Recently released data on pre-qualified capacities on ancillary markets has revealed an interesting—though not entirely surprising—shift in the ancillary services participation of batteries. Batteries are clearly rushing to grab a piece of the mFRR market.

Current Status

Like many other de-regulated markets around the world, primary regulation was the initial driver of the energy storage deployment. This market generally offers high remuneration, but they are small in size. Batteries tend to push out the most expensive assets in the merit order, thus reducing prices. Let’s look at some historical price and prequalified capacity data which will drive the point home.

Fast Frequency Response (FFR) was the first one to experience this cannibalisation effect. Prices dropped significantly in 2023. With annual average procurement volumes between just 2–4 MW, it doesn’t take much to saturate the market. Based on the pre-qualification data from Svenska Kraftnat (Swedish Transmission System Operator), at the end of 2022, 40MW of energy storage was pre-qualified in FFR, 10 MW in FCR-D up, <10MW in FCR-D down and 0 MW in the rest of the markets.

FFR is mainly needed in the summer so price and volume data is yet to be published for 2025.

Following FFR, the focus moved to Frequency Containment Reserves, of which there are two types: symmetric FCR-N (for normal operation) and asymmetric FCR-D (for disturbances).

Participation in  FCR-D is preferred over FCR-N. Since FCR-D is activated less frequently, it allows battery operators to earn revenue while minimising degradation.

Let’s look at the FCR prices for 2024.

With the exception of a brief spike in April (caused by increased procurement), FCR-D prices have steadily declined—much to the disappointment of Swedish energy storage owners and developers. This trend, however, should not come as a surprise.

What’s changed?

FCR-D is no longer a highly lucrative option it used to be. As a result, attention has shifted to mFRR, the tertiary reserve market. The evidence is compelling: at the beginning of 2025, just 120 MW of storage was pre-qualified for mFRR. By the end of Q1, this number had jumped to nearly 600 MW.

The rationale is clear. The secondary reserve, aFRR, is currently unsuitable for storage participation due to its pro-rata activation mechanism and some technical constraints. These limitations are expected to be eliminated once Svenska Kraftnät joins the PICASSO platform. That leaves mFRR as the main opportunity. Recent reforms in mFRR—including automatic activation and the adoption of a 15-minute market interval—are expected to increase price volatility. While this is unfavorable for end users, it represents a promising opportunity for energy storage operators.

Svenska Kraftnät recognizes this as well. On March 14th, coinciding with the rollout of mFRR reforms, the TSO distributed a survey through its newsletter. The goal was to better understand the barriers preventing storage operators and aggregators from participating in mFRR.

Conclusion

Starting this year, mFRR is expected to occupy a growing share of the revenue stack for energy storage. Over the next few years, aFRR will likely join it once Sweden integrates with PICASSO. Svenska Kraftnat is also expected to increase the volumes procured for aFRR and mFRR by 2030 which should help price levels in these markets as more batteries rush to the grab a piece.

Clean Horizon incorporates all these dynamics into its price forecasting for Sweden.

Author: Pratik Ashwekar