The new whitepaper is dubbed 'Tolls, floors and merchant models: Do higher risks mean higher returns for battery storage investors?' Image: GridBeyond.
The new whitepaper is dubbed ‘Tolls, floors and merchant models: Do higher risks mean higher returns for battery storage investors?’ Image: GridBeyond.

GridBeyond has released a new whitepaper indicating that investors are progressively embracing the potential of battery storage assets while strategically managing associated risks.

The Tolls, floors and merchant models: Do higher risks mean higher returns for battery storage investors? whitepaper indicates that the battery market is seeing various changes impacting investors. This includes the complexities of tolls, floors and merchant models.

The organisation has discovered that tolling arrangements and floor prices provide stable income, while the merchant model, which links revenue to market prices, introduces an exciting element of risk and the possibility of even greater returns.

As stakeholders acquire a more profound comprehension of the risk-return dynamics intrinsic to the battery storage sector, a more well-balanced and informed investment landscape is gradually taking shape, GridBeyond argues. This is indicative of a maturing industry in which investors are better able to assess potential risks and returns.

As battery storage technology continues to evolve and improve, it is essential for investors to have a firm grasp of the industry’s underlying risk profile to make optimal investment decisions.

The whitepaper outlines that there are numerous financing options available for battery storage assets, including the tolling model, merchant model and trading opportunities like Frequency Response Services, Capacity Market and Balancing Mechanism and wholesale market trading.

High energy prices, capacity market auctions, new frequency response products, local flexibility tenders and pathfinder projects have also further increased investor appetite for energy storage technologies, the organisation said.

Scott Berrie, asset development director at GridBeyond commented: “Storage assets are a great opportunities for businesses which can increase their revenues according to their strategy and objectives while moving towards net zero goals AI, together with a suite of trading services, allow businesses to generate revenues allowing full access-to-market and to the most lucrative balancing services.”

GridBeyond discusses battery storage returns in exclusive webinar

On 24 January, Solar Power Portal’s sister publication hosted an exclusive webinar with GridBeyond discussing the contents of the whitepaper and the overarching theme of whether higher risks mean higher returns for battery storage investors.

GridBeyond’s Berrie was joined by Charles Pearce, head of commercial products at Zenobe Energy and Henry Easterbrook, CEO at Fig Power, to navigate the topic.

Various aspects of battery storage investment strategies featured throughout the webinar include key considerations for securing financing and investment for BESS assets, trends in price floors and insurance products, commercial perspectives around operating and optimising battery storage assets and the importance of market forecasting, revenue stacking, dispatch optimisation, and auction bidding strategies in ensuring that battery storage assets achieve their full value potential.