The reserve premium is wearing off: how European flexibility gets paid now

The numbers from 7 to 22 October all pointed the same way. September revenue data from the Baltics and the Nordics, a warning from the French market, and a German build-out racing a filing deadline show capacity reservation, the payment that carried the first wave of batteries, thinning out in the markets that got there first, while energy trading takes over the revenue stack.

Reserve payments are thinning where the batteries arrived first

Clean Horizon published its September Storage Index on 20 October, and the Baltic figures stand out. Lithuania's 2-hour index fell 30% month on month to 174k euros per MW per year, a fourth consecutive decline. Latvia fell 29% to 197k euros, a third consecutive decline. The cause in both cases was the same pair of numbers: average mFRR capacity reservation prices down 22% and aFRR capacity prices down 34%, with day-ahead spreads up about 20% taking some of the sting out. Estonia went the other way, up 29.6% to 197k euros per MW per year, its first increase after two months of falls, driven by day-ahead spreads and higher intraday revenue. Across the Baltics, reserve income fell while energy-market income rose.

Finland shows where that road ends. Clean Horizon figures cited by Energy-Storage.news on 21 October, alongside Foresight's acquisition of the 100MW/400MWh Nivala project, put Finnish annualised gross revenue at its September 2023 peak at roughly 645k euros per MW per year for a 1-hour asset, 810k for a 2-hour and 845k for a 4-hour. By August 2026 those same assets stood at 50k, 78k and 111k. Fingrid expects the roughly 1GW of confirmed deployments in place at the start of the year to be joined by a further 2.6GW now under construction. Clean Horizon's Nordic analysis of 12 Octoberexplains why: ancillary markets have a fixed size set by system needs, the fleet grew into them, and revenue shifted towards trading. Finnish operational capacity went from 295MW in September 2025 to 1,614MW a year later. In DK1, ancillary services supplied 322 of the 436k euros per MW that a 4-hour battery earned in 2025; to July 2026 they supplied 155 of 461k euros annualised, with intraday contributing 242k. Clean Horizon's DK1 forecast has wholesale markets making up to 80% of the stack by 2028.

France is the market where this has not happened yet, and the people building there know it. Damien Guy, founder of technical advisory NR Flex, told Energy-Storage.news on 22 October that the projects online today are "basically just doing secondary reserve", that multiple gigawatts will come online in the next 6 to 12 months, and that the open question is timing, not direction: "it's only a question of when there's going to be that cliff-edge between the price of secondary reserves and the opportunities in the other energy markets." After it, he expects a mix of ancillary services, intraday, day-ahead and a little capacity market, measured against the 100,000 to 120,000 euros per MW per year he says a battery needs to be profitable. Durations are already moving. A few months ago every French project was a 2-hour system, Guy said, and in recent weeks 3, 3.5 and even 4-hour projects have been financed. On 19 October, Enertrag confirmed final investment decision on Les Sablons, a 39MW/117MWh battery in Hauts-de-France that adviser Natural Power calls one of the country's first 3-hour projects, co-located at the same substation as two Enertrag wind farms and due online in spring 2027.

If you own flexible assets, treat the reserve premium as temporary. A business case that rests on one capacity product in one country depends on exactly the revenue that new competition reaches first.

It is worth re-running the revenue case with reservation prices falling and day-ahead and intraday rising, to see what holds up. Duration deserves another look too: France is financing 3 and 4-hour systems because energy markets reward depth, and this month day-ahead spreads were what held the Baltic numbers up. Most of the remaining margin goes to assets that can move between reserve, day-ahead and intraday within the same day without anyone rebooking them by hand.

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 portfolio was underwritten on the ancillary prices of two years ago, we can show you what it looks like dispatched across several markets instead of one.

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The Baltic fleet is about to double, and prequalification is the gate

Lithuania is adding batteries faster than its reserve market is growing, and the next step is already scheduled. Litgrid data reported by IWR on 21 October has up to 20 further storage projects connecting to the transmission grid by the end of 2026. If all of them land, installed power passes 2GW and energy capacity passes 4GWh, clearing a ministry target of 1.5GW that was originally set for 2028.

The same report prices the other side of that trade. Reserving aFRR and mFRR capacity cost the Baltic TSOs 108.6m euros between October 2025 and June 2026, of which 66.6m euros, around 61%, fell to Lithuania, and that figure excludes balancing energy actually activated. The operators' own market review says competition has improved since the common market opened in February 2025 and prices have come down from the opening phase, while the market still leans on a small number of large assets and the TSOs' own resources, with concentration highest in upward mFRR. More assets in the auction mean a wider pool of bidders, and lower clearing prices for each of them.

On 19 October Ignitis and Germany's emsys VPP expanded their virtual power plant partnershipto add a balancing module, so that pooled battery storage can offer aFRR and mFRR rather than only trade intraday. The VPP has run since 2024, originally for direct marketing of a portfolio of about 650MW. The condition attached belongs in every asset owner's project plan: to take part in the balancing market, assets must be technically connected, prequalified, and connected to Litgrid's control system. Wind and solar could be added later.

For Baltic asset owners, the hardware is rarely what holds things up. If you run a battery, a flexible industrial process, a cold store or a charging depot in Estonia, Latvia or Lithuania, prequalification and control-system integration are what stand between you and a balancing revenue line, and they take time. Start them while the asset is still being built. If a single site is too small or too lumpy to stand on its own in an auction, pooling is the way in, and that is what a virtual power plant is for.

Exploratory questions can go to our Fusie knowledge bot first, but if you have a live asset and a date, come straight to us.

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In Germany, a filing deadline is setting the build schedule

Three large German 4-hour projects totalling 3.2GWh moved towards construction in the space of a week. Energy-Storage.news pointed out on 16 October that the announcements come ahead of a 1 January 2027 deadline for owners to prove that final investment decision has been reached, which is what qualifies a project for the 20-year exemption from charge and discharge grid fees. Those projects then need to be online by 1 August 2029. Enlight and Enertrag broke ground on 13 October at Bertikow, 200MW/840MWh in the 50Hertz area, with a seven-year offtake with EDF Trading covering part of the capacity and optimisation by Entrix. Vattenfall signed Fluence for a turnkey 254MW and 1,000MWh-plus battery at the Brunsbüttel nuclear site. Giga Storage agreed a grid connection with Amprion for its 350MW/1,400MWh Albatross project, which ESN reads as a flexible connection agreement, noting that virtually every large-scale project in Germany has to enter one to get connected at all.

The volume behind those headlines is real. BSW-Solar's analysis of the regulator's market register, reported on 22 October, counts about 8.2GWh of storage commissioned in Germany in the first three quarters of 2026, up 91% year on year across more than 500,000 systems. Utility-scale accounted for roughly 3.8GWh of that, up around 350% and just under 46% of all new capacity, while C&I storage climbed 67% to about 0.7GWh. The association expects the full year to clear 10GWh, and has put 15 reform proposals on the table: a legally binding right to fair and flexible grid connection agreements, an obligation on distribution operators to tender for grid-supportive storage at substations, and a redispatch rule that looks at the grid connection point rather than the individual asset, so a co-located battery can soak up surplus solar instead of the plant being curtailed. A Fraunhofer IEE study from July put the prize at around 3.9bn euros a year in modelled savings from 20GW of additional 4-hour storage.

The German lesson applies elsewhere too. Connection terms, more than headline prices, decide how much of a project's capacity ever reaches a market. If you are building behind a constrained connection, or already live with one, two questions matter: what your agreement actually limits, and whether your dispatch respects that limit automatically while still chasing the best hours. Co-located PV plus storage is the clearest case. The battery only pays for itself if it can take the surplus the connection will not carry.

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Regulatory and market watch

• Germany, 1 January 2027. Owners must prove final investment decision to keep the 20-year grid-fee exemption, with commissioning by 1 August 2029 (Energy-Storage.news).
• Germany, 3 November 2026. The Bundesnetzagentur announces the winning bids in the first StromVKG long-term capacity auction, which closed to bidders on 8 September (Bundesnetzagentur).
• Italy, 24 November 2026. Terna's second MACSE storage auction, targeting 16GWh for 2029 delivery, follows the 10GWh awarded in the first round (ESS News).
• Baltics, annual balancing review. Litgrid, AST and Elering are due to submit their annual analysis of balancing-service provision to the regulators, covering the demand-reduction resources that are being wound down towards November 2028 (Elering).
• Lithuania, end of 2026. Litgrid expects up to 20 more storage projects on the transmission grid, which would take installed capacity past 2GW and 4GWh (IWR).