Svk Balancing Market Outlook 2030 (2024)

Svenska kraftnät — “Balancing market outlook 2030.” Published 2024-12-19. Svk’s first outlook report on ancillary service markets, written by the Balancing Markets department (Director: Anna Jäderström). 51 pages. Covers historical development, market design context, per-product outlooks (FFR/FCR-D/FCR-N/aFRR/mFRR), and cost allocation. Intended to give market actors information for investment decisions and business case development. Companion to the Source - Svk Reserver Framtida Volymbehov (2025) volume forecast web page.

Key market design developments (timeline)

Historical cost context

• Procured balancing capacity volume: +300% since 2019
• Three main drivers: Introduction of mFRR CM (Oct 2023, not previously in capacity volumes); larger Swedish share of Nordic FCR requirements (sharing key changes); new HVDC cables increasing the Nordic reference incident
• Price drivers 2019–2022: Rising spot prices (spot = opportunity cost for up-regulation); more volatile prices (tight down-regulation when prices are low); market concentration in some products
• Costs have come down from the 2022 peak as FCR markets have deepened and switched to marginal pricing (Feb 2024)

FFR — key highlights and outlook

• Annual procurement: 250 MW; total prequalified capacity Q4 2024: 410 MW; prequalified capacity has grown +270 MW since 2023, a 170% increase
• BSPs: 18 providers as of Q4 2024; +4 in 2024, +7 in 2023 — fastest-growing market segment
• Technologies: BESS (10 MW), Demand response (100 MW), Hydro + BESS (430 MW), other (320 MW)
• Svk TSO share: 35% of Nordic responsibility (2025)
• Pricing: Falling due to improved competition; marginal pricing (call-off based)
• Outlook: Transition from annual procurement with weekly call-offs to D-1 capacity market planned for 2027 (new IT platform); volume outlook highly scenario-dependent (see volume forecast source)
• Dynamic FFR: Technical pre-conditions for a new dynamic FFR product under investigation in a Nordic joint project

FCR-D upward — key highlights and outlook

• Svk TSO share: Decreasing from 39.1% to 37.4% in 2025 (based on 2023 generation/consumption data)
• Prequalified capacity Q4 2024: Hydro (590 MW), Hydro+BESS (3,710 MW), BESS (20 MW), other (50 MW), Demand response (420 MW), additional (2,710 MW) — large total prequalified pool
• BSPs: 22 providers; +8 in 2024, +2 in 2023
• Technologies trending: BESS and demand response
• Pricing: Pay-as-cleared since February 2024; falling due to lower spot prices and improved competition
• Outlook: FCR markets migrating to Fifty Nordic MMS platform in 2025; long-term ambition is a common Nordic FCR market (but minimum 2/3 national procurement rule remains); static FCR-D quota under analysis (see below)
• Static FCR-D: Entities unable to meet dynamic activation/deactivation requirements may provide Static FCR-D with a 15-minute grace period. Nordic TSOs analyzing a quota for maximum allowable share of static resources to protect system stability; quota will be implemented once level is determined

FCR-D downward — key highlights and outlook

• Svk TSO share: 37% (2025); same sharing key change from 39.1%
• Prequalified capacity Q4 2024: ~5,340 MW across BESS, CHP, demand response, hydro, hydro+BESS, solar, wind; 22 BSPs (+8 in 2024)
• FCR-D downward market started in 2022; volume ramped up quarterly; 2025 = first year at full volume corresponding to Swedish Nordic share
• Same Fifty Nordic MMS migration and static FCR-D quota considerations as FCR-D upward

FCR-N — key highlights and outlook

• Svk TSO share: 37%; Nordic requirement 600 MW
• Prequalified capacity Q4 2024: ~3,960 MW total (1,980 MW hydro, 1,790 MW hydro+BESS, 120 MW BESS, remaining CHP/other)
• BSPs: 17 providers; +8 in 2024
• Hydro power still dominates FCR-N; BESS is the trending technology
• Price pattern: Historically correlated with the higher of FCR-D up and FCR-D down prices (symmetric requirement). Introduction of new actors in FCR-D has made this correlation less obvious recently
• Outlook: Same Fifty Nordic MMS migration; Nordic re-evaluation of FCR-N dimensioning ongoing

aFRR — key highlights and outlook

• Current maximum hourly demand: 106 MW up / 111 MW down; procured hourly volume ranges 53–111 MW
• Prequalified capacity Q4 2024: 2,340 MW up / 2,400 MW down (hydro and wind dominate)
• BSPs: Only 6 providers — by far the most concentrated Nordic balancing market; zero new providers added in 2023–2024
• Svk share: 26% up / 28% down; 2025 Nordic requirement is 300 MW up / 400 MW down
• Price asymmetry: aFRR down prices consistently exceed aFRR up prices in all Swedish zones. Reason: Norway imports cheap capacity to satisfy Swedish aFRR up demand, driving down up-regulation prices; Sweden must rely on national capacity for aFRR down, keeping down-regulation prices higher
• Seasonal pattern: Prices rise as hydro flexibility decreases during the spring flood, for both up and down — but to a larger extent for aFRR downward
• Outlook: Demand rising from 106/111 MW toward 160–400 MW range by 2030; step increase expected with PICASSO connection (ACE-based sizing replaces frequency-quality-based sizing)
• PICASSO connection: Svk + Statnett planned connection 2027/2028; Energinet connected Oct 2024, Fingrid connected Jan 2025. At connection, aFRR shifts from pro-rata activation of all CM bids to merit-order (merit-based) activation, similar to mFRR today. New BSPs will be able to connect to aFRR at PICASSO connection. Imbalance price will incorporate aFRR energy (in addition to mFRR).
• PICASSO price risk: Italy disconnected from PICASSO in March 2024 due to extreme price spikes; measures being implemented (elastic demand, new algorithm)

mFRR — key highlights and outlook

• Capacity market: Started 18 October 2023; current max volume Up 630 MW / Down 750 MW; 12 BSPs in CM (+5 in 2024)
• Prequalified capacity Q4 2024: 14,420 MW up / 14,690 MW down — very large supply pool across all technologies; trending technology up = demand response, down = wind power
• Energy activation market: 15 BSPs (+3 in 2024, +2 in 2023); total activated 2023 = Up 643 GWh / Down 629 GWh; much delivered historically from Norway
• Trilateral CM: Sweden–Denmark–Finland common mFRR CM since 19 November 2024
• ACE-based mFRR: Under the NBM, mFRR will be more proactive — area imbalances forecast for the pending operational period and balanced mainly by scheduled mFRR activation, replacing the frequency-reactive approach
• Local activation trend: Power system imbalances increasing; transmission capacity constraints mean more local (per-bidding-area) mFRR activations will be needed going forward
• MARI connection: Nordic TSOs planning connection 2027/2028 as a group; Nordic mFRR EAM is the technical intermediate step. MARI (Manually Activated Reserves Initiative) = European mFRR energy exchange; 12 TSOs from 9 countries connected as of Dec 2024. Connection removes the spot-price floor/ceiling on up/down mFRR bids and enables European competition

Cost allocation structure

Ancillary service costs are split among three mechanisms:

The BRP fee has three components: an imbalance fee (based on BRP’s own imbalances), a fixed administration fee, and a portfolio-size component.

Relation to existing wiki content

• Balancing Markets: This is the primary source for the 2025–2030 volume projections; new data on BSP counts, market concentration, PICASSO/MARI timelines, static FCR-D quota, cost allocation, aFRR price asymmetry
• Nordic Balancing Model: PICASSO and MARI connection timelines; ACE-based aFRR and mFRR design; trilateral mFRR CM
• Svenska kraftnät: Issuing body; this is Svk’s strategic market outlook document
• Aggregation: aFRR’s 6-BSP concentration is the key near-term supply-side barrier; PICASSO connection opens new BSP entry
• CheckWatt: FCR market data (410 MW FFR prequalified, 22 FCR-D BSPs) contextualizes CheckWatt’s market position (claims 1/5 of Swedish FCR-D)