Emaldo Market Review August: The Danish Ancillary Services Market

Issue 3 | September 2026 — covering August 2026

Where we are now

Last month's review promised to cover price movements across FCR, aFRR, mFRR, and intraday markets in DK1 and DK2 and what the start of the autumn demand season is delivering. This month's review covers August 2026. The core message is clear: Grid Rewards payouts in Denmark have not increased over the past two months, reflecting a market in which revenues for shorter-duration batteries have been broadly flat to slightly declining. The picture continues to differ between DK1 and DK2, and longer-duration assets have had a different experience from shorter-duration ones in ways worth understanding.

DK1: flat revenues, continued capacity market pressure

In DK1, August continued the pattern established through June and July. FCR and aFRR capacity reservation prices remained under pressure as competition from growing battery supply kept capacity revenues compressed. The Clean Horizon August 2025 Storage Index, covering a comparable summer period, noted that revenues in DK1 slightly decreased that month due to lower FCR prices and limitations on mFRR market exchanges caused by grid maintenance. August 2026 followed a broadly similar pattern: summer conditions, narrower wholesale market spreads, and soft capacity prices produced flat to slightly declining revenues for shorter-duration batteries.

For four-hour batteries in DK1 specifically, the comparable Clean Horizon September 2025 data showed that the decrease in aFRR capacity prices combined with lower day-ahead volatility led to a drop in revenues even as shorter-duration assets held up better through FCR and mFRR capacity reservation. This divergence between shorter and longer-duration assets in DK1 continued through August 2026: four-hour systems were more exposed to the fall in aFRR capacity prices, while one-hour and two-hour systems were cushioned to some degree by FCR reservation.

DK2: intraday and FFR provide partial offset, but overall earnings unchanged

DK2 continued to tell a more nuanced story through August. In July 2026, the Clean Horizon Storage Index reported that intraday market volatility in DK2 increased due to solar production, and FFR activations were meaningfully higher than in June, producing a positive revenue outcome relative to the previous month for assets participating in those markets. August followed a similar pattern, with solar-driven intraday volatility continuing to provide some support and FFR activations adding a modest contribution.

However, while DK2's multi-product revenue stack provided some resilience, it was not sufficient to produce a net increase in overall Grid Rewards payouts across the Danish customer base. The gains from intraday and FFR were offset by continued capacity price softening across both zones and summer wholesale market conditions. The comparable Clean Horizon August 2025 data showed that following the completion of the 400 kV line maintenance works on 10 August 2025, batteries in DK2 benefited from more attractive prices on FCR-N, FCR-D, and aFRR, with revenues increasing compared to July that year. August 2026 did not produce a comparable catalyst, and revenues remained flat.

Why residential batteries have not seen higher payouts

The residential batteries in Emaldo's portfolio are shorter-duration assets. Their revenue profile is more heavily weighted towards FCR and aFRR capacity reservation than towards intraday and FFR energy spikes, which tend to benefit longer-duration assets more in DK2. In a period when capacity reservation prices have been softening across both zones and the wholesale market has been seasonally subdued, the revenue components most relevant to shorter-duration residential batteries have not increased. This is the direct explanation for why Grid Rewards payouts have been stable rather than rising over the past two months.

What the comparable data tells us about September

The Clean Horizon October 2025 Storage Index, which covered September 2025, provides a useful reference for what may follow in September 2026. In that period, DK1 saw further pressure from falling aFRR capacity prices and lower day-ahead volatility. DK2, however, told a different story: both day-ahead and aFRR energy market volatility slightly increased, resulting in a significant improvement in revenues for four-hour batteries compared to August. This seasonal divergence between DK1 and DK2 in early autumn is consistent with the structural differences between the two zones: DK2's smaller bidding zone with limited assets providing balancing services means that renewable shortfall events produce rapid and significant price spikes that benefit assets prequalified to capture them.

As autumn progresses with increasing demand, more variable wind output, and fading summer solar surplus, the conditions that historically support better DK2 revenues are beginning to reassemble. Whether September 2026 follows the 2025 pattern will be covered in next month's review.

Investment confidence in the Danish market remains strong

Notwithstanding the current softness in capacity revenues, the structural case for battery storage in Denmark continues to attract investment. The Danish battery energy storage market is forecast to grow to 5.25 billion US dollars by 2032 at a compound annual growth rate of 16.7%. Denmark's target of 100% renewable electricity by 2030, combined with the ongoing retirement of conventional thermal generation, is expected to increase wholesale price volatility over the medium term, directly benefiting batteries that can trade intelligently in day-ahead and intraday markets. Emaldo's Danish partners Twig Energy, Hybrid Greentech, and Modstrom are all actively positioned across these developing opportunities.

What this means for your earnings

Grid Rewards payouts in Denmark have not increased over the past two months. FCR and aFRR capacity reservation prices have been under continued pressure in both DK1 and DK2, and summer wholesale market conditions have limited the trading revenue that might otherwise offset that. DK2 showed some resilience through intraday and FFR revenues in July and August, but not at a level sufficient to lift overall payouts.

The early autumn typically brings more favourable conditions for battery revenues in Denmark, particularly in DK2. We will report on whether that seasonal pattern is materialising in next month's review.

Your battery continues to save you money on your electricity bills every day regardless of ancillary service market conditions, and Emaldo continues to work across all available markets to maximise what your battery earns on your behalf.

Next month

In our next review we will cover price movements across FCR, aFRR, mFRR, and intraday markets in DK1 and DK2 for September, and whether the autumn demand uplift is beginning to deliver improved battery revenues in both zones.