 1 October 2025, which replaced hourly trading blocks with quarter-hourly blocks, on DFDs in the Central European synchronous area. Using publicly available frequency measurements, we compare periods before and after the reform based on daily frequency profiles, indicators characterizing frequency deviations, principal component analysis, Fourier-based functional data analysis, and power spectral density analysis. We show that the reform substantially reduces characteristic hourly frequency deviations and suppresses dominant spectral components at hourly and half-hourly time scales, while quarter-hourly structures gain relative importance. While the likelihood of large frequency deviations decreases overall, reductions for extreme events are less clear and depend on the metric used. Our results demonstrate that market design reforms can effectively mitigate systematic frequency deviations, but also highlight that complementary technical and regulatory measures are required to further reduce large frequency excursions in low-inertia power systems.

Figures (7)

• Figure 1: Emergence of hourly deterministic frequency deviations (DFDs) due to electricity trading. Upper panel: The daily profile of the grid frequency in the Continental European synchronous area shows characteristic peaks at the beginning of every hour. Lower panel: These DFDs can be understood from the design of European electricity markets. Load evolves continuously, while generation is traded in blocks. At the beginning of each block, generation is adjusted in an approximately stepwise manner, leading to a power imbalance $\Delta P$ and thus to DFDs. Until 1 October 2025, electricity was mainly traded in hourly blocks, resulting in pronounced hourly DFDs. The figure shows the daily profile of the load as a continuous curve, while generation is depicted as a step function for illustrative purposes. The illustration uses data from 2019.
• Figure 2: Power spectral density $S(1/T)$ of the grid frequency time series before (orange) and after (green) the market reform. We plot $S$ versus $1/T$, where $T$ denotes the period. The characteristic peaks corresponding to oscillations with hourly and half-hourly periods appear to be suppressed after the market change in 2025.
• Figure 3: Analysis of the impact of the market reform on the global statistical properties of the grid frequency. (a,b) Daily profiles of the grid frequency $f(t)$ before (orange ) and after (green) the market reform on 1 October 2025 (see Sec. \ref{['sec:method-daily-profile']} for details). Large deterministic frequency deviations are substantially reduced after the market reform. (c) Histogram of the frequency deviation $\tilde{f}(t) = f(t) - f_{\rm ref}$ before (orange) and after (green) the market reform. The likelihood of frequency deviations exceeding $5\,mHz$ is strongly reduced.
• Figure 4: Long-term trends of frequency deviations. Upper panel: Evolution of selected quantiles of the frequency distribution during the months October--December from 2015 to 2025. Lower panel: Total duration of periods with large frequency deviations $|\tilde{f}(t)| \ge 75\,mHz$. We provide data for the months October--December as well as July--September for comparison. The grey shading indicates that data publication changed in June 2022 (see. Sec. \ref{['sec:data_source']}).
• Figure 5: Distributions of stability indicators before and after the market reform on 1 October 2025. The probability density $P(x)$ of the different stability indicators and the cumulative distribution function can be found in the top row and bottom row, respectively. The definition of the indicators is summarized in Sec. \ref{['sec:methods-indicators']}.