One year after the reopening of the call for tenders for secondary reserve capacity:
What is the outcome for batteries in France?
The reopening of the call for tenders for secondary reserve capacity (aFRR – Automatic Frequency Restoration Reserve) to battery energy storage systems (BESS) on 18 June 2024 marks a decisive step for the energy transition in France. This regulatory turning point has considerably changed the investment dynamic, profitability and level of innovation within the storage sector.
The secondary reserve: a new value lever for batteries
Since batteries became eligible to participate in the aFRR market, France has seen rapid growth in installed capacity. By the end of 2024, the country had 1.7 GW of installed battery capacity and approximately 8 GW of additional projects in the pipeline[1]. This momentum now places France among the top three European countries by installed capacity, highlighting the increasing importance of storage in supporting the development of renewable energy on the grid.
The reopening of the call for tenders for secondary reserve capacity has had an immediate and significant impact on profitability: in 2024, the average price on this market reached €66/MW/h, compared with €7/MW/h on the primary reserve market (FCR – Frequency Containment Reserve). For example, a two-hour battery would have generated on average €256,000/MW/year in 2024, compared to €176,000/MW/year in 2023, before the aFRR market opened[2]. This development offers new perspectives to operators, who until then were limited by the saturation of the FCR market or had to rely solely on the capacity mechanism.
The increase in potential revenues is fostering the emergence of many partnerships between developers, energy companies and industrial players, particularly in areas of the grid where volatility creates opportunities for frequency regulation. Both French and international players such as Amarenco, TagEnergy, Harmony Energy, Acacia and Ambos Energy[3] are intensifying their investments in the French market. Additionally, some major industrial sites are installing their own batteries to optimise consumption, provide system services and reduce their energy bill.
European comparison: France, Germany, United Kingdom
France is increasingly converging with the UK and German markets, where battery storage is structured around a wide range of system services and arbitrage opportunities.
- In the United Kingdom, market maturity, a multiplicity of balancing mechanisms (fast frequency response services, arbitrage, Capacity Market) and the stability provided by multi-year contracts offer greater revenue visibility, fostering new investments.
- In Germany, despite the partial saturation of historical markets and intense competition (particularly in the FCR segment), technological innovation remains strong and the installed volume is the highest in continental Europe, supporting the robustness of the sector.
France is now part of this dynamic but must further strengthen its long-term framework to consolidate recent investments and attract new entrants.
European regulation and perspectives
The sector is evolving within a rapidly changing regulatory framework in France, led by the French Energy Regulatory Commission (CRE) and the French transmission system operator (RTE). Recent reforms aim to strengthen technical standards, ease administrative constraints (such as metering and grid connection requirements), and encourage innovation through subsidies and calls for tenders.
European harmonisation - accelerated especially by the Clean Energy Package, the Net Zero Industry Act initiative and critical metals supply strategies – favours the development of flexibility exchanges and could ultimately enhance the profitability of French operators. The growing influence of European strategies on energy independence and securing supply chains is now also shaping the investment framework.
Attractiveness and limits of the business model
This growth trend needs to be qualified: the sector's financial stability remains fragile. The secondary reserve market, based on competitive tenders, exposes operators to high revenue volatility. As with primary reserve, there is a risk of saturation, which could lead to revenue cannibalisation and rapid price erosion, a phenomenon that could worsen with the announced end of symmetrical bidding offers in 2026. Furthermore, the limited capacity of the secondary reserve (1,180 MW) restricts absorption prospects for new projects.
In this uncertain landscape, revenue diversification remains essential: operating in other flexibility markets (such as tertiary reserve, spot market arbitrage, and capacity mechanism), developing hybrid models (batteries paired with renewable assets), or integrating other flexibility tools (load shedding, hydrogen, electric vehicles via vehicle-to-grid (V2G) technology). Revenue stacking remains the key to profitability and resilience for both standalone and hybrid projects until a more stable framework is established.
The capacity mechanism reform, expected in 2026, would be a major step forward, offering enhanced visibility, contractual complementarity, and greater investor confidence.
Conclusion
One year after the reopening of the call for tenders for secondary reserve capacity, the French battery storage market stands at a crossroads. Momentum is clear, driven by innovation and rapid regulatory change, but long-term stability and profitability still depend on revenue diversification and a stronger commitment from public authorities to design sustainable remuneration mechanisms. The establishment of long-term remuneration schemes, reportedly under consideration by RTE, would send a strong signal in favour of investment and firmly anchor battery storage at the core of national energy strategy.
As in the UK and Germany, only an integrated approach - combining technological innovation, diversified business models and regulatory support - will enable France to establish battery storage as a core component of its long-term energy strategy and industrial attractiveness.
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