Reviewing the annual averages1, the downward price trend aligns with a substantial increase in the flexible capacity offered to the market. In Q1 2022, only 77 MW of capacity was contracted, while by Q4 2024 this figure had risen to 470 MW—a steady growth observed over the years.
What Does This Mean for Estonia?
Currently, Estonia’s frequency market is still in its early stages. Most transactions occur in the mFRR market, and from early February, orders have begun for the aFRR product. Having recently joined the MARI and PICASSO platforms, we appear to be at a similar stage to where Sweden was in 2022. Comparing ordered volumes and prices in the mFRR market between 2023 and 2024, we see that while the volumes for frequency regulation have increased, the price per MWh has been on the decline. However, following de-synchronization, a sharp upward price surge was noted — when comparing the beginning of January to early February, the ordered volumes dropped by less than 10%, yet the average price of MTU for both upward and downward regulation surged by 100–200%.
Looking Ahead: Could We Follow Sweden’s Example?
The key difference from the Swedish case is that the cost of adding flexible megawatts has never been as low as it is today. With battery solution prices at record lows, it’s likely that the market may saturate much faster here than in Sweden, potentially leading to price stabilization in less than the three years observed in Sweden.
In frequency markets, speed is paramount—and every successive six-month period appears to be less profitable than the previous one.
If you are interested in price examples of other EU energy markets, you can follow Clean Horizon developed Storage Index2.
