| Baloiço. Solar and storage together. |
A client asked me a good question recently. If solar is so cheap now, why are returns not obvious?
The answer is that cheapness created its own problem. Solar became so inexpensive and so widely deployed across Iberia that it now floods the grid at the same hours every day. When everybody generates at once, prices at those hours fall, sometimes below zero. Generation gets curtailed. A perfectly functional asset earns nothing for part of its day, not because it failed but because it succeeded alongside everyone else.
Storage is the answer the market has settled on, and understanding why changes how you read an energy project entirely.
Why volatility becomes an asset rather than a threat
A solar farm on its own is exposed to whatever the market pays at the moment it generates. It has no choice about timing. The sun decides.
A battery has choice. It can absorb electricity when supply is abundant and prices are low, hold it, and release it when demand rises and prices climb. The wider the gap between those two moments, the better it performs.
That inversion is the whole point. The intraday price volatility that damages a simple generation asset is the commercial engine of a storage asset. And Iberia, with its very high renewable penetration and integrated cross-border market, produces more of that volatility than most of Europe. The thing that makes the region difficult for pure generation makes it attractive for storage.
Four jobs, one site
What I find most useful to explain is that a well-positioned storage asset is not doing one thing. It is doing several, and they are not all the same kind of income.
It can trade the difference between cheap and expensive hours in the wholesale market. It can operate in the intraday market as conditions shift. It can provide the fast-response services grid operators need to keep the system stable, which is paid for readiness rather than volume. And it can participate in balancing markets when the system is short or long.
Those revenue sources behave differently from one another. Some pay for being available. Some pay for acting. That diversity is precisely what makes storage read more like infrastructure than like a commodity bet, and it is why institutional capital has been steadily reclassifying the asset class.
I have written more on that shift in the race to build Europe’s storage capacity, which covers why the policy direction and the commercial logic now point the same way.
Where the outcomes actually diverge
Here is the part that gets least attention and matters most.
Two storage sites with identical hardware can produce very different results. What separates them is not the batteries. It is grid connection quality, how charging cycles are managed, how degradation is handled over the asset’s life, the warranty terms, and the credit quality of the counterparties on the other side of every agreement.
Those are governance and operational questions, not technical ones. They are also the questions that a well-run private structure can answer clearly and that a broad thematic exposure cannot. If you own storage through a diversified index or a listed vehicle, you own the theme. You do not own the decisions.
That distinction is why I spend more time asking about operators than about equipment.
The approach Baloiço takes
Baloiço applies this thinking across solar and battery storage assets in Portugal, advancing them through permitting, grid alignment and pre-construction, with storage deployed alongside generation rather than bolted on afterwards.
The logic is straightforward. Generation and storage on the same site, sharing a grid connection, under a single framework, is worth more than either separately, because the asset can respond to the market rather than simply submit to it. Portugal has moved deliberately to enable exactly that, allowing shared grid connections between solar and storage and fast-tracking permitting for co-located projects.
Baloiço is introduced by Univere Investments for qualified professional investors. As with everything at this level, the detail lives in the documentation and it merits a proper due diligence conversation rather than a quick read. The Baloiço page is the place to start.
Two related strategies sit on the same thesis. I have written separately about Santa Marta, the long development history behind the asset, and about Solar45, which addresses the development funding gap. Read together, the three describe one thesis approached from three angles.
If you would like to talk through how energy infrastructure fits your own position, I am glad to start there. More at Stuart McKenzie Consultancy.
The strategies referenced are intended for qualified professional investors and are not offers or invitations to invest. Nothing here is investment, legal or tax advice. Please take appropriate professional advice before making any decision.
