District heating has systems are a central component of Sweden's energy system for primarily the supply of heat to residential buildings, but they also contribute with a supply of electric power to the national power system. Approximately 7070 GWh was produced in 2023, accounting for 4.3% of Sweden's total electricity generation. However, the sector faces significant in related t odifficulties in their business models for sustaining an economically sustainable operation combined heat and power plant due to decreasing electricity prices caused by increased shares of wind and solar power in the national power system, in combination with increasing prices on biomass. Therefore, CHP plants need to find new ways to ensure their long-term economic viability and sustainability. One potential strategy is to participate in the balancing market. This study analyses Gävle Energi's capabilities to participate in the manual Frequency Restoration Reserve downward (mFRR) market. The goal is to maximize the profitability of their combined heat and power CHP plant while ensuring an adequate heat supply.

The strategy for participating in mFRR involves optimizing the bypass function and the CHP plant direct condenser, intentionally decreasing electricity production to increase heat output. This adjustment enables Gävle Energi to respond flexibly to market signals while maintaining the reliability of the heat supply. The surplus heat is subsequently stored in an accumulator tank and discharged at strategically chosen times to further maximize efficiency and profitability. The strategy was implemented in Matlab, utilizing operational conditions from 2023, to enable participation in the mFRR market.

Through this approach, Gävle Energi has the potential to generate over 6 million SEK annually from the mFRR. This revenue represents approximately 1,58 % of the Gävle Energis total net revenue and results in a 21 % increase in profit. The additional revenue could be used to invest in infrastructure, improve efficiency, and optimizing participation in the mFRR-market. For successful participation in the mFRR-market, Gävle Energi must strategically adjust its price requirements and the volume of downward regulation it can offer.

The study has certain limitations, as it is based solely on conditions observed in 2023 and doesnot account for potential future developments. It is likely that the data obtained from Gävle Energi contains inaccuracies, as irregular patterns have been identified within the dataset. Furthermore, no practical tests have been conducted to verify the technical and operational feasibility of Gävle Energis participation in the mFRR-market.

Future research should prioritize investigating the implementation of alternative heat storage methods and assessing the potential for integration into additional ancillary services and electricity markets. It would be valuable to analyze the impact of increased heat deliveries on the district heating network.