Beyond the Percentage: Rethinking BESS Optimizer Selection
While tolling arrangements are increasingly common for BESS projects in Germany, especially for large projects >50MW, fully merchant transactions are still considered a bankable option for smaller projects. In commercial selection of the Merchant BESS Optimization, the question “What revenue share do you charge?” tends to dominate. While this question is obviously important, it is not sufficient to de-risk your BESS’ Merchant route-to-market set-up. When selecting their BESS optimizer, investors need to look beyond the percentage.
Beyond Revenue Share: What Really Matters
At Flexup, we’ve worked with investors, developers, and optimizers across Germany and beyond. We've seen how a shallow evaluation could lead to missed revenue, excessive cycling, opaque operational risk exposures. Therefore, we’ve collected some basic questions and some more advanced evaluation aspects to widen your thinking:
A) 6 basic questions about market scope:
1) Is the optimizer active on all organized markets (DA, IDA, IDC, all aFRR markets, FCR market)? (some are not enabled for multi-market trading and e.g. only do FCR bidding)
2) Is the optimizer able to granularly (per delivery period, most granular quantities available) bid on these markets?
3) Which markets are manual, which are algorithmically/automatically bid into?
4) Beyond being active in all markets, is the optimizer able to optimize across markets: For example, are bids in the aFRR-energy market and IDC positions coordinated?
5) What is the optimizer’s view on other markets, such as forward (OTC) markets (exist today, used by some direktvermarkters, but not by most BESS optimizers). Or, what about other, less formally organized, and potential future capacity markets, inertia contracts, grid-booster contracts, distribution-grid booster / grid constraint markets, reactive power markets?
6) Related to potential future grid-capacity markets: How does the optimizer enable its trading platform to deal with grid-supportive or grid-neutral trading, including constraint/redispatch notices from TSO/DSO?
B) 9 more advanced aspects to evaluate:
1) Performance: €/MW/month, revenue differences between months and days (= volatility of returns)
2) Benchmark Advantage: Uplift vs baseline (%), % outperform vs. naive/fixed strategies, monthly/daily variation vs. benchmark
3) Robustness & Resilience: Stress-test, out-of-sample test results, volatility of revenue under different market price scenarios, ability to forecast and “hit” extreme price events
4) Battery Fit: Cycles/year, SoC/ramp constraint violations, degradation modelling
5) Explainability: Trade logs, visual decision trace, explanation of market price prediction models
6) Integration & IT Ops: API latency, SCADA compatibility, dependency on third-party providers for critical activities (e.g. any external market-access/trade execution, REMIT reporting)
7) Data pipeline setup: Data sources consumed, decision cycle time, forecast update cycle time, trade signals dependencies (e.g. SHAP-style outputs), data-pipeline tech stack
8) Compliance & Surveillance: Pre-trade controls (e.g. bid limits), post-trade reporting, monitoring, REMIT II & NIS‑2, AI Act
9) Risk Management: Real-time VaR, physical limits (availability, forecasts), kill-switches, business continuity plans
We believe this level of diligence should be standard — not reserved for megaprojects. That's why we created a BESS Optimizer Evaluation Checklist. We’re sharing our checklist as a free resource to help investors and operators make better decisions. Contact us to get the Checklist.
Disclaimer: This checklist is for information purposes only. It does not guarantee a positive outcome in your BESS optimizer decision. It is not intended to be used as a decision-making support. It is only meant to broaden the discussion about how select your BESS optimizer.