Buy-side due diligence on a battery developer

We provided revenue forecasting and market insight for an investor in battery storage in the Netherlands to support the potential acquisition of a project developer.

The background

The client was an infrastructure developer looking to invest in front-of-meter energy storage across European markets.

What the client needed and their key question(s)

The client needed robust revenue forecasts for a range of battery archetypes to challenge sell-side revenue projections and inform their own financial model when valuing the target company.

The client needed to understand the drivers of value for battery storage throughout the period of the energy transition in the Netherlands.

The client also wanted to explore how revenues might change under different, downside market scenarios including lower gas prices and higher competition from other battery storage deployment.

Our solution

LCP Delta provided information based on our in-depth market research to inform our future market scenario for the Netherlands and provided insight to our client on the opportunities in the market.

We used our pan-European power market modelling tools, developed in house, to produce stochastic market forecasts for prices across day-ahead, intraday and imbalance markets against which battery assets optimise their dispatch to maximise revenue.

We used our battery optimisation engine to forecast revenues for different durations of battery assets, accounting for the impact of changes competition and asset degradation. These forecasts were broken down across key revenue streams.

Our impact

We supported our client in challenging sell-side market assumptions and revenue forecasts and provided a robust alternative perspective on the value of the target companies battery portfolio.