Emaldo Market Review August: The Swedish Ancillary Services Market

Issue 3 | September 2026 — covering August 2026

Where we are now

In last month's review we promised to cover price movements across FCR, mFRR, and day-ahead trading in Sweden and what the first weeks of the autumn demand season are delivering. This month's review covers August 2026. The headline is straightforward: revenues for shorter-duration battery systems in Sweden were broadly flat through August, and Grid Rewards payouts have not increased as a result. This review explains why, and what the data tells us about the months ahead.

August in the Swedish market: seasonal softness continues

August is structurally one of the softer months for Swedish battery revenues. High wind and solar generation, lower electricity demand, and the seasonal compression of day-ahead price spreads all combine to limit the revenue opportunity across both ancillary services and wholesale trading. The most recent Clean Horizon Storage Index data, covering July 2026 and published on 1 September, gives the clearest available benchmark for the period immediately preceding August. In July, revenues for a two-hour battery in Sweden decreased by 20% compared to June, reaching 126,000 euros per megawatt per year. This was driven by a 30% decrease in FCR capacity prices and mFRR capacity reservation prices. Given that August continued the same seasonal pattern, with no material shift in either product, revenues for shorter-duration batteries remained at similarly compressed levels through the month.

The June 2026 baseline had been 164,000 euros per megawatt per year for a two-hour system, supported by a 10% improvement in day-ahead spreads that month. July removed that support. August maintained the same picture. FCR and mFRR capacity reservation are the dominant revenue drivers for shorter-duration residential batteries, and both remained under pressure through the summer.

FCR: flat at lower levels

FCR-D capacity prices in Sweden have now been at a fraction of their 2022 and 2023 highs for well over a year. FCR-D contributed barely 1% of total Swedish BESS revenue in recent months according to Clean Horizon's revenue stack analysis. FCR-N has been more resilient: Swedish FCR-N prices in SE4 were the strongest in the Nordic region at a median of 24.14 euros per megawatt per hour during the summer quarter, but this is still a fraction of what drove the original battery gold rush. Through August, FCR prices in both products were stable at their lower levels rather than falling further, but without a meaningful recovery either.

mFRR: a temporary retreat after earlier growth

mFRR capacity reservation prices fell by 30% in July compared to June, and August did not see a recovery. After mFRR emerged as the key ancillary services opportunity in Sweden through 2025 following the introduction of the 15-minute Market Time Unit in March of that year, a rapid increase in pre-qualified battery capacity has applied the same supply-driven pressure to mFRR that previously affected FCR-D. According to Svenska Kraftnät's data, prequalified battery storage on mFRR Up increased from 120 megawatts to 697 megawatts between January and June 2025. The pace of new supply entering the market has temporarily outrun the growth in procurement volumes, keeping prices below where they were in the spring.

Longer-duration batteries: a different experience

It is important to note that not all battery assets experienced August in the same way. The Clean Horizon index tracks one-hour, two-hour, and four-hour systems separately. Longer-duration assets, particularly four-hour systems, have greater ability to participate in day-ahead and intraday energy arbitrage across wider price spreads, and to sustain mFRR energy activations for longer periods. These capabilities give four-hour batteries access to revenue streams that are less directly affected by capacity market saturation. Enspired's Q3 2026 monthly BESS report showed that for July, stronger aFRR capacity revenues more than compensated for lower FCR income for one-hour systems, with one-hour portfolio revenues increasing to 178,600 euros per megawatt per year. The residential batteries in Emaldo's portfolio are shorter-duration assets, and their revenue profile reflects the capacity market trends that kept earnings flat through August.

What the autumn is expected to deliver

As Sweden moves from summer into autumn, several dynamics shift in favour of higher battery revenues. Electricity demand increases as heating needs grow, renewable generation becomes more variable, and the gap between peak and off-peak prices typically widens, increasing the value of both FCR activations and day-ahead arbitrage. August is historically the bottom of the Swedish battery revenue cycle, and the transition into September and October tends to produce improvement.

On a structural level, Flower's operational experience from the Bredhälla facility and other assets confirms that multi-market strategies combining FCR, mFRR, and day-ahead trading outperform any single-market approach. Svenska Kraftnät's Balancing Market Outlook 2030 anticipates growing procurement volumes for aFRR and mFRR as the energy transition deepens. Sweden's eventual connection to PICASSO for aFRR energy activation remains an untapped revenue opportunity that has not yet been subject to supply-driven saturation. These are structural tailwinds that will matter increasingly as the seasonal environment improves.

What this means for your earnings

Grid Rewards payouts in Sweden have not increased over the past two months. FCR and mFRR capacity prices fell through July and remained flat in August, and the summer wholesale market did not generate the trading revenues needed to offset that. The residential batteries in Emaldo's portfolio experienced the softest part of the annual revenue cycle through July and August.

We expect the seasonal upturn into autumn to support improved earnings in the months ahead. Emaldo continues to work with our Swedish partners, including Flower and Qurrent, to access and optimise across all available markets on your behalf. Your battery also continues to save you money on your electricity bills every day regardless of ancillary service market conditions.

Next month

In our next review we will cover price movements across FCR, mFRR, and day-ahead trading in Sweden for September, and whether the autumn demand season is delivering the improvement in revenues the seasonal pattern suggests.