Transmission

Battery storage investment in Europe now depends less on whether the revenue exists and more on how it gets financed. With Italy's first MACSE auction won largely by a single player while Germany's fully merchant market is pushing lenders towards shorter, tighter debt, investors have to work out what makes a battery project bankable without a long-term contract.
Grace Kankindi, Deputy Head of Investment Management at Aquila Clean Energy, joins Ed Porter to walk through how she assesses battery investments across multiple European markets.
They cover:
- Why the first MACSE auction worked as designed, even though prices cleared low and one bidder took most of the contracts, and what new anti-concentration rules could change in round two.
- What happens to Italian battery projects that miss out on MACSE, from tolling to the capacity market, and why Italian lenders still won't back fully merchant projects.
- How lenders are financing merchant batteries in Germany, with debt terms of around 3 to 7 years instead of 15 to 20, and cash sweeps to pay debt down faster.
- The risk investors most often underprice, the optimiser, and why the lowest profit share isn't always the cheapest deal as German two-hour battery revenues fall.
- Why timing decides returns in smaller markets like Lithuania and Finland, why Poland is next on Grace's radar, and why she thinks contracted revenue is riskier than it looks.
Want to stress-test how a German battery's revenues hold up as saturation sets in? Ko, Modo Energy's AI analyst, is built for exactly these questions.
Transcript available here
Chapters
0:00 Intro
1:22 MACSE Auction Results and What People Got Wrong
2:38 Italy Battery Storage Investment Beyond MACSE
5:18 MACSE vs Merchant by Italian Price Zone
6:29 Battery Revenue Strategies Without a MACSE Contract
10:05 Battery Project Finance: MACSE, Tolling and Merchant
12:12 Second MACSE Auction and Anti-Concentration Rules
13:58 Merchant Battery Financing in Germany
16:14 What Lenders Want From a Merchant BESS Project
18:38 German Battery Revenue Saturation
20:27 Battery Optimiser Risk and Profit Share
23:12 Dynamic Grid Fees in Germany
25:25 Diversifying a Battery Portfolio Across 12 Markets
28:13 Lithuania and Finland Battery Storage Markets
30:13 Where to Invest Next: Poland
31:12 Best Performing Battery Assets in 10 Years
33:46 The Hidden Risk in Contracted Battery Revenue

Batteries earn volatile revenues, but lenders want fixed ones. Financial swaps that trade a fixed payment for floating battery revenue, from day-ahead spreads to full revenue indices, are how that gap is starting to close.
Chris Kennedy, Founder & Managing Director at Miranda Energy, joins Ed Porter in Berlin to explain how battery swaps actually work, where basis risk hides, and why he treats power volatility as an asset class in its own right.
They cover:
- Why basis risk is the most misunderstood part of day-ahead TB swaps, and how round-trip efficiency, degradation schedules, payout caps and availability adjustments bring the swap closer to what the asset really earns.
- How day-ahead swaps are evolving into total revenue swaps benchmarked to broader battery revenue indices like Modo Energy's, and why capturing more of the revenue stack cuts basis risk further.
- Why fixed-for-floating battery swaps borrow the ISDA playbook from interest rate markets, and how a TB swap let a German solar portfolio hedge the duck curve without building a battery.
- Why Chris sees volatility, not the depreciating battery, as the asset to own, and how ten-year TB swaps, credit-light offtakes for BESS SPVs and 245MW of fixed offtakes across Germany, Poland and Hungary set Amaranth Energy apart from the big trading houses.
- Chris's contrarian view: the market puts too much weight on backwardation in the TB forward curve, when spreads may prove directionally persistent as solar continues to outpace flexibility.
Want to go deeper on battery revenue swaps and indices? Sign up for free to Ko, Modo Energy's AI analyst, at modoenergy.com
Exploring a battery revenue swap? Talk to our team about using Modo Energy indices in your contracts.
Chapters:
0:00 Intro
1:19 Basis Risk in Day-Ahead Battery Swaps
3:42 Unlimited Liability, Payout Caps and Availability
6:54 Total Revenue Swaps and Battery Revenue Indices
8:21 Battery Offtakes: Profit Shares, Floors and Tolls
9:55 Fixed-for-Floating Swaps and ISDA
11:21 German Solar, Negative Rates and the Duck Curve
13:23 Virtual Battery Hedge for Solar Portfolios
16:48 Three Use Cases for TB Swaps
17:27 Power Volatility as an Asset Class
19:57 Prop Shops vs Trading Houses
22:16 Credit-Light Offtakes for BESS SPVs
23:52 Options, Volga and Exotic Battery Hedges
26:22 Poland, Hungary and Emerging BESS Markets
29:48 Spain and Negative Power Prices
31:44 The Ideal Swap Counterparty
33:31 Contrarian View

Poland's battery storage market is skipping the pilot phase, with its first projects starting at 200MW, a size it took Germany five years to reach. And because of the way Poland runs its grid, two identical batteries in different locations can earn very different amounts. With over 2GW of batteries expected on the grid by 2028, the market is about to change fast.
Ed Porter is joined by Aleksandra Radwańska, Country Lead Poland at Entrix, and Jan Kłoczko at Entrix, to unpack what it takes to optimise batteries in a market scaling this fast.
They cover:
How two identical batteries in different parts of Poland can earn very different amounts, and why each needs its own scorecard.
Why getting a new battery approved to support Poland's grid can take up to two years, while everyone is still learning the rules.
How over 2GW of batteries expected by 2028, in a country that peaks at around 25GW, will change the way power is traded in Poland.
What battery owners are choosing between: guaranteed-income deals that help secure loans, or betting on the market.
Why Poland's single national electricity price is coming under strain as the grid gets more congested.
Want to see how battery assets in Poland are performing? Ko, Modo Energy's AI analyst, is built for exactly these questions.
CHAPTERS
0:00 Poland's battery storage market: straight to 200MW
1:17 Central dispatch and location-based battery revenues
4:11 Credible battery optimisers vs good pitch decks
6:46 Benchmarking optimiser performance per asset
9:08 Ancillary services prequalification in Poland
12:47 Starting with 100-200MW batteries: no sandbox
13:19 Intraday liquidity and the TSO balancing crackdown
15:27 Wholesale trading patterns and Poland's duck curve
18:44 Over 2GW of batteries by 2028
20:11 Route to market: floors, tolls and merchant
24:01 Flexible and asymmetric grid connections
27:29 Lessons from bringing large batteries online
28:48 Contrarian view: one national price, a constrained grid
30:47 Contrarian view: collaboration over complaint

As the electrification of heat increases and technologies like heat pump adoption grows, it's tempting to assume the gas network can simply be wound down street by street, in line with falling demand. But it’s not as simple as this: network topology, not customer count, decides when decommissioning is actually viable, and the UK gas network is nowhere close to that point today.
Sam Wilson, Director of Energy System Operations at Cadent, joins the podcast to explain the engineering reality behind that constraint — and how things like pressure control, storage, and gas injection all factor into it.
They cover:
Why network topology, not customer count, decides when decommissioning is actually viable
How gas goes from completely odourless at transmission pressure to detectable on your street.
What it takes to step pressure down from around 90 bar in the transmission system, through off-takes and above ground installations, to roughly 30 millibars at a domestic appliance.
How line packing turns the pipe network itself into short-duration storage, with operators raising or lowering in-pipe pressure to absorb daily demand swings.
What's actually limiting how much biomethane and hydrogen can go into the network today, and why hydrogen can be blended in without any changes needed to downstream appliances.
Want to know how heat electrification could reshape power demand in GB? Ask Ko - Modo Energy’s AI energy analyst - sign up for free here
Transcript available here
You can watch or listen to new episodes every Tuesday. Transmission is a Modo Energy production. Your host is Ed Porter - Director EMEA & APAC at Modo Energy.
Chapters:
0:00 Introduction
1:09 What people get wrong about the gas network.
3:03 From gas field to home boiler: the full journey
4:33 UK's four gas distribution networks explained
5:15 Transmission pressure: 90 bar and above
6:25 Line packing - storing gas inside the pipes
7:55 Industrial vs domestic gas pressure needs
12:34 Replacing 100-year-old cast iron gas pipes
13:56 Biomethane in the gas network
17:15 Hydrogen blending: how much the network can take
21:22 Getting hydrogen to industrial gas users
23:18 Electrification vs the gas network's engineering reality
24:26 What happens when homes remove their gas connection
25:46 Why decommissioning the gas network isn't linear
31:57 Sam Wilson's contrarian take on the energy transition
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The grid is swapping spinning turbines for grid forming inverters, and something is getting lost in the trade. A turbine could always throw 5 times its normal output to clear a fault, for free, using nothing but physics. Inverters can only manage around 1.5 times theirs. So if renewables are going to take over, where does that missing strength come from instead?
Ben Braun is Chief Engineer at Fluence, where he's spent his career working on power electronics - from batteries to the grid. In this episode, he breaks down grid forming vs grid following inverters for everyone without an electrical engineering degree.
They cover:
- Why "grid forming is slower" than grid following - and why that slower response is actually what makes it more stable in a fault.
- Why NESO in GB and AEMO in Australia are chasing completely different things from grid forming batteries.
- Why grid inertia disappears as spinning turbines retire, and how a sudden burst of power from a battery can fake it.
- Why volatile AI training loads are turning data centres into miniature grids of their own, and how batteries are used to stop that volatility ever reaching the wider network.
- Why Ben's biggest concern isn't too little fault current on the grid, but too much of it - and why that could force a wave of grid upgrades most people haven't priced in
Want to see which grids are paying for inertia and fault current today, or where the next stability tenders are opening? Ko, Modo Energy's AI analyst, is built for exactly these questions. Free sign up: https://modoenergy.com/product/ko?utm_source=podcast&utm_medium=youtube&utm_campaign=ben_braun&utm_content=ko_signup
📄 Related article: [companion article link]
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⏱ CHAPTERS
―――――――――――――――
00:00 – Why the Grid Needs More Than Power Flow
01:31 – Grid Forming Inverters: Common Misconceptions
04:51 – Grid Forming vs Grid Following Speed Explained
07:16 – Bathtub Analogy for Grid Forming Batteries
11:44 – NESO Stability Pathfinder and Global Grid Forming Numbers
14:11 – AEMO's System Strength Charge Explained
16:28 – Inertia and Short Circuit Level for Beginners
17:10 – Grid Inertia Explained With Lorries and Cyclists
21:44 – How Batteries Replicate Grid Inertia
23:03 – Fault Current Basics: Fuses and Circuit Breakers
26:16 – Fault Current Math and Retiring Turbines
28:52 – Voltage Stiffness and System Strength
39:07 – Reactive Power Explained With a Circus Tent
42:23 – Black Start and Grid Restoration Explained
46:57 – Grid Forming Inverters for Data Centres
53:30 – Contrarian View: Too Much Fault Current
61:18 – Grid Upgrades for High Fault Current Levels
You can watch or listen to new episodes every Tuesday. Transmission is a Modo Energy production. Your host is Ed Porter - Director EMEA & APAC at Modo Energy.
Music licensed via Artlist.
🔔 Subscribe for more energy market analysis: / @modoenergy
🔗 Follow Modo Energy:
→ LinkedIn: linkedin.com/company/modo-energy
→ Twitter/X: x.com/modoenergy