TBs 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 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 markets.

2. 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[duration] indicates the Top-Bottom product and the number of cumulative hours spanned (e.g., TB1 = 1 hour, TB2 = 2 hours, TB4 = 4 hours).
• [Geography] specifies the geographic region this index is for. These are represented by either two letter ISO country codes or zonal identifiers (e.g., DE - Germany, ERCOT - Electric Reliability Council of Texas).
• [Market] indicates which market the index uses. The markets vary by geography, with examples including DA (day ahead market), RT (real-time market), ID (intraday). In geographies where there is only one market, this part of the name is omitted.
• ([Granularity]) shows the pricing interval used in the calculation.

2.1 Example Index Names

• ME TB2 FR DA (Hourly) - 2-hour TB Index for France using Day-Ahead hourly prices.
• ME TB1 NO1 ID (30-min) - 1-hour TB Index for the Eastern Norway (NO1) bidding zone using Intraday 30-minute prices.
• ME TB3 AUS NEM-VIC (5-min) - 3-hour TB Index for the Australia NEM market, for the region of Victoria, using 5-minute prices.

3. Calculation Methodology

1. If the market's price data is more granular than the TB index (e.g., 5-minute market and an hourly TB index), prices are averaged within each index period. For example, for an hourly TB index based on a 5-minute market we average the price in each 5-minute period in each clock hour, and use this hourly price in step 2.
2. For each day, identify the [X] highest-priced and [X] lowest-priced periods (aligned to the granularity of the index - see step 1), where [X] corresponds to the TB product selected (e.g., 1 for TB1, 2 for TB2, 4 for TB4).
3. Calculate the cumulative price spread between the [X] highest periods and [X] lowest periods (CURR/MW/day).
4. This daily spread is scaled to CURR/MW/year by multiplying by 365.

3.1. 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. Data Sources

4.1 Europe

4.1.1 Day-Ahead Market (DA)

For Day-Ahead TBs we use the following price data:

• GB - Average of EPEX and N2EX hourly day ahead auctions.
• AT, BE, DE, DK, FI, FR, NL, NO, SE - Average of EPEX and N2EX European hourly day-ahead coupled auctions (SDAC).
• CH - EPEX hourly day-ahead auction.

4.1.2 Intraday Market (ID)

• GB - RPD HH
• AT, BE, CH, DE, DK, FI, FR, NL, NO, SE - IDFULL 60min

4.3 Australia

All market prices used are sourced directly from publicly available datasets provided by NEM. TB Indices are provided for the real-time (RT) market at state level (NEM-NSW, NEM-QLD, NEM-SA, NEM-TAS, NEM-VIC).

5. Governance and Compliance

5.1 Transparency

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

5.2 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.

6. Methodology 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.

7. Consistency and Continuity

7.1 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.

7.2 Data Integrity

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

7.3 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.

It is not possible to invest directly in an index. Indices are intended to represent performance benchmarks, and exposure to an asset class represented by an index may be available only through separate investable instruments. Modo Energy does not sponsor, endorse, or manage any financial products that aim to track the performance of its indices.

All intellectual property rights to the indices and methodologies are owned by Modo Energy. Unauthorized use, reproduction, or redistribution of this document, in whole or part, is strictly prohibited without prior written consent from Modo Energy.

This document and the indices it describes are subject to updates and revisions. Significant changes will be communicated to stakeholders as appropriate. For further information, including licensing inquiries, please contact Modo Energy directly.

By accessing or using this document, you acknowledge and accept the terms of this disclaimer.