Osborne Clarke advises Return Energy on the conclusion of Europe’s largest fixed‑price‑based virtual flexibility agreement to date with ENGIE

Osborne Clarke has advised Return Energy (“Return”), an independent provider of energy storage solutions, on the conclusion of a long‑term virtual flexibility agreement (virtual Flexibility Purchase Agreement – vFPA) with ENGIE. The agreement for the German market will come into force from 2027, covers 100 MW of virtual storage capacity (BESS) and is regarded as the largest fully fixed‑price‑based vFPA in Europe to date.

Under the vFPA, Return will provide ENGIE with a uniform, virtual flexibility portfolio, which ENGIE will optimise on the wholesale market as well as across various balancing and ancillary services markets. The long‑term, fixed‑price‑based structure gives ENGIE planning certainty with regard to flexibility capacities and supports the objective of increasingly offering customers 24/7 green power solutions.

Germany as a key market for flexibility and battery storage

Germany is a key market for Return, characterised by a high share of renewable energies and a dynamically growing demand for flexibility. The vFPA with ENGIE is a central component of Return’s European growth strategy: in addition to Germany, the company is already active in the Netherlands, Belgium and Spain and, with the support of investor APG, is continuing to expand its portfolio of battery storage projects in Europe.

By pooling decentralised battery storage systems in a virtual portfolio, flexibility is integrated efficiently into the energy market. The model supports the balancing of electricity supply and demand where renewable energies feed in on a volatile basis, reduces grid congestion and strengthens security of supply. At the same time, the long‑term contractual structure sends an important signal for the bankable scaling of decentralised storage solutions.

ENGIE is contributing its expertise in trading, structuring and origination to the collaboration. The combination of Return’s technical platform, decentralised flexibility and ENGIE’s structured marketing approach demonstrates how new, market‑oriented business models for flexibility can be established in Europe.

“The agreed structure shows how decentralised battery storage systems can, via virtual portfolios, develop into a bankable, scalable asset class – with long‑term price and planning certainty for both sides. Particularly exciting is the consistently fixed‑price‑based design of the vFPA, which creates a clear framework for investments in flexibility capacities while at the same time leaving room for innovative marketing strategies,” says Anna von Bremen, Partner at Osborne Clarke.

Osborne Clarke provided Return with comprehensive advice on the energy‑sector, regulatory and contractual aspects of the structuring and negotiation of the vFPA. The advice focused in particular on designing the long‑term, fixed‑price‑oriented revenue structure, on the contractual mapping of the decentralised battery storage portfolio and its pooling in a virtual flexibility portfolio, as well as on the classification of flexibility marketing within the German regulatory framework.

The Osborne Clarke team that advised Return on the transaction consisted of Anna von Bremen (lead) and Rahel Brockmann.