Norwegian energy company Statkraft and UK power group SSE have completed what the companies describe as the first financial swap of its kind, based on Modo Energy’s ME BESS GB (2H) Index, a benchmark that tracks average revenue earned by operational two-hour battery energy storage systems (BESS) in Great Britain.
In practical terms, the deal lets SSE trade uncertain revenue from part of its battery storage portfolio for a fixed, predictable amount, while Statkraft takes on the risk and potential upside of how the benchmark battery-revenue index performs relative to the agreed strike level. Under the swap, Statkraft will pay SSE if the index value falls below an agreed strike level, and SSE will pay Statkraft if the index value rises above it.
The swap is settled against the index itself, not the specific performance of either company’s own battery assets. For example, if the agreed strike level were GBP 70,000 ($94,290)/MW/year and the index came in at GBP 50,000, Statkraft would pay SSE the GBP 20,000 difference; if the index came in at GBP 90,000 instead, SSE would pay Statkraft the difference.
The Modo Energy index measures the average revenue earned per megawatt by a pool of qualifying, operational two-hour batteries in Great Britain – batteries whose energy storage capacity is roughly double their power rating, such as a 50 MW/100 MWh system. Unlike simpler hedging tools that model only the gap between high and low wholesale electricity prices, the index captures the main publicly observable battery revenue streams, including wholesale trading, Great Britain’s balancing mechanism, frequency-response and reserve services, and the capacity market.
Modo Energy said the broader revenue coverage can reduce basis risk: in one comparison provided by the company, a battery’s actual revenue diverged from the index by an average of about GBP 5,700/MW annually, versus roughly GBP 29,500/MW annually when measured against a simpler wholesale-price-spread benchmark.
The index is FCA-regulated, meaning its administrator and methodology meet UK financial regulatory standards for benchmarks used in financial contracts, giving banks, insurers and trading counterparties a more standardized reference point for pricing battery-linked derivatives.
Statkraft and SSE did not disclose the swap’s size, strike level, duration or other commercial terms.
Duncan Dale, Statkraft’s head of origination for the United Kingdom and Ireland, said the deal reflects growing use of financial tools that let battery owners manage risk by locking in revenue when prices are considered high, and that Statkraft expects to pursue more such transactions across its 9,000 MW portfolio.
Gordon Bell, managing director of SSE Energy Markets, said the transaction shows the growing maturity of battery storage as an asset class and provides a new way for market participants to manage exposure to battery revenue. Quentin Scrimshire, CEO and co-founder of Modo Energy, said the swap signals that battery storage has matured to the point where it can be hedged and valued using tools common in established financial markets, adding that he expects more such deals to follow.
Statkraft’s European battery portfolio, which underpins deals like this swap, spanned eight operational or under-construction assets across the United Kingdom, Ireland and Germany as of May 2025, according to the company. Modo Energy, the London-based analytics platform behind the index used in the swap, raised $15 million in late 2023 to expand its subscription-based revenue and performance data platform, and has since built out benchmark indices across 13 global markets.
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