The paper presents practical research based on a real-life case study of the Baltic power system for optimal activation of manual frequency restoration reserves. A software tool for the determination of the activation volume and time schedule is developed to facilitate the decision-making process of the transmission system operator in balancing of the power system within a coordinated balancing area. The study is important in light of the ongoing integration of balancing markets within the European Union and the subsequent need to develop an activation optimization function. Recently, regular balancing needs of the Baltic countries were covered by the neighboring Russian power system. The motivation for this study was moving towards local regulation as much as possible for energy dependence related and economic reasons. Moreover, development of the activation optimization function has served as one of the first steps towards creating a fully automated balancing system.