Europe TB Methodology

Modo Energy provides benchmark data for battery energy storage systems across global energy markets, applying a standardised mathematical methodology to ensure consistency and transparency across all published Indices.

1. Introduction

The Modo Energy TB (Top-Bottom) Indices provide a consistent benchmark for assessing the maximum theoretical energy arbitrage opportunity available to battery energy storage systems (BESS) across key European electricity markets. These indices are designed to be simple, transparent, and comparable across countries and market types.

This document provides detailed insights into:

• the regions covered,
• the methodology for spread calculation, and
• the core assumptions applied,

to support accurate and transparent benchmarking of battery energy storage opportunities across European markets.

1.1 Representation

TB Indices represent the spread between the highest and lowest priced periods each day, capturing the theoretical maximum energy arbitrage opportunity. The exact spread calculation method differs depending on the market type, market settlement granularity, and the TB product (e.g., TB1, TB2, TB4).

Modo Energy publishes TB Indices for Day-Ahead and Intraday Continuous markets across key European countries, with indices calculated at the delivery granularity set by the market operator or relevant exchange. Different TB products are available, including TB1, TB2, and TB4, where the number represents the cumulative hours spanned by the selected periods.

1.2 Regions Covered

Our TB Indices currently cover the following European electricity markets:

• AT — Austria
• BE — Belgium
• CH — Switzerland
• DE-LU — Germany/Luxembourg
• DK1, DK2 — Denmark West / Denmark East
• FI — Finland
• FR — France
• GB — Great Britain
• NL — Netherlands
• NO1, NO2, NO3, NO4, NO5 — Norway
• SE1, SE2, SE3, SE4 — Sweden

Additional regions may be added over time as data availability and market participation evolve.

2. Spread Calculation Methodology

The Modo Energy TB Indices calculate the theoretical maximum daily spread available to a battery energy storage system (BESS) by comparing the highest and lowest price periods across both Day-Ahead and Intraday markets.

The underlying calculation approach is consistent across markets but adapts to reflect the settlement granularity of each market — typically hourly for Day-Ahead markets and half-hourly for Intraday markets.

Prices are sourced from the primary market platforms for each country or zone — typically from EPEX Spot (Day-Ahead Auctions and Continuous Intraday), N2EX (Day-Ahead Auction), or directly from the relevant market operator where these platforms are not used. The specific country or zone is explicitly referenced in the TB Index name to indicate the area the index represents.

2.1 Day-Ahead Markets

In Day-Ahead Markets, settlement typically occurs on an hourly basis (or 30-minute basis for selected countries).

Methodology

• For each day, identify the [X] highest-priced and [X] lowest-priced periods (e.g., hourly or 30-minute), where [X] corresponds to the TB product selected (e.g., 1 for TB1, 2 for TB2, 4 for TB4).
• Calculate the average price of the [X] highest periods and the average price of the [X] lowest periods.
• The daily TB spread is the difference between these two averages.

2.2 Intraday Continuous Markets

In Intraday Continuous Markets, trading occurs in near real-time, but indices are built using the same approach.

Methodology

• Identify the highest-priced and lowest-priced settlement intervals.
• Select periods such that the cumulative duration equals the number of hours specified by the TB product (e.g., 1 hour for TB1, 2 hours for TB2).
• Calculate the average of the selected high periods and the average of the selected low periods.
• The daily TB spread is the difference between these two averages.

3. Core Assumptions

The Modo Energy TB Indices are built on the following assumptions:

• 100% Efficiency: Perfect round-trip efficiency is assumed, with no losses on import or export.
• No Constraints: No interconnection, state-of-charge, or ramping constraints are considered.
• Perfect Foresight: Market prices are assumed to be known in advance, enabling optimal charge and discharge decisions.

These assumptions are designed to reflect the theoretical maximum opportunity available based purely on observed market prices.

4. Index Naming Convention

Each TB Index name is structured to provide a clear and consistent reference to the underlying market, location, TB product, and settlement granularity.

The format is as follows:

Where:

• ME stands for Modo Energy.
• TB[X] indicates the Top-Bottom product and the number of cumulative hours spanned (e.g., TB1 = 1 hour, TB2 = 2 hours, TB4 = 4 hours).
• [Country/Zone] specifies the country code or zonal identifier the index is based on (e.g., DE-LU, FR, IT-NORD).
• [Market] indicates whether the index is calculated using Day-Ahead (DA) or Intraday Continuous (ID) prices.
• ([Granularity]) shows the pricing interval used in the calculation — typically Hourly or 30-minute.

Example Index Names

• ME TB2 DE-LU DA (Hourly) — a 2-hour TB Index based on Germany/Luxembourg Day-Ahead hourly prices.
• ME TB1 FR ID (30-min) — a 1-hour TB Index based on France Intraday Continuous 30-minute prices.

The country or zone referenced is directly included in the index name to ensure transparency on which market area the index represents.

5. Data Sources

All market prices used are sourced directly from publicly available datasets provided by EPEX Spot, Nord Pool, OMIE, and other recognised European exchanges.

6. Governance and Compliance

6.1 Transparency

Detailed explanations of calculation methodologies and revenue components are provided to ensure transparency.

6.2 Stakeholder Engagement

Feedback from stakeholders is actively sought and incorporated into methodology updates. This includes the use of real financial and operational data for internal benchmarking purposes to validate our estimations. Reviews are conducted by a team of experts to maintain accuracy and relevance.

7. Methodology Changes

7.1 Notification of Changes

Significant changes to the methodology are communicated to stakeholders in advance, with detailed explanations provided to ensure understanding and transparency. Historical changes are documented and archived in the appendix of this methodology.

8. Consistency and Continuity

8.1 Quality Assurance

Rigorous quality assurance processes are in place to ensure the accuracy and reliability of benchmark calculations. This includes regular audits and validation of data sources and calculation methods.

8.2 Data Integrity

Data integrity is maintained through strict data management protocols, including secure data storage, regular backups, and robust data validation procedures.

8.3 Continuity Planning

Business continuity planning ensures that benchmark calculations can continue uninterrupted in the event of unexpected disruptions. This includes backup systems and contingency plans for data and operational processes.

Disclaimer

This document, including the methodologies and indices described herein, is the proprietary work of MODO ENERGY LIMITED ("Modo Energy") and is provided solely for informational purposes. These indices are designed for use in financial analysis, benchmarking, and decision-making. However, they do not constitute investment advice or a recommendation regarding any specific financial instrument, asset, or strategy.

While Modo Energy strives to ensure the accuracy, reliability, and transparency of the indices and methodologies, all information is provided "as is," without any express or implied warranties, including but not limited to warranties of merchantability or fitness for a particular purpose. Users should be aware that the indices are derived from data that may be subject to revisions, delays, or inaccuracies. Past performance is not indicative of future results, and external factors such as regulatory changes, market conditions, and asset-specific characteristics may impact index performance.

Modo Energy encourages users to conduct their own due diligence and consult with qualified financial professionals before making any investment or operational decisions based on the indices or methodologies herein. Modo Energy disclaims any liability for direct, indirect, incidental, or consequential losses or damages arising from the use of the indices, methodologies, or related data.

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