The regulator showed up, and battery capex stopped falling

Most of what came out between 7 and 22 October was not about revenue. An Estonian regulator fined a balancing bid that was priced so it would not be called, Wood Mackenzie reported the first rise in European battery installation costs in three years, and ACER set a date to consult on the model that will decide how much flexibility the EU says it needs. All of it sits on the cost side of the business case: what a flexible asset costs to build, and what it costs to get the bidding rules wrong.

A balancing bid priced to avoid activation just drew a fine

On 9 October the Estonian Competition Authority fined Futugrid Technologies OÜ 16,000 euros for manipulating the wholesale energy market. ACER picked the case up on 14 Octoberand flagged what makes it notable: it is the Authority's first decision on market manipulation under Article 5 of REMIT, and it concerns a single balancing-market bid.

On 31 March 2025 the company's offer was accepted on the Baltic balancing capacity market, the market where providers are paid to stay available. That acceptance created an obligation to submit a corresponding energy bid for delivery the next day. The company wanted to pause service while it finished a software update, so it submitted 1MW of downward mFRR for the quarter hour from 12:00 to 12:15 on 1 April at minus 9,999 euros per MWh, a price chosen so the bid would not be activated. It was activated anyway, and that price became the marginal balancing energy price for the period. The Authority found the bid was not genuine, because its purpose was to avoid activation while still discharging the capacity obligation, and that it sent a misleading signal and directly influenced price formation. Under the Estonian Electricity Market Act the maximum penalty for a legal person is 32,000 euros, so the fine is half of it. The decision has not entered into force and can be challenged in court.

None of this came out of nowhere. Litgrid, AST and Elering jointly maintain a Best Practice Guidance on balancing-market trading practices, updated at the start of September in response to market developments and the results of market monitoring, with a track-changes version published alongside it. Article 15 of REMIT already requires Litgrid to monitor the market and report suspected abuse to the national regulator and to ACER. What changed in October is that a Baltic regulator put a number on it.

If you own a prequalified battery, run flexible industrial load, or let an aggregator bid either of them, the lesson is an operational one. Availability is a contractual promise, and the price you submit is read as what you intend to do.

So go through your bid library and make sure every price is one you would actually deliver at; a price set to be ignored is now a documented breach in at least one Baltic market. Plan firmware and control-system updates around your capacity obligations, and when a maintenance window collides with one, use your TSO's unavailability process instead of a price you hope nobody takes. And if someone bids on your behalf, ask to see in writing how they handle an asset that cannot perform.

That is the everyday work of running flexibility. Fusebox integrates and dispatches BESS, PV, EV chargers, HVAC systems and C&I industrial loads in a single platform, and we operate across 15 European markets and 9 TSOs. If your asset is prequalified and someone else is holding the pen on its bids, it is worth knowing exactly how they handle an outage.

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Battery capex stopped falling, and the money moved off the battery

Wood Mackenzie released its levelised cost update on 8 October, and Energy-Storage.news reported the findings on 19 October. The headline is good for storage: 4-hour batteries are cheaper than open-cycle gas turbines in all 43 markets where both were modelled. Ahmed Jameel Abdullah, principal analyst at the firm, calls the shift "decisive and widening", because "gas turbine shortages and rising fuel volatility are driving up peaking costs, while expanding battery manufacturing continues to push storage costs down". The European detail is less comfortable. Installation costs in Europe ticked up around 2%, the first rise in three years, after cell prices bounced back about 10% from their 2025 low on firmer demand and higher lithium prices. Wood Mackenzie still expects European capex to fall 12% by 2031, but the decline slows once lithium prices roughly double in 2029 as oversupply clears. Europe also carries the highest fossil generation costs of any region in the study, with carbon costs projected to overtake fuel costs by 2030.

A panel at the Battery Asset Management Summit UK and Ireland, written up on 20 October, showed where the money actually sits now. Michael Darzi of Gore Street said DC block containers made up 50 to 60% of project capex five years ago and are now around 38%, even though lithium has doubled per kilogramme since November 2025. The weight has shifted to high-voltage transformers, grid-code compliance, early civil works and grid connection, and he warned that connection costs "can be quite material and can put a damper on your project economics overall". Steven Coppack of Timera Energy said cheaper cells are pushing investment cases towards longer duration while balance-of-plant costs do not fall at the same pace, which concentrates pressure on a small pool of suppliers who can actually install the equipment. His other remark is the one to copy into a risk register: the industry has signed warranties that are, in his words, "just not fit for purpose in a world where the ancillary markets are saturating". On procurement, the panel put a full wrap contract at roughly 25 to 26 million euros against about 23 million for multi-contracting on the same project, and Darzi argued for signing the toll and the procurement contract at the same time so the toll price reflects the capex being financed.

For anyone sizing a build for 2027 or 2028, cheaper cells will no longer carry the case on their own. What the connection costs and how many markets the asset can sell into once it is live matter more now. An expensive or constrained connection is survivable if the asset earns across several products, and painful if it was underwritten on one.

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The EU is building the yardstick for how much flexibility it needs

On 21 October ACER announced a public consultation on the preliminary version of EU-Flex, an open-source electricity market model built to assess flexibility needs across the EU. The mandate comes from the 2024 electricity market design reform, which tasked ACER with estimating flexibility needs across the Union and identifying the gaps. The first assessment is planned for July 2027.

The consultation runs from 5 November to 17 December, and the release is unusually open: an explanatory paper with a worked test case, the model source code and its test-case input data, and a separate methodology document. ACER is holding a webinar on 17 November to present the model and demonstrate how to run it. The agency says the point is to let stakeholders examine the approach before the 2027 assessment and to flag gaps and limitations.

It is a long-horizon process, but worth an hour of a portfolio manager's time. National flexibility targets and procurement plans will be argued over the number this model produces, and assumptions about what a battery, a chiller or a charging depot can deliver tend to be made once and quoted for years. If your asset class is modelled thinly, a consultation is the easier place to fix it, and because the code is public, you can back a response with your own numbers. For a quick orientation on which products your assets could qualify for, our Fusie knowledge bot is a reasonable starting point.

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Regulatory and market watch

• EU, 5 November to 17 December. ACER's public consultation on the preliminary EU-Flex model, with a webinar on 17 November and the source code and test data published alongside it (ACER).
• EU, July 2027. The first EU-wide assessment of electricity flexibility needs, which EU-Flex is being built to support, under the 2024 market design reform (ACER).
• Estonia, open. The Futugrid decision has not entered into force and can be challenged in court, so the first Estonian reading of Article 5 of REMIT in a balancing market is not settled yet (Konkurentsiamet).
• Baltics, now. The Best Practice Guidance on balancing-market trading practices from Litgrid, AST and Elering was updated at the start of September, and a track-changes version shows what moved (Litgrid).