Sunotec, Shell seal cross-border hedge for 600+ MWh battery storage

Bulgaria’s Sunotec has signed a cross-border agreement with Shell Energy Europe B.V (Shell), marking a milestone in advancing innovative financial mechanisms for the development of battery energy storage systems in Central Eastern Europe.

The five-year agreement covers more than 600 MWh of Sunotec’s battery energy storage projects, which are under development and expected to reach commercial operations date by Q2 2026.

A cross-border spread hedge agreement is a financial contract designed to manage the price difference, or “spread,” between electricity markets in two different countries or bidding zones. Often structured as a contract for difference, it allows generators to hedge against volatility in cross-border price spreads, which fluctuate depending on congestion, interconnector capacity, and other market conditions.

According to Sunotec, this agreement provides long-term price stability for its project portfolio, supporting its financial viability. For Shell, the deal helps to diversify its wider power portfolio in the region. Facilitated by Enery Portfolio Optimisation, a business unit of Austrian renewables developer Enery, the agreement is among the first of its kind in Central Eastern Europe. However, the press release issued on November 4 does not specify which countries are covered by the deal.

“This pioneering agreement demonstrates the power of collaboration in advancing flexibility and renewable-energy driven independence. By uniting technical expertise with financial ingenuity, we are helping to build a more resilient and integrated energy system,” said Kaloyan Velichkov, founder and CEO of Sunotec.

In a separate announcement, Sunotec said it has officially signed a strategic agreement to deploy 2.4 GWh of battery energy storage systems (BESS) across multiple solar power projects in Europe. Initially announced in late July, this agreements marks the first use of Sungrow’s BESS technology in Bulgaria.

Several of the projects will be supported by Bulgaria’s RESTORE program, representing some of the largest and most advanced energy storage systems in the country and Europe to date.

Sungrow will supply its PowerTitan 2.0 BESS, while the string inverter SG350HX-20 and its medium votage station (MVS) will be used for a hybrid project (PV-plus-ESS) within the portfolio.

The 2.4 GWh of energy storage capacity will support grid stability, enable better renewable energy integration, and enhance the reliability of solar parks developed and constructed by Sunotec throughout Bulgaria and wider Europe.

Sunotec has built more than 10 GW of solar projects to date and most recently it secured financing for a massive portfolio of renewables projects, including one co-located solar-plus-storage plant and six standalone battery energy storage projects, which together will provide 763 MWh of storage capacity.