Managing Solar Shape Risk: How Virtual BESS Complements Renewable Procurement

While utilities and dedicated battery developers are leading the build out, corporate energy buyers, particularly data centres and energy intensive industries, are only now beginning to explore how storage can be leveraged as a strategic tool to manage the risks associated with renewable energy procurement.

One emerging solution is virtual BESS, a financial product that mimics the behaviour of a battery without requiring physical infrastructure.

Solar Volatility Is Reshaping Corporate Procurement

Solar PPAs are increasingly exposed to price cannibalisation. While in 2023 only around 9% of solar power was generated during hours with prices ≤ 0 EUR/MWh, this increased to approximately 20% in 2024 and about 27% in 2025. That’s a challenge for large energy consumers and energy intensive industries trying to meet renewable targets and optimise their energy procurement.

The challenge is that solar-heavy portfolios tend to generate most of their output during midday, when power prices are often at their lowest or even negative. Meanwhile, these buyers still need to purchase power from the market during the evening peak, when prices are highest (especially as evening peak prices increasingly exceed SRMC due to start-up costs and the need to recover lost revenue from low or negative midday prices). This price profile and its potential evolution increases shape risk for solar-heavy portfolios, while it is negatively correlated with the value captured by a battery, which benefits from charging during low-price hours and discharging during high-price hours.

vBESS: A Financial Battery for a Changing Market

A vBESS is not a physical asset, it is a financial contract that replicates the economic benefits of owning a battery. It allows companies to hedge against power price volatility without installing or operating actual storage infrastructure.

One of the simplest and most interesting structures is the TBx (Top-Bottom “X” hours) swap, and here’s how it works:

• Each day, the electricity spot market clears at different price levels across the day (hourly or 15-minute intervals), reflecting changing supply and demand conditions.
  
  
• Under a TBx contract (e.g. TB4), the buyer receives the daily price spread between the x highest-priced and x lowest-priced hours of a defined spot market reference (e.g. the EPEX Spot hourly average).
  
  
• In exchange, the buyer pays a fixed price.
  
  
• The buyer hereby gains direct exposure to realised day-ahead price spreads. For a solar-heavy portfolio, this provides a financial hedge against the aforementioned shape risk by transferring value, at a fixed price spread, from low-price midday hours to high-price evening hours.

In essence, this structure mirrors the behaviour of a perfectly optimised battery without the buyer needing to own or manage one, and without exposure to physical risks such as maintenance requirements, degradation, or operational underperformance.

When the spread is high and you have high cost in your PPA portfolio, you win with a TBx swap.