New Energy Risk (NER) and Ascend Analytics, LLC (Ascend) have closed an industry-first energy storage insurance policy, that is set to provide coverage for the performance of Ascend’s battery storage forecasting and bidding optimization platform.
According to the announcement, the policy will enable the financing of a portfolio of grid-scale energy storage facilities in Texas’s ERCOT power market.
From what we understand, the policy will ensure the performance of Ascend’s forecasting and SmartBidder technology stack, in order to provide a revenue floor to the project over a multi-year term.
Unlike alternative revenue risk transfer solutions, the offering secures minimum revenues, and also permits the projects access to upside revenue from lucrative, high-volatility events that are regularly experienced within ERCOT.
It is wise to suggest that this new policy could become a major game changer within the industry, as bringing to the market new energy storage capacity is a necessary element of the energy transition. As a result, it will add flexibility and resilience to the grid to permit the interconnection of more renewable capacity.
Tom Dickson, CEO at NER, commented: “Ascend’s storage valuation has supported a majority of batteries operating in competitive power markets. In addition to SmartBidder’s proven bid optimization capability, Ascend leads the market in their ability to provide the analytics required to assess and actively manage energy storage market risk.
“NER has been able to apply its modeling expertise of highly technical risks to Ascend’s robust framework to implement a precise transfer of risk.”
Gary Dorris, CEO of Ascend Analytics, said: “This offering with NER helps developers confidently deploy capital to support merchant storage operations by providing a revenue floor while preserving the upside potential of ERCOT’s more extreme events. The innovative downside risk coverage enabled the storage developer to earn minimum returns, facilitating asset financing and furthering the transition to reliable clean energy in Texas.”
