Last week at the Energy Storage Summit, our CEO, Sahand, joined five industry leaders on a panel to tackle this key question.
Merchant revenues now represent a prominent part of the battery revenue stack, and the conversations at the conference reflected a growing appetite for higher merchant exposure. From financiers to operators, the message was clear – more stakeholders across the BESS project lifecycle are leaning into merchant risk, not away from it.
On the panel, Sahand spoke about the importance of using advanced data science models to trade batteries more effectively in volatile markets like the NEM. He also shared OptiGrid’s perspective on how a robust battery optimiser can help developers and operators manage risks while maximising returns. In a landscape where predictability is limited and timing is critical, having the right optimisation tools and strategies is essential.
Beyond the panel, the conference featured many insightful discussions, but a few themes stood out:
As the sector matures, more sophisticated financial arrangements are emerging – not just to monetise storage, but to better align incentives and manage exposure.
There’s growing industry-wide recognition that battery optimisation is about more than just some smart algorithms. A highlight was hearing bankers talk about how different optimisers achieve varying levels of “Percentage of Perfect” revenue capture and how that significantly impacts battery returns. It’s encouraging to see this level of optimisation detail making its way into investment conversations.
Although it wasn’t always the formal topic, price volatility came up in almost every session – from bankers to developers, operators to asset managers. The recurring narrative was simple:
more volatility means more opportunity for batteries.
While that’s partially true, we believe an important part of the story is often left out. Volatility is a double-edged sword. For example, intraday wholesale price volatility can lead to wider spreads and more extreme pricing events. But it also brings greater unpredictability and with that, more difficulty in consistently achieving a high “Percentage of Perfect” from battery operations.
Many in the industry seem to conflate “price volatility” with “price spreads” – or simply with more opportunities for batteries. While that can be true, higher volatility reduces the predictability of wholesale prices, which in turn makes revenue capture more challenging and increases the risk of missing significant revenue opportunities.
Beyond missed upside, volatility can also introduce downside risk when using storage to defend caps or hedge positions. In these cases, unpredictability doesn’t just erode returns, it can lead to real losses. With more volatility, capturing upside gets harder, and so does managing risk. The path to a reliable “Percentage of Perfect” gets murkier, not clearer.
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