Help CenterBESS transactions typically take the form of tolling agreements. In these agreements, the offtaker effectively rents a storage facility from the developer. The offtaker can then operate that storage facility as they see fit to optimize revenue. There are many operating strategies but, for our purposes, we can generalize them into two main ones: selling into energy markets or selling into ancillary markets.
RenewaFi's TB2 model provides the value of a BESS asset if the offtaker were to sell exclusively into the Day-Ahead energy market.
TB2 stands for "top-bottom two," or the top two hours and bottom two hours of each day. Following a TB2 strategy, BESS operators seek to capitalize on price fluctuations throughout the day by purchasing energy during the two hours when prices are at their lowest and selling energy during the two hours when prices are their highest. This approach allows the operator to take advantage of the most significant price differences within a 24-hour period. The TB2 value therefore represents the Day-Ahead energy-only value of a 2-hour BESS asset.
The calculation of a TB2 can be explained via a simple equation:
Top Hours - Bottom Hours - Roundtrip Efficiency - Persistence Model = TB2 Value
