Enabling BESS Portfolio Growth for New Market Entrants with AEX Asset Sales

Enabling BESS Portfolio Growth for New Market Entrants with AEX Asset Sales

Golden State Renewable Energy (“GSR-E”), a California-based energy storage project developer, expanded its development capabilities to originate and develop Distributed Generation Resource (“DGR”) standalone battery energy storage system (“BESS”) projects in Texas. After successfully developing multiple DGR BESS projects in the highly lucrative Houston zone, GSR-E wanted to quickly engage with qualified buyers so it could recycle its capital profitably while meeting stringent utility interconnection timelines.

With over 20 years of delivering the analytics to power the energy transition throughout ERCOT, Ascend Analytics emerged as the clear partner. The Ascend Energy Exchange (AEX), the leading M&A advisory service and clean energy asset exchange platform, enabled GSR-E to sign deals with three aligned buyers, ensuring the profitable transactions of BESS projects.

Situation

GSR-E Seeks Quality Buyers through ERCOT Market Expertise

GSR-E, a pure play development shop, found itself at a critical juncture in 2022 when the team decided to sell their Texas BESS portfolio. If GSR-E could quickly locate quality buyers and sell these development assets at a premium, it could prove the success of the Texas expansion strategy and use the proceeds to accelerate the development of additional renewable energy and/or BESS projects. GSR-E already possessed vast experience as a market leader in behind-the-meter energy storage development in California. From 2016 to 2019, GSR deployed more energy storage projects than any other North American company (98 behind-the-meter energy storage projects of nearly 80 MW and 370 MWh installed capacity).  

Now needing to appropriately model and understand ERCOT market economics, Mark Tholke, GSR-E’s Managing Principal and former Vice President of EDF Renewable Energy’s West Region, realized a strong alignment between Ascend’s subject matter expertise and diverse buyer network and GSR-E’s needs.

Solution

AEX Provides Deep Bench of Potential Buyers and Asset Valuation Capabilities

Ascend’s expertise in valuating renewable energy and BESS projects and modeling ERCOT market dynamics for the past 20 years made AEX a natural solution for GSR-E. In total, Ascend has supported 50 GW of merchant finance and conducted $7.2 Billion in independent economic assessments for renewable and storage assets in North America and Europe. In its resource planning work, Ascend has also consulted over 300 GW in Integrated Resource Planning (IRP), including for some of Texas’s largest public utilities, further deepening Ascend’s understanding of market dynamics, valuations, and stakeholders.

By supporting customers in ERCOT from real-time battery optimization to 30-year resource planning, Ascend delivered the market expertise needed to identify and vet buyers for GSR-E. AEX’s full-service platform provided the following:

  • Highly Qualified Marketplace: GSR-E could market its energy storage projects to a wide pool of qualified prospective buyers through Ascend’s relationships with a large, diverse network of buyers, including new global entrants.
  • Ascend Project Valuation and Modeling: Built off decades of experience and modeling, the AEX team diligently vets assets for revenue value, risk, and market potential through Ascend’s flagship software,  PowerVAL/BatterySIMM.
  • Customization to Buyer and Seller Needs: AEX facilitates large auctions, small/focused auctions, or bilateral transactions, all tailored to the customer’s needs through alignment criteria that assess the proposed operational plans and preferences of the prospective bidders. AEX creates an evaluation matrix for each company and its bid, culminating in a ‘short list’ of potential buyers.  
  • Limited Merchant Risk Exposure: When available, assets can be offered with an Ascend EnSurance revenue contract, creating a unique value proposition for buyers looking to limit merchant risk exposure.
  • Complete End-to-End Solution: AEX covers all administrative tasks to ensure efficiency, including data room management, buyer education, Q&A management, daily bidder engagement, and marketing strategies from launch through MIPA execution.

Given the rising energy price volatility in ERCOT, GSR-E needed a solution that accurately modeled the changing economics of asset valuation in the energy transition. Ascend backs its asset revenue and risk forecasting with Ascend Market Intelligence’s Opportunity Cost Forecasting Framework, which reflects the new price-setting behaviors of incoming renewables and storage. AEX emerged as the partner who would model uncertainty, calibrate volatility against historical dynamics, and forecast volatility based on weather, policy evolution, offtake demand, cost of land, and long-run equilibrium.

“Throughout the transaction process, AEX quickly delivered a vetted and diverse list of buyers that were proven operators of clean energy assets,” said Mr. Tholke. “Ascend backed its deep buyer bench with 20+ years of subject matter expertise in the energy sector and evaluated alignment from technical and operational perspectives.”

Results

GSR-E Closes with Three Aligned Buyers to Profitably Operate in Texas

Backed by AEX, GSR-E connected with three aligned buyers and confidently moved forward to exclusive negotiations after Ascend’s advanced modeling and due diligence proved the fit. The first deal of up to 6 x 9.9 MW projects closed with Agilitas Energy, a prominent energy storage leader in the Northeast. The transaction served as crucial momentum for its strategic entry into the ERCOT market and ensured fast operational returns in developing its renewable portfolio beyond solar.

The second transaction identified a buyer for two BESS projects totaling 15 MW that GSR-E was developing on behalf of a 3rd party owner. AEX matched GSR-E to Vopak, a Netherlands-based global storage and infrastructure solutions provider that has entered the U.S. storage market and expanded its energy transition offerings. Vopak owns and operates its BESS facilities.

For the last 9.9 MW project in the portfolio, AEX partnered GSR-E with a well-established national developer of solar PV and BESS who also sought to expand its energy storage footprint in Texas. The parties closed this third sale in April 2024.  

“AEX successfully facilitated multiple transactions with high-quality buyers, either through a large-outreach auction or via a streamlined bilaterial processes,” said Rahm Orenstein, Managing Director of AEX. “We offer our customers a customized solution, optimizing between the desire to maximize buyer outreach and speed.”  

Next Opportunities

Leveraging AEX to Navigate and Capitalize on Changing Market Dynamics in ERCOT  

As the energy landscape continues to evolve, Ascend expects the expansion of solar and wind to play a pivotal role in alleviating scarcity conditions in Texas. Ongoing renewable buildout will only intensify the economic pressure on thermal generation to retire, and GSR-E’s trio of successful transactions proves that high returns and robust project economics persist for BESS developments in the ERCOT market. Battery storage adeptly addresses surging peak demand while seamlessly integrating the influx of intermittent renewable energy.  

For buyers and sellers interested in storage assets, ERCOT attracts compelling opportunities with some of the fastest development timelines among ISOs. Yet, the gap between market opportunities and target project COD remains significant. Evident in AEX’s partnership with GSR-E, an efficient transaction process, paired with high quality, aligned buyer networks, can bridge this gap. Ascend’s thorough market analysis, deep buyer bench, and neutral valuations reduce friction, curating a streamlined transaction process best suited to innovate alongside ERCOT’s changing energy needs.  

Ascend Analytics actively covers the entire U.S. energy market, delivering the same AEX benefits across all ISOs ripe for BESS asset transactions, whether standalone or coupled with renewable energy generation.  

Interested in Partnering with the Ascend Energy Exchange?

The Ascend Energy Exchange™ (AEX) , an M&A advisory service utilizing a marketplace for renewable and storage projects, significantly reduces transaction costs and improves transaction outcomes by streamlining processes and facilitating a uniquely competitive process for clean energy procurement and project sales.  Contact us today to learn more.

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Enabling BESS Portfolio Growth for New Market Entrants with AEX Asset Sales

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Case Studies

Golden State Renewable Energy (“GSR-E”), a California-based energy storage project developer, expanded its development capabilities to originate and develop Distributed Generation Resource (“DGR”) standalone battery energy storage system (“BESS”) projects in Texas. After successfully developing multiple DGR BESS projects in the highly lucrative Houston zone, GSR-E wanted to quickly engage with qualified buyers so it could recycle its capital profitably while meeting stringent utility interconnection timelines.

With over 20 years of delivering the analytics to power the energy transition throughout ERCOT, Ascend Analytics emerged as the clear partner. The Ascend Energy Exchange (AEX), the leading M&A advisory service and clean energy asset exchange platform, enabled GSR-E to sign deals with three aligned buyers, ensuring the profitable transactions of BESS projects.

Situation

GSR-E Seeks Quality Buyers through ERCOT Market Expertise

GSR-E, a pure play development shop, found itself at a critical juncture in 2022 when the team decided to sell their Texas BESS portfolio. If GSR-E could quickly locate quality buyers and sell these development assets at a premium, it could prove the success of the Texas expansion strategy and use the proceeds to accelerate the development of additional renewable energy and/or BESS projects. GSR-E already possessed vast experience as a market leader in behind-the-meter energy storage development in California. From 2016 to 2019, GSR deployed more energy storage projects than any other North American company (98 behind-the-meter energy storage projects of nearly 80 MW and 370 MWh installed capacity).  

Now needing to appropriately model and understand ERCOT market economics, Mark Tholke, GSR-E’s Managing Principal and former Vice President of EDF Renewable Energy’s West Region, realized a strong alignment between Ascend’s subject matter expertise and diverse buyer network and GSR-E’s needs.

Solution

AEX Provides Deep Bench of Potential Buyers and Asset Valuation Capabilities

Ascend’s expertise in valuating renewable energy and BESS projects and modeling ERCOT market dynamics for the past 20 years made AEX a natural solution for GSR-E. In total, Ascend has supported 50 GW of merchant finance and conducted $7.2 Billion in independent economic assessments for renewable and storage assets in North America and Europe. In its resource planning work, Ascend has also consulted over 300 GW in Integrated Resource Planning (IRP), including for some of Texas’s largest public utilities, further deepening Ascend’s understanding of market dynamics, valuations, and stakeholders.

By supporting customers in ERCOT from real-time battery optimization to 30-year resource planning, Ascend delivered the market expertise needed to identify and vet buyers for GSR-E. AEX’s full-service platform provided the following:

  • Highly Qualified Marketplace: GSR-E could market its energy storage projects to a wide pool of qualified prospective buyers through Ascend’s relationships with a large, diverse network of buyers, including new global entrants.
  • Ascend Project Valuation and Modeling: Built off decades of experience and modeling, the AEX team diligently vets assets for revenue value, risk, and market potential through Ascend’s flagship software,  PowerVAL/BatterySIMM.
  • Customization to Buyer and Seller Needs: AEX facilitates large auctions, small/focused auctions, or bilateral transactions, all tailored to the customer’s needs through alignment criteria that assess the proposed operational plans and preferences of the prospective bidders. AEX creates an evaluation matrix for each company and its bid, culminating in a ‘short list’ of potential buyers.  
  • Limited Merchant Risk Exposure: When available, assets can be offered with an Ascend EnSurance revenue contract, creating a unique value proposition for buyers looking to limit merchant risk exposure.
  • Complete End-to-End Solution: AEX covers all administrative tasks to ensure efficiency, including data room management, buyer education, Q&A management, daily bidder engagement, and marketing strategies from launch through MIPA execution.

Given the rising energy price volatility in ERCOT, GSR-E needed a solution that accurately modeled the changing economics of asset valuation in the energy transition. Ascend backs its asset revenue and risk forecasting with Ascend Market Intelligence’s Opportunity Cost Forecasting Framework, which reflects the new price-setting behaviors of incoming renewables and storage. AEX emerged as the partner who would model uncertainty, calibrate volatility against historical dynamics, and forecast volatility based on weather, policy evolution, offtake demand, cost of land, and long-run equilibrium.

“Throughout the transaction process, AEX quickly delivered a vetted and diverse list of buyers that were proven operators of clean energy assets,” said Mr. Tholke. “Ascend backed its deep buyer bench with 20+ years of subject matter expertise in the energy sector and evaluated alignment from technical and operational perspectives.”

Results

GSR-E Closes with Three Aligned Buyers to Profitably Operate in Texas

Backed by AEX, GSR-E connected with three aligned buyers and confidently moved forward to exclusive negotiations after Ascend’s advanced modeling and due diligence proved the fit. The first deal of up to 6 x 9.9 MW projects closed with Agilitas Energy, a prominent energy storage leader in the Northeast. The transaction served as crucial momentum for its strategic entry into the ERCOT market and ensured fast operational returns in developing its renewable portfolio beyond solar.

The second transaction identified a buyer for two BESS projects totaling 15 MW that GSR-E was developing on behalf of a 3rd party owner. AEX matched GSR-E to Vopak, a Netherlands-based global storage and infrastructure solutions provider that has entered the U.S. storage market and expanded its energy transition offerings. Vopak owns and operates its BESS facilities.

For the last 9.9 MW project in the portfolio, AEX partnered GSR-E with a well-established national developer of solar PV and BESS who also sought to expand its energy storage footprint in Texas. The parties closed this third sale in April 2024.  

“AEX successfully facilitated multiple transactions with high-quality buyers, either through a large-outreach auction or via a streamlined bilaterial processes,” said Rahm Orenstein, Managing Director of AEX. “We offer our customers a customized solution, optimizing between the desire to maximize buyer outreach and speed.”  

Next Opportunities

Leveraging AEX to Navigate and Capitalize on Changing Market Dynamics in ERCOT  

As the energy landscape continues to evolve, Ascend expects the expansion of solar and wind to play a pivotal role in alleviating scarcity conditions in Texas. Ongoing renewable buildout will only intensify the economic pressure on thermal generation to retire, and GSR-E’s trio of successful transactions proves that high returns and robust project economics persist for BESS developments in the ERCOT market. Battery storage adeptly addresses surging peak demand while seamlessly integrating the influx of intermittent renewable energy.  

For buyers and sellers interested in storage assets, ERCOT attracts compelling opportunities with some of the fastest development timelines among ISOs. Yet, the gap between market opportunities and target project COD remains significant. Evident in AEX’s partnership with GSR-E, an efficient transaction process, paired with high quality, aligned buyer networks, can bridge this gap. Ascend’s thorough market analysis, deep buyer bench, and neutral valuations reduce friction, curating a streamlined transaction process best suited to innovate alongside ERCOT’s changing energy needs.  

Ascend Analytics actively covers the entire U.S. energy market, delivering the same AEX benefits across all ISOs ripe for BESS asset transactions, whether standalone or coupled with renewable energy generation.  

Interested in Partnering with the Ascend Energy Exchange?

The Ascend Energy Exchange™ (AEX) , an M&A advisory service utilizing a marketplace for renewable and storage projects, significantly reduces transaction costs and improves transaction outcomes by streamlining processes and facilitating a uniquely competitive process for clean energy procurement and project sales.  Contact us today to learn more.

About Ascend Analytics

Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy transition. The company's offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.

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