​Physical, virtual, financial - partial tolls, revenue floors, DA swaps. Which structure suits which asset owner, which offtaker, and how much upside should you sacrifice?

Under Modo Energy's central forecast, a two-hour battery earns €115-130k/MW/year COD 2029 in Germany. Under the low scenario, the same asset earns €70–80k/MW/year. An over-leveraged merchant battery may not be able to service its debt at that level. Fixing the revenue mitigates the risk, but a full toll signs away all merchant upside.

A range of hybrid structures has emerged to sit between the two extremes. The evolution from physical to virtual and financial settlements has expanded the offtaker pool - bringing in energy traders, industrials, and financial investors who could not participate under a physical structure.

Each hybrid structure fixes a different portion of the revenue stack.

This research covers:

How physical, virtual, and financial structures differ.

Which structure best suits each asset owner and offtaker profile.

How partial tolls, revenue floors, and Day-Ahead (DA) swaps each allocate merchant risk.

For whom the BESS tolls: physical, virtual, financial structures

The key difference between tolling structures is who takes control of the asset, the asset owner or the offtaker.

Physical toll: The offtaker is legally responsible for scheduling and balancing the asset (BRP). It requires a BRP licence and active energy-trading infrastructure, which is generally exclusive to large utilities. Physical tolls command the highest fixed payment levels as the offtaker can use the battery to fix forecast errors in their renewables fleet - avoiding strict imbalance penalties.

Virtual toll: The owner remains BRP and retains dispatch control. The offtaker sends nomination schedules which are settled financially against the market, receiving their contracted share without physically dispatching the asset. The owner can choose to optimise around those nominations, capturing intraday and ancillary opportunities that the offtaker might not prioritise.

Financial toll: Removes all operational involvement. The offtaker takes a position on asset revenues. Dispatch sits entirely with the asset owner. Any creditworthy counterparty can participate - including corporates seeking revenue exposure without trading infrastructure.

Virtual and financial structures have expanded the counterparty pool and enabled a new set of hybrid structures for allocating merchant risk.

Hybrid structure mechanics

Partial toll: retains control of the asset while banking a portion of contracted revenues

The offtaker pays a fixed rate for a share of MW capacity and receives the revenues that share earns. The remaining MW stays merchant.

A partial toll is a strong fit for virtual settlement - the offtaker submits nomination schedules to maximise revenue across their portfolio, while the owner retains BRP and dispatch control, allowing the optimiser to maximise the revenue of the individual asset.