### **Bilateral Utility Contracts** (Lower risk, preferred for financing) - Fixed capacity payments over 10-20 years - Predictable revenue, easy to securitize and finance against - Less upside but stable cash flows - Best for raising debt capital - Example: Swell's Hawaiian Electric 80MW contract ### **Wholesale Market Participation** (Higher risk/reward) - Bid into ISO/RTO energy and ancillary markets (ERCOT, CAISO, PJM) - Revenue varies with market conditions (daily price volatility) - Can capture price spikes ($1,000+/MWh during scarcity events) - Harder to finance against (banks don't like volatility) - Requires sophisticated trading algorithms ### **Hybrid Model** (Most common at scale) - Base load covered by utility contracts (70-80% of capacity) - Excess capacity bids into wholesale markets (20-30%) - Risk-adjusted return profile (stable base + upside optionality) - Can still securitize the contracted portion