Battery energy storage assets (BESS) are today monetised on markets that are overwhelmingly merchant: ancillary services, arbitrage and capacity. Their volatility is a genuine brake on investment: it widens the dispersion of expected revenues and makes financing harder to close.
Contractual offerings are diversifying in response. Beyond the conventional profit sharing structure, where the investor remains fully exposed, tolls and floors transfer all or part of the revenue risk to the aggregator, in exchange for a lower expected return. The trade-off is therefore no longer a binary choice between fully merchant and fully secured: it plays out along a continuum of options.
Choosing within that continuum nonetheless remains difficult, for three compounding reasons: quoted levels are comparable neither across assets, nor across offers for a single asset, and the optimal trade-off ultimately depends on each investor’s own profile, namely its risk tolerance, its leverage and its market view.
It is precisely these challenges that we can address, in partthrough our proprietary PRISM model, allowing to quantify tradeoffs associated with accepting one contract rather than another, and to decide with full visibility.
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