Index Review

Index: Monthly Review

Index · July 9, 2025 · 10-minute read

March 2025

For several months now, reference batteries have been primarily focused on the aFRR, despite the well-known “duck curve.” The secondary market dominates the other markets.

The decline in aFRR capacity revenues is offset by aFRR energy revenues, thereby stabilizing overall revenues. This underscores the importance of having a sound aFRR energy strategy.
The 2-hour and 4-hour batteries generate equivalent revenue, as their aFRR certification is identical.

April 2025

Potential revenue from batteries has reached a level close to its peak since the launch of the aFRR, with an annualized profit of €466,000/MW/year for 2-hour and 4-hour batteries and €253,000/MW/year for 1-hour batteries.
Despite a slight increase in the median SPOT spread (€107/MWh/day vs. €104 in March) and 81 hours of negative prices (compared to 10 hours in March), it was generally in the batteries’ best interest to participate in the aFRR—even the 4-hour batteries.
aFRR capacity prices rose sharply (averaging €40/MWh), with extreme peaks on April 15 and 16 (reaching €1,288/MWh at 11 a.m.). This phenomenon appears to be linked to a decline in aFRR capacity supply.
A shift in the trend became apparent starting in mid-April: the upward and downward aFRR capacity prices, which had been equal 90% of the time up to that point, began to diverge.
FCR prices have also risen, but not enough to compete with the revenue from aFRR—even for a 1-hour battery.
Finally, average marginal prices in the aFRR energy market have fallen sharply, reflecting strong demand for downward reserves and weak demand for upward reserves. Their volatility, however, has increased. These developments appear to be linked to the launch ofPICASSOand increased competition from foreign suppliers. To be continued…

May 2025

After a sharp rise in April, potential battery revenues fell in May to some of the lowest levels since the aFRR was launched. The annualized profit is €171,000/MW/year, €312,000/MW/year, and €313,000/MW/year for 1-hour, 2-hour, and 4-hour batteries, respectively.
As in the previous month, it was generally in the best interest of all battery types to participate in the aFRR market throughout the month of May. The decline in potential revenue is therefore a direct result of lower aFRR prices both at peak (€28/MWh compared to €46/MWh in April) and off-peak (€21/MWh compared to €41/MWh in April)
FCR prices and the daily SPOT spread also declined over the same period (from €107/MWh/day to €83/MWh/day for the average SPOT spread, for example), which explains why it was not in the batteries’ interest to change their market positioning either.
This widespread drop in prices can be attributed, on the one hand, to the string of holidays that led to a decline in demand, and on the other hand, to a sharp increase in solar power generation due to abundant sunshine. The arrival of summer is making itself felt.
The trend observed starting in mid-April regarding the divergence in aFRR capacity prices—specifically, the difference between upward and downward price movements—was fully confirmed in May, as upward prices differed from downward prices 100% of the time.
As for energy aFRR, average prices in May were similar to those in April, and this change from March can be attributed to France’s entry into PICASSO. For downward aFRR, strong foreign demand coupled with low supply prices in France leads to aFRR exports from France (and thus energy imports), and this increased foreign demand drives prices down. Conversely, for rising aFRR, foreign supply offers lower prices, and France therefore becomes an importer.

June 2025

Happy anniversary to the aFRR! It has been one year since June 19, 2024, when the aFRR capacity mechanism was opened for daily bidding. Since then, there have been several regulatory changes that have impacted operations on the aFRR. Here is a summary of some key dates:

November 21, 2023: Launch of the aFRR energy market; reserve operators who wish to do so may submit daily bids to monetize the energy activated in the secondary reserve of their assets (provided they are certified)
June 19, 2024: Launch of the aFRR capacity market; in addition to receiving compensation for energy, reserve providers can now be compensated for their reserved capacity on the aFRR.
January 1, 2025: The granularity of the discrepancies will change from 30-minute intervals to 15-minute intervals.
April 1, 2025: Connection to Picasso—energy bids on the aFRR are pooled among Picasso participants, except during congestion on the interconnections.

April 17, 2025: Starting on this date, the aFRR upward and downward capacity prices will differ, whereas previously they were usually the same.

This year has been a profitable one for battery operations: approximately €200,000 per MW per year for a 1-hour battery over the past year, and approximately €370,000 per MW per year for a 2-hour or longer battery over the past year. Profits remained at high levels throughout the past year.

Trends in June compared to May:

The average FCR prices for capacity, as well as the aFRR prices for both upward and downward capacity, increased by 46%, 43%, and 22%, respectively.

The impact is evident in FCR prices, which continue to rise, reaching an average of €13.3/MWh in June, with a record high of €96/MWh on June 24, 2025, from 12:00 PM to 4:00 PM.
As was the case last month, the 1H strategies engaged in arbitrage between the FCR and the aFRR this month, and their returns are up 13%.
Batteries rated at 2 hours or more remain programmed for aFRR only, and their profits have increased by 11%. However, the energy value captured through aFRR (the sum of activation revenue, load management costs, and Turpe) has been declining since January 2025, as shown in the graph below.
The volume of batteries certified in June on the aFRR is estimated at approximately 170 MW, with demand ranging from approximately 750 MW on the high end to 780 MW on the low end.

August 2025

Battery revenues are in line with the average over the past 12 months, with an annualized profit of €371,000/MW/year in August for a 2-hour battery. The optimal dispatch remains aFRR.
Capacity prices are down on average in August compared to July. The averages are:

FCR capacity: €13.9/MW/h compared to €14.6/MW/h in July
aFRR cap: €44.1/MW/h, compared to €54.3/MW/h in July
aFRR capacity reduction: €29.4/MWh, compared to €41.2/MWh in July

By comparison, a strategy focused solely on day-ahead trading would have generated €63,000 per MW per year in profit, while a strategy focused solely on FCR would have generated €87,000 per MW per year in profit
The capacity of batteries certified under the aFRR is estimated at approximately 240 MW

November 2025

In November, the value generated by batteries was the lowest since the aFRR began operating. €139,000/MW/year, €202,000/MW/year, and €241,000/MW/year for 1-hour, 2-hour, and 4-hour batteries, respectively. This trend has been ongoing for four months: the value generated by a battery has been cut in half since June 2025.
This is due to a sharp decline in the capacity value of the reserve, particularly the aFRR, which had been driving battery revenues until now. The average capacity prices for FCR and aFRR—both upward and downward—have fallen to their lowest levels of the year: €7/MWh, €18/MWh, and €12.5/MWh, respectively. For aFRR capacity, this trend has been observable for several months and is reflected in the evolution of the battery index.
Consequently, the importance of cross-market arbitrage becomes clear, and the 100% aFRR strategy becomes less relevant. We observe that batteries have seen increased participation in wholesale markets (day-ahead and intraday), accounting for between 15% and 25% of the value in November and even more in some previous months.
For the 1-hour battery, the FCR is also starting to appear in the dispatch reports.
The trend in reserve prices is not likely to slow down anytime soon, given the certification of new batteries in the coming months and the increase in the number of certifiable MW per battery resulting from changes to RTE regulations related to the 96 scheduling windows.
The capacity of batteries certified under the aFRR is estimated at approximately 220 MW

January 2026

The trend observed in recent months has continued, with a sharp decline in revenue in December. Over the past six months, revenues have fallen to one-third of their previous levels, returning to levels slightly higher than those of the pre-aFRR period: €60,000, €86,000, €150,000, and €180,000 per MW per year for 0.5-hour, 1-hour, 2-hour, and 4-hour batteries. This sharp decline is due to particularly challenging market conditions for batteries.
The cannibalization of the aFRR is proceeding at a rapid pace and appears to be occurring sooner than expected. Average monthly capacity prices have reached their lowest levels since the market opened (€15.2/MW/h on the up side and €9.5/MW/h on the down side).
The FCR is no longer sufficient, especially since its average monthly rate is at its lowest level in a year (€5/MWh).
Furthermore, volatility in the spot market remains very low. In December, the monthly average of the maximum daily spot spread was the lowest recorded in a year, at €74/MWh.

February 2026

Over the past six months, battery revenue has fallen by two-thirds.
Several factors account for this decline:

Winter seasonality leading to low marginal prices for aFRR capacity
gradual saturation due to the increase in certified capacity (300 MW by February 2026, according to the CRE)
In January, revenue appears to be stabilizing at December levels:
- €58,000/MW/year (0.5 h)
- €85,000/MW/year (1 hour)
- €145,000/MW/year (2 hours)
- €167,000/MW/year (4 hours)