​Modo Energy's July 2026 Forecast has been released. We have retrained our automatic Frequency Restoration Reserve (aFRR) capacity price models. This captures the repricing that followed Spain's November 2024 move to asymmetrical capacity allocation.

As a result, Spanish standalone battery revenues now start lower than in the April 2026 release.

However, the new trajectory declines more slowly. Jul-26 totals cross above Apr-26 around 2031, supported by continuous intraday trading and aFRR energy activation.

Key takeaways

• aFRR capacity prices are already cannibalising in mid-2026, mainly from renewable portfolios during solar hours. Average upward capacity prices peak at ~€9/MW/h in 2026 H1, down from ~€26/MW/h in 2024.
• aFRR energy shows no cannibalisation yet. Downward activation spreads have held €20 to €40/MWh below day-ahead since 2023, keeping real-time value in the stack.
• The medium term improves: Jul-26 total revenues end ~15 k€/MW/year higher than Apr-26 by 2040.

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Why did we retrain the aFRR models?

On November 2024, the Spanish market moved to asymmetrical aFRR capacity allocation. Market participants can now bid their flexibility in one direction only, rather than as a symmetrical band.

Our previous models were trained on a longer window, incorporating data previews to the November 2024 change. As data availability was an issue, the model's training period included data from the old regime.

That window mixed pre-reform and post-reform regimes. The July release trains only on post-reform data, from November 2024 to May 2026. Removing the old regime improves aFRR capacity price forecasting.

The chart shows the repricing clearly. Average upward capacity prices peaked at ~€26/MW/h in 2024, ~€13/MW/h in 2025, and ~€9/MW/h in the first half of 2026. Our 2030 forecast continues the trend, with peaks below €5/MW/h.

Notably, cannibalisation is already happening in mid-2026 despite Spain's low battery penetration. Renewable portfolios are driving it. The effect is clearest during solar hours, when prices flatten across the middle of the day. Batteries entering the market will accelerate this compression.

​The arbitrage opportunity in aFRR Energy is not shrinking yet

In the Spanish market, the same pressure does not appear in aFRR energy activation. This service reflects the opportunity cost of real-time changes to scheduled production. Consequently, it consistently prices at a spread to the day-ahead market.