EnSurance
Merchant Storage Financing

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EnSurance™ enables efficient financing for merchant storage. Ascend's valuation and operational capabilities enable slicing and transferring storage revenue risk to creditworthy risk managers. This year, the risk-taking capital committed to EnSurance's offerings will support over 2000 MWh of storage projects with low-cost financing via our debt recovery and revenue guarantees, accelerating the deployment of the merchant storage demanded by increasingly renewable-pre-dominated power markets.

Insurance backed guarantees to support merchant storage financing

EnSurance provides efficient storage financing with recovery and revenue guarantees

Loan Guarantee

Revenue Guarantee

Offering

Guarantees lender principal recovery

Guarantees proxy or realized revenue floor

Outcome

Enables 70% to 85% leverage for merchant operations

Insures debt service

In highly volatile power markets across the country, investments in storage are being delayed due to high costs of capital required to overcome merchant revenue risk.

Case Study: Merchant ERCOT, 400 MWh Facility

A client of Ascend's BatterySIMM and SmartBidder services was seeking means to mitigate merchant revenue exposure, in order to increase leverage on their 200 MW, 2-hr duration ERCOT project. The project sponsor first worked with the BatterySIMM team to optimize the system configuration for expected market dynamics, then developed with the SmartBidder group a dispatch strategy expected to maximize revenues within the desired risk thresholds. The EnSurance team then develped a stochastic underwriting model for expected revenues under the optimal system configuration and SmartBidder dispatch strategy, and sourced risk taking capacity to support two offerings to increase leverage and boost sponsor returns.

Loan Guarantee

  • Maximizes leverage by guaranteeing recovery on a loan of 80% of project costs, in exchange for an upfront policy premium of ~10% of loan value.
  • Efficiently maximizes leverage on sponsor equity without encumbering cash flows.

Revenue Guarantee

  • Guarantees annual revenues over a 10-yr term to prevent default on loan value up to 80% of project installed costs, for an ongoing sweep of merchant upside up to 15% of the total guaranteed amount.
  • Prevents the project from defaulting on debt service sized to guaranteed revenues.
EnSurance protects project sponsor's downside returns while allowing them to retain upside exposure
Merchant storage financing, revenue guarantee, recovery guarantee, loan guarantee

Analytic Edge

Ascend creates efficient risk transfer through determining the actuarial based risk calculations on future outcomes and distributed these risks across broad pools of capital. We leverage our analytics engine PowerSIMM in conjunction with Ascend Market Intelligence for actuarial forecasting. BatterySIMM determines the valuation and forecasted operations with SmartBidder governing daily operations in compliance with risk return limits.

Ascend's unique suite of capabilities allow risk management partners to back EnSurance guarantees with low-cost capital
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