Germany’s aFRR capacity market remains dominated by hydro, but 2025 marks a shift as the first solar assets have been prequalified and battery storage capacity is rapidly gaining ground. Although wind and solar still make up less than 1% of the prequalified capacity, the growing presence of BESS and the clear revenue potential for renewables in ancillary services are expected to reshape the landscape.
As of March 2025, hydro accounts for around 17 GW of the total 25 GW of prequalified capacity. Wind assets remain limited, with only about 90 MW prequalified, and the first solar assets entered the market only in November 2025. In contrast, BESS capacity is expanding quickly, growing from nearly 0 MW prequalified in early 2022 to 550 MW in March 2025, with further acceleration expected.
For solar, participating in the aFRR market can deliver a meaningful uplift over Day-ahead revenues, as Pexapark analysis shows. When bidding 25% of the minimum expected generation in a four-hour block in the capacity auctions, solar assets in Germany could have captured an additional 6% in revenues so far in 2025 by offering downward capacity during solar production hours. Including additional revenue from upward capacity raises the total uplift to approximately 7%: For example, during periods of negative pricing, the opportunity costs of withholding capacity for upward aFFR can be very low.
Most of the value lies in downward aFRR capacity, with strong pricing during peak solar hours. Between 12:00 and 16:00 in 2025, average downward aFRR capacity prices reached 48.4 EUR/MW/h, far above the 1.9 EUR/MW/h to 25.4 EUR/MW/h range seen in other blocks. By comparison, midday upward aFRR capacity prices were much lower at 18.4 EUR/MW/h, while morning and evening blocks saw higher upward prices of around 30 EUR/MW/h (see graph below).
This price pattern reflects the limited availability of dispatchable generation during midday hours, when solar production is highest. With few dispatchable units available to reduce output, downward capacity prices rise. However, these dispatchable units can still offer upward capacity, which explains the relatively lower pricing. Seasonal effects are also important: the bulk of revenue opportunities for solar assets occur between May and September, with little to no uplift available during the winter months. May was particularly favourable for upward capacity revenues, supported by the highest monthly number of negative price periods.
Wind assets also benefit from aFRR participation, although the uplift is smaller in relative terms. Offering 40% of minimum expected generation over a four-hour block in 2025 could yield an uplift of about 3 percent. This lower figure is driven by wind’s already higher Day-ahead revenues in Germany. The higher share of capacity assumed is based on the fact that the wind production profile is less pronounced to short-term swings in generation as solar, as cloud coverage can cause comparatively high variances in solar generation.
However, the revenue potential seen in 2025 may not last. As more solar capacity enters ancillary markets and BESS volumes continue to grow, competition is expected to reduce aFRR capacity prices, particularly during midday, when solar currently sees the greatest gains. This cannibalisation effect could limit future value for new entrants.
Average aFRR up- and downward capacity price per block in 2025 ytd in EUR/MW/h.
(Source: Pexapark analyis, based on www.regelleistung-online.de)
This article is just one of many expert updates available on Pexapark’s market intelligence platform.
Our market experts frequently share sharp, data-led perspectives on the trends reshaping renewables. To read more, register with Pexapark today for your free month access.