Energy Unplugged by Aurora EP.261 Martin Daronnat on Structuring the Future: How FPAs Are Powering Europe’s Battery Revolution
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Oct 28, 2025 In this engaging discussion, Martin Daronnat, Head of Flexibility & Structured Origination at ENGIE, shares insights from over a decade in energy. He explores how flexibility purchase agreements (FPAs) make large-scale battery storage projects financially viable. Key topics include how FPA pricing depends on technical parameters and market risks, the advantages of physical vs. virtual agreements, and the strategic importance of portfolio effects for traders. Martin emphasizes careful structuring and negotiation to optimize FPA agreements in a rapidly evolving market.
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FPAs Are About Flexibility, Not Energy
- Flexibility Purchase Agreements (FPAs) buy flexibility, not power, and combine a PPA-like payment with an optimization agreement.
- Batteries must be actively steered to make money, making FPAs structurally more complex than renewable PPAs.
Three Distinct FPA Structures
- FPAs come in physical, virtual, and financial forms, each shifting control and complexity differently.
- Physical gives asset control to the offtaker, virtual trades volumes without taking specific asset control, and financial is a pure swap.
Document Constraints Early And Clearly
- Negotiate and document all technical, warranty and regulatory constraints early when structuring physical FPAs.
- Ensure clear contractual allocation of risks to avoid disputes when unforeseen events occur.