Emaldo Market Review July: The Danish Ancillary Services Market

Issue 2 | August 2026

Where we are now

In our June review we promised to cover the latest price movements across FCR, aFRR, and mFRR in DK1 and DK2 and what they mean for the months ahead. The picture that has emerged since then is one of continued pressure on capacity-based revenues, but with some genuinely encouraging signals coming from intraday and wholesale markets, particularly in DK2.

DK1: capacity revenues under pressure, trading stepping up

Since 2023, revenues in DK1 were supported primarily by participation in Day-Ahead and Intraday trading and FCR services. The opening of the aFRR capacity market and participation in PICASSO from October 2024 provided a meaningful boost, but that uplift has not held. In May 2026, revenues from aFRR and mFRR capacity markets in DK1 declined as competition among storage assets increased. This is consistent with the broader European pattern of new battery capacity growing faster than the procurement volumes that grid operators need to fill.

The encouraging news for DK1 is that the Day-Ahead and Intraday trading foundation that underpinned revenues before the aFRR boom remains intact. Denmark's push towards 100% renewable electricity by 2030, combined with the retirement of conventional generation, is expected to increase price volatility in wholesale markets, which directly benefits batteries that can buy and sell electricity at the right moment. As ancillary service revenues moderate, this is precisely where Emaldo is focused on developing its market access to ensure your battery earns as much as possible across all available opportunities.

DK2: intraday strength is an encouraging signal

DK2 tells a more encouraging story during July. In May 2026, stronger intraday market performance in DK2 partially offset the declines in aFRR and mFRR capacity revenues. This is one of the clearest signals we have seen that as capacity-based ancillary revenues compress, other markets are beginning to compensate, and that batteries positioned across multiple revenue streams are meaningfully more resilient.

DK2's position in the Nordic synchronous area gives it access to a broader range of products than DK1, including FFR, FCR-N, FCR-D, aFRR capacity and energy, and mFRR capacity reservation alongside Day-Ahead and Intraday markets. The diversity of this revenue stack is a genuine structural advantage. No single product dominates, which means no single product's price fall determines the overall outcome.

DK2 also retains a structural characteristic that makes it particularly interesting for the longer term. Because it is a relatively small bidding zone with a limited number of assets providing balancing services, periods of renewable shortfall can produce dramatic price spikes in aFRR and other balancing products. A single aFRR activation on 2 February 2025 reached 2,100 euros per megawatt-hour in DK2 when low wind drove the PICASSO merit order to extreme levels. These events are infrequent, but batteries that are prequalified and well-optimised to capture them can see meaningful revenue uplifts that do not show in the monthly averages.

The bigger picture: multi-market optimisation is where value lies

The clearest theme emerging from both Danish bidding zones is that single-market strategies are no longer sufficient. By early 2026, ancillary service saturation had reached the Nordics and other major European markets. The predictable, capacity-based revenues that once made FCR so attractive have compressed significantly as battery supply has grown faster than procurement demand.

The mitigation, and the opportunity, is multi-market participation. In most markets, 40 to 70% of optimised battery revenue comes from ancillary services and balancing markets rather than pure arbitrage, but the balance is shifting towards wholesale and intraday trading. In Denmark, where Day-Ahead and Intraday markets are active and well-functioning, this transition is a natural evolution rather than a disruption.

Denmark's mFRR market also operates as part of a trilateral arrangement with Sweden and Finland, meaning bids located in Denmark can cover needs in those countries and vice versa, provided there is interconnector capacity available. As the neighbouring Nordic markets continue to develop, this cross-border structure gives Danish battery assets access to a growing pool of demand.

What this means for your earnings

Capacity-based revenues in both DK1 and DK2 remain below the peaks of 2023 and the late 2024 aFRR spike period, and Grid Rewards earnings reflect that today. We want to be straightforward about where the market is, while being equally clear about the direction of travel.

The intraday resilience showing in DK2, the growing role of wholesale trading in DK1, and the structural demand growth that Denmark's energy transition will drive are all reasons to be genuinely optimistic about the medium-term trajectory for battery storage earnings. Emaldo will continue to develop its capabilities across every available market, evolve with the market as new opportunities emerge, and work hard to increase what your battery earns on your behalf.

Your battery also continues to save you money on your electricity bills every day regardless of market conditions. That consistent, day-to-day saving sits alongside Grid Rewards and does not depend on ancillary service prices.

Next month

In our next review we will cover price movements across FCR, aFRR, mFRR, and intraday markets in DK1 and DK2 for July and August, and what the start of the autumn demand season may mean for the market outlook.