LevelTen's Q4 European Storage and Hybrid Pricing Market Transparency Report
In today’s volatile European energy market, understanding the complexities of battery energy storage system (BESS) and hybrid project pricing is crucial. The Q4 European Storage and Hybrid Pricing Market Transparency Report builds on our previous BESS reports and expands into the four most common structures for hybrid projects emerging in the market based on LevelTen Energy’s European-wide market mapping exercise.
After extensive analysis, interviews, and conducting RFPs & Auctions for hybrid projects, the report focuses on the below hybrid structures that we conclude will ultimately drive the market forward.
- Stand-Alone Tolling: This is currently the market's preferred option, likely driven by its simplicity for developers and favorable perception among financing entities.
- Green BESS: Fixed shape PPA with a fixed price. Seller commits to deliver a specific shape that captures a better price than the as-produced profile from the renewable asset. While Green BESS’ capture price is logically better than Solar PV, its potential is somewhat limited by the restriction of charging only from the associated renewable energy asset.
- TBx: Top-Bottom virtual agreement where the buyer pays a fixed price for the floating (highest) spread of 2, 4, or ‘x’ hours assuming charging at lowest prices and discharging at highest. TBx prices are highly dependent on settlement location, which defines the capture spread, and battery duration, which defines the energy volume for settlement.
- Custom Shape and 7x16: Shape is based on the number of days and hours for which settlement is calculated with 7x16 being a common structure in many markets. This option’s LPP (Levelized PPA Price) and PSV (Project Settlement Value) are heavily driven by the shape offered. Generally, custom shapes command the highest price among the four products as they allow for the most flexible energy shifting
The market, driven by negative pricing and cannibalization, has indicated a clear need to rapidly expand traditional renewable energy development to include storage and hybrid components. Our most recent Q4 European Storage and Hybrid Pricing Market Transparency Report provides the most up to date analysis to inform both pricing and procurement strategies across mainland Europe.
Germany and Spain are the most active markets, accounting for 24 offers (62% of the sample). The lower sample size for other countries confirms that the storage and hybrid PPA market is still immature, but quickly developing in other geographies.
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