In the electricity market, frequency regulation reserves (FCR) play a crucial role in maintaining grid stability. February 2025 brought some interesting developments to Sweden's FCR market, with prices reaching new lows.
What happened with FCR prices?
Svenska kraftnät's February report shows average prices dropping to:
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FCR-N (normal frequency regulation): just under 15 EUR/MW
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FCR-D up and down (disturbance regulation): below 3 EUR/MW
These represent the lowest average prices** recorded for these services in recent years.
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Why the low prices?
Several factors contributed to this situation:
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Favourable hydropower conditions: Sweden's reservoirs are well above normal levels, providing plenty of flexible capacity.
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Low spot electricity prices: Especially in northern Sweden (SE2), making it less costly for providers to offer regulation services.
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Market diversity: More energy storage systems and demand-side flexibility are participating in FCR markets, increasing competition.
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Market structure change: The shift to marginal pricing in February 2024 has encouraged more competitive bidding.
What's next?
Svenska kraftnät has increased its procurement volume for FCR-D down to 524 MW starting January 2025, which represents their full requirement for the year.
Water reservoir levels remain high as we're now in the midst of spring snowmelt. This abundant water supply is currently supporting the hydropower production that contributes to these low FCR prices we've been seeing**.
Exciting Developments...
Sourceful Energy is developing an affordable consumer solution that makes it easy to connect home batteries to the grid through a simple Energy Gateway and smartphone app. This will launch during 2025, enabling homeowners to participate in flexibility markets both behind and in front of the meter**.
