German battery storage economics improved in September 2026, according to a suena energy simulation for a representative 10 MW/20 MWh standalone battery in Germany. Cross-market optimization generated EUR 25.5k/MW/month gross, slightly above August's EUR 25.3k and 22% above the stacked wholesale benchmark.

Where the revenue came from

Continuous intraday revenue rose 36% month on month to EUR 17.5k/MW/month. Day-ahead and intraday auctions reached EUR 13.8k and EUR 13.2k/MW/month respectively, while the stacked wholesale strategy yielded EUR 20.9k/MW/month.

The composition is telling: the largest single contribution came from continuous intraday trading, meaning the value of a German battery is increasingly concentrated in short-term flexibility rather than in day-ahead spread capture alone. Assets capable of optimising across markets captured materially more than those running a single strategy.

Prices and spreads widened sharply

German day-ahead prices averaged EUR 144.80/MWh, about EUR 18/MWh above August and more than 50% higher than September 2025. The top-base spread for a two-hour battery was about EUR 220/MWh, the widest since 2022. Positive aFRR revenue rose 50% to EUR 8.4k/MW/month.

A two-hour spread of roughly EUR 220/MWh — the widest in four years — is the kind of price signal that justifies merchant battery business cases without direct subsidy.

Supply side keeps growing

The revenue recovery coincides with continued expansion of German grid-scale capacity. Kyon Energy announced on 28 October 2026 that its Alfeld BESS in Lower Saxony, at 137.5 MW/282 MWh, has been commissioned and is operational, potentially making it the largest German project to reach this stage. The asset is owned by Danish investor Scale Fund and connected to Avacon's 110 kV substation; its capacity could supply about one million households for one hour.

Alfeld earns revenue primarily from balancing services and spot market optimisation, without direct subsidies, and was energised via the 110 kV connection in January 2026. Kyon, owned by TotalEnergies, reports more than 800 MW under implementation, more than 1.7 GW of approved ready-to-build projects and a portfolio exceeding 7 GW.

The tension for the German market is clear: wider spreads support merchant revenues, but each new commissioned system compresses the very volatility that generates those spreads. September's numbers favour operators with cross-market optimisation capability; they do not guarantee the same result once a larger fleet is competing for the same flexibility windows.

Source: Metal.com (news.metal.com)

This article was assisted by AI analysis. Please refer to the original source for official information.