Independent power producer Zelestra has secured a long-term tolling agreement with Centrica Energy for a 99 MW/297 MWh battery energy storage system in Germany, marking one of the largest contracted standalone storage deals in the country to date. Under the arrangement, Centrica’s trading arm will control dispatch of the asset while Zelestra receives fixed capacity payments, a structure that de-risks project finance and demonstrates that merchant storage economics have matured enough to attract institutional-grade offtake. The deal signals that revenue stacking — combining wholesale arbitrage, frequency response, and capacity mechanisms — can now underpin bankable, long-term contracts without direct subsidy support.
Tolling agreements have become the preferred route for utilities and traders seeking flexibility without balance-sheet exposure to construction risk. For Centrica, the contract expands a European flexibility portfolio that already spans virtual power plants, demand response, and gas-fired peaking plants, giving its trading desk a physical asset to optimize against increasingly volatile German power prices. For Zelestra, the agreement converts a development pipeline into a financeable asset with predictable cash flows, accelerating its pivot toward a integrated renewables-and-storage platform across core European markets.
Germany’s storage market is at an inflection point. The coal phase-out, rising renewable penetration, and the introduction of a capacity mechanism in 2028 have created a clear long-term value proposition for multi-hour batteries. Yet most projects to date have relied on short-term merchant revenues or one-year ancillary-service contracts. A multi-year toll with a creditworthy counterparty like Centrica sets a new benchmark for debt providers and could unlock a wave of project financing for the 20+ GW of storage currently in German interconnection queues.
The partnership also reflects a broader strategic shift: integrated energy companies are increasingly acting as aggregators of third-party flexibility rather than solely owning assets. Centrica’s willingness to toll a Zelestra-owned battery — rather than build its own — highlights the value of speed to market and the specialization emerging between developers, owners, and optimizers. As Europe’s power systems demand more intricate dispatch logic, the ability to contract and optimize distributed storage at scale will become a core competitive differentiator.
Read the full report at Energy Storage News.