AleaSoft Energy Forecasting, June 19, 2026. Renewable energy growth, volatility and the increasing frequency of low, zero or negative prices are transforming energy management. Competitive advantage no longer lies solely in procuring renewable energy, but in having access to flexible and optimised energy. Batteries and hybrid PPA help reduce risks, improve the profile of the energy supplied and create more competitive products.
A market in which flexibility is becoming increasingly valuable
The growing penetration of renewable energy is changing the hourly structure of electricity prices. The concentration of photovoltaic generation during the middle of the day is increasing the frequency of low, zero or negative prices, while prices during other periods may be considerably higher.
These hourly price differentials pose challenges, but also create opportunities. The ability to decide when to buy, store, sell or supply energy is becoming a competitive advantage.
Batteries make it possible to transform variable renewable generation into energy that is more manageable, flexible and better suited both to the needs of the electricity system and to consumption profiles.
Storage to manage risks and improve energy supply
For an energy supplier, access to energy storage capacity, whether through owned assets, optimisation agreements or contracts with hybrid plants, can help manage and reduce exposure to the spot market and enable the design of more competitive products.
Batteries can be charged during lower-priced hours and discharged when prices are higher. This time‑shifting capability makes it possible to take advantage of hourly price differentials and can help reduce the average cost of purchasing energy.
Storage also facilitates risk management for portfolios that may combine indexed contracts, fixed‑price contracts and partial hedging. An energy supplier with access to flexible assets has more tools available to correct mismatches between contracted energy, forecast demand and actual market developments.
This flexibility can help limit the impact of high-price periods, reduce imbalances and improve hedging strategies.
For generators, utilities and independent power producers (IPPs), storage makes it possible to increase the value of generation and reduce exposure to cannibalisation, curtailment and negative prices. For traders, demand aggregators, market representatives and control centres, it opens up new possibilities for arbitrage, portfolio management and participation in balancing markets. For transmission system operators (TSOs) and distribution system operators (DSOs), batteries can provide flexibility, contribute to system balancing and facilitate congestion management and renewable energy integration.
More competitive products for industrial and large consumers
Batteries make it possible to develop more stable supply products with a higher share of renewable energy.
For industrial and energy-intensive consumers, data centers and other large consumers, the cost of electricity does not depend solely on the average market price. It is also influenced by the hourly consumption profile, exposure to high-price periods and the ability to adapt demand to system conditions.
An energy supplier that combines renewable energy, storage, forecasting and active management can offer solutions that are better tailored to each customer’s needs. These solutions may include products with price bands, partial hedging, renewable energy supply adapted to consumption or arrangements incorporating flexibility and demand management.
In this way, the energy supplier evolves from a supply‑focused model towards a broader role as the customer’s energy manager.
Access to flexible renewable energy is also relevant for renewable fuel production projects, such as green hydrogen, methanol and ammonia, whose costs depend to a large extent on the price and hourly profile of electricity.
Hybrid PPA: a more valuable delivery profile
PPA associated with photovoltaic plants enable the energy generated by these facilities to be contracted over the long term, but their output is concentrated during daylight hours. As installed photovoltaic capacity increases, these hours tend to experience lower prices and greater exposure to cannibalisation.
The difference between the plant’s generation profile and customers’ consumption profiles can create risks for both the producer and the energy supplier.
The incorporation of batteries makes it possible to shift part of the photovoltaic generation to periods of higher demand and greater market value.
Compared with a conventional photovoltaic PPA, a hybrid PPA can reduce the concentration of deliveries during lower‑priced daylight hours, improve the delivery profile, help reduce curtailment and offer a contractual structure that is more closely aligned with the buyer’s actual needs.
Greater operational flexibility also facilitates contractual structures with delivery blocks, hourly profiles or specified levels of firmness. For renewable energy generators and project developers, an improved revenue profile and reduced exposure to low-price hours can strengthen bankability and facilitate access to financing.
New sources of value
The value of batteries is not limited to arbitrage between low- and high‑price hours. Depending on the regulatory framework and the technical characteristics of the asset, storage can participate in intraday markets, balancing markets, balancing services and other flexibility mechanisms.
Capacity mechanisms also provide an additional source of revenue linked to the availability of firm capacity at critical times for the system.
Combining these markets makes it possible to develop multi‑market optimisation strategies. However, simultaneous participation in different services increases operational complexity. Every charging or discharging decision has an opportunity cost and affects the energy available for subsequent hours.
Profitability therefore depends not only on having a battery, but also on the strategy used to allocate its capacity to the highest‑value opportunities.
Forecasting as the basis for optimisation
The management of batteries and hybrid PPA requires reliable forecasts of prices, demand and renewable energy generation.
In the short term, these forecasts are necessary to determine bids, anticipate consumption and optimise charging and discharging cycles. Forecasting errors can result in imbalance costs, missed arbitrage opportunities or inefficient use of storage.
In the long term, forecasts are essential for valuing contracts, sizing batteries and estimating revenues. Analyses must take into account the future growth of renewable energy, price cannibalisation, the expansion of storage, changes in demand profiles and the evolution of balancing markets.
For developers, investment funds and banks, these analyses provide an essential basis for assessing project viability, risks and financing.
Average prices or historical spreads alone cannot adequately represent this complexity. Hourly simulations, multiple scenarios and models capable of reproducing the technical and operational constraints of the assets are required.
From procuring renewable energy to procuring flexibility
In the new energy landscape, the challenge will not simply be to procure renewable energy, but to secure energy that is flexible, manageable and optimised.
Batteries and hybrid PPA will make it possible to align generation more closely with consumption, reduce exposure to volatility and develop more competitive products.
The energy transition requires more than additional renewable capacity. It also requires storage, flexibility, high‑quality forecasting and increasingly sophisticated risk management.
AleaStorage services to maximise the value of storage
Through AleaStorage, AleaSoft Energy Forecasting provides tools to size, value and define operational strategies for energy storage systems. These services include long‑term revenue estimates for different configurations, covering both hybrid solar photovoltaic and battery systems and stand‑alone installations. The analysis compares different storage durations and operating modes and includes forecasts of revenue from arbitrage in the day‑ahead and intraday markets, balancing services and potential revenue from capacity mechanisms.
Future hourly price simulations and optimisation algorithms make it possible to tailor each study to the technical and economic characteristics of the project and identify strategies aimed at maximising revenue, improving the internal rate of return (IRR) and reducing exposure to market risks.
Source: AleaSoft Energy Forecasting.
