Monthly BESS revenues and market trends, Q1 2026

Portfolio performance in the context of market developments

Q1 2026 showed a two-phase market dynamic for German BESS revenues:

• January–February: compressed revenues driven by weak spreads and subdued ancillary prices
• March: strong rebound driven primarily by balancing capacity markets, supported by improved wholesale spreads

Across the quarter, portfolio performance was back-loaded, with March accounting for a disproportionate share of value creation. Both duration classes (0.9–1.5h and 1.51–2.5h) benefited from this recovery: The 1.51–2.5h portfolio maintained higher absolute revenue levels, while the 0.9–1.5h portfolio exhibited stronger relative growth during the rebound phase.

Methodological update for portfolio performance

To provide a portfolio performance view that is neutral to asset availability, we have introduced methodological updates. Firstly, it applies a data-quality filter to exclude days where an asset was not operational for more than four hours. As a result, revenues from wholesale, aFRR, and FCR on these partial-availability days are removed, which can lead to slightly lower total revenues. However, the same filtering is also applied to the calculation of average marketable power (MW) and energy (MWh), meaning that averages are computed only on fully operational days. This creates a more representative performance metric.

Secondly, duration clustering has been refined. The 2h segment is now defined as 1.51-2.5h rather than extending to 3.5h. This change was requested by asset owners and market participants to create a cleaner benchmark that more closely represents a true 2h asset. The cluster description now also focuses on P10/P90 ranges rather than minimum/maximum values, reducing the influence of outliers.

However, when adjusting for these composition effects, the underlying performance remained nearly identical, confirming that the new methodology improves consistency and robustness rather than materially changing economic outcomes.

Key month-on-month indicators

Wholesale markets

Wholesale conditions were weak in early Q1 and improved toward March. Day-ahead prices rose to ~EUR 106/MWh in March (from ~EUR 95/MWh in February). Intraday markets followed similar trends, with VWAP and auction prices increasing by ~12–15%. The day-ahead spread increased by ~54% from February to March, confirming that February was characterized by compressed volatility and limited arbitrage windows, while March saw a reopening of intraday dislocations, enabling higher monetization.

Ancillary services and balancing markets

The main driver of Q1 performance recovery was the balancing complex:

• aFRR capacity revenues increased by +156.7% MoM in March
• aFRR energy revenues increased more moderately in March (+2.9%)
• FCR capacity prices also strengthened significantly

This indicates that the revenue uplift was driven primarily by capacity pricing, not activation volumes. Market conditions reflected system tightness and reduced flexibility supply. From a quarterly perspective, January - February exhibited market conditions that reflected system tightness and reduced flexibility supply, while March had structurally stronger capacity market conditions.

Extreme price events and special days

Q1 displayed a clear shift in revenue distribution. In February, performance was was highly uneven, with peak daily revenues at ~EUR 4.5k/MW. March featured a consistently strong revenue environment, with all days above ~EUR 4k/MW and a peak day with ~EUR 9.3k/MW. This reflects increased frequency of monetizable events and a transition from sporadic spikes to a sustained high-revenue regime. Importantly, March revenues were not driven by isolated events but by a combination of strong reserve prices and recurring intraday opportunities.

Fundamentals: renewables and load

Key structural drivers across Q1:

• Solar: strong increase into March (+167% vs. February)
• Wind: significant decline (-5%)
• Load: decreased (~-11.4%)

This created a favorable setup for BESS:

• Lower wind → tighter system conditions → higher reserve prices
• Higher solar → deeper midday price dips → stronger arbitrage potential
• Combined effect → increased volatility and value stacking opportunities

Outlook

Looking ahead to the rest of March and early April, the key question is whether the stronger reserve-price regime persists once solar volumes increase further and weather normalizes. If wind remains relatively subdued, capacity products can stay supportive and preserve much of the recent uplift in BESS revenues.

At the same time, continued solar buildout should keep reinforcing the classic spring battery pattern of softer midday prices and steeper evening ramps. That would remain constructive for arbitrage, but the balance between wholesale and reserve revenues may continue to rotate day by day. For clients, the main implication is that March marks a meaningful improvement from February rather than a temporary single-day spike, with both duration classes again showing strong monetization potential in Germany.