Starting tomorrow, October 9, 2024, Estonia will officially join the MARI (Manually Activated Reserves Initiative) platform, marking a major step in integrating into Europe’s electricity balancing market. Alongside Lithuania, Estonia is leading the Baltic region in this transition. This move is expected to strengthen grid stability, enhance the efficiency of balancing energy exchanges, and provide access to a larger pool of reserves for energy balancing.

 

What is MARI?

MARI implementation project (as of February 2024). Source ENTSO-E

MARI is a European platform developed to optimize the use of manual frequency restoration reserves (mFRR). By joining MARI, Estonia will be able to tap into a pan-European system where resources are shared across borders to maintain the balance between electricity supply and demand. The new system will allow for faster and more efficient responses to grid imbalances, with mFRR activation times dropping from 15 to 12.5 minutes.

 

 

Key Changes and Impact on Market Participants

 

Once fully operational, MARI will bring several key changes to how energy balancing is handled in the Baltic region:

  • 15-Minute Bidding Units on MARI: MARI will operate on 15-minute market time units (MTUs), allowing for more precise bidding and faster responses to imbalances.
  • Nord Pool Still on 60-Minute MTUs: However, Estonia’s Nord Pool day-ahead market will continue using 60-minute MTUs for the time being. This discrepancy in time units will persist until Nord Pool transitions to a 15-minute bidding system in the future.
  • Volatility to Increase with 15-Minute Nord Pool: Once Nord Pool moves to 15-minute MTUs, balancing market participants will experience more volatile price changes, creating greater opportunities but also requiring faster response times. Testing for the 15-minute system has already begun in some regions, but Estonia remains on the 60-minute system for now. Nord Pool is expected to switch by Q4 2024 or 2025, though the exact timeline remains flexible
  • Transition to Nodal-Based System: Estonia and its Baltic neighbors will eventually move to a nodal-based approach, where the balancing system is based on local nodes rather than a region-wide system. This will help optimize resource distribution even further, potentially leading to better efficiency in energy trading.
  • Market Flexibility: The introduction of 15-minute MTUs on MARI allows market participants to adjust their bids and energy schedules more frequently, offering greater flexibility. However, the Nord Pool’s current 60-minute MTUs will mean balancing market participants will face a less volatile pricing environment until the Nord Pool moves to the shorter intervals.

 

The Road Ahead for Estonia

 

While MARI’s full integration in Estonia begins tomorrow, the day-ahead Nord Pool market will still operate on 60-minute pricing units for now. Once Nord Pool switches to 15-minute pricing, balancing market participants in Estonia will experience more frequent price changes, adding volatility and new opportunities for those able to react quickly. For now, the slower transition will give companies time to adapt to MARI’s more dynamic system before they must navigate faster-moving day-ahead prices.

For energy market participants, Estonia’s entry into MARI signals a step towards greater efficiency, with enhanced access to a larger pool of European resources to stabilize the grid, optimize reserves, and ultimately reduce costs for consumers.