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.