Translation: Original published in Finnish on 11/4/2026 at 7:45 am EET.

The company has been developing trading and optimization services for energy storage facilities for several years, but it has been slow to make commercial progress. Securing a substantial customer directly supports operational profitability and provides a reference to help expand the customer base. Although trading services are strategically important as part of the company’s comprehensive offering, we also see their commercial progress gradually supporting the ongoing turnaround in profitability. However, the news of the contract did not warrant any estimate changes.

First major customer for trading services

Last week, Merus Power announced that the 30 MW/66 MWh battery energy storage system ordered by Exilion and delivered by Merus Power will use the trading systems developed by Merus Power. This contract is significant because the trading services developed by Merus Power have previously only been used by a few smaller-scale energy storage customers (Sallila Energia 2 MW, Herrfors 7 MW). Exilion, primarily owned by Finnish pension funds, is a major developer and owner of renewable energy projects in Finland. Merus Power has delivered energy storage technology to Exilion for a few other projects as well.

In addition to the project's size, another significant aspect of the agreement relates to the scope of the trading system being offered. While previously won smaller customer projects focused on the frequency regulation market, the system now being delivered will broadly cover various electricity market operations, including pursuing price arbitrage in wholesale electricity markets.

Development of the extensive trading system completed

Merus Power began developing trading and optimization services for energy storage systems around 2022–23, and its first customers were announced in spring 2024. At that time, energy storage systems were primarily used in the frequency regulation market. However, the company's customer base was small at that point in the market's development (consisting of the two smaller customers mentioned above), as we estimate that the timeline for developing the solution lagged behind that of its competitors. Since then, the company has revised its development strategy and outsourced part of its development and maintenance responsibilities to Tieto. The newly completed next-generation trading system is more comprehensive than before and enables the maximization of the economic benefits of electricity storage, for example, across various reserve markets and the wholesale electricity market. In our view, the completion of the new system and a prominent reference support the conditions for expanding the customer base.

Trading services generate recurring income flows

Energy storage trading services are typically based on performance-based fee structures. In our view, growing these recurring income streams will somewhat stabilize Merus Power's profitability profile, even though their share of the company's total revenue remains very low. We estimate that transitioning from the trading system development phase to commercialization will bolster the company's profitability. While a single large contract does not yet cover the ongoing costs associated with providing services, several similar contracts could make the operation profitable on its own. Offering trading systems as part of a turnkey solution is, in our view, also partly a strategic choice that supports the company's overall energy storage business.

We believe that energy storage trading services are a fairly competitive market, including smaller growth companies such as the Finnish domestic market leader, Capalo AI, as well as larger energy sector players. Although we think it may be difficult for Merus Power to distinguish itself from competitors in this market through trading services alone, the company can offer customers comprehensive turnkey deliveries, as well as broad service packages that include service and maintenance agreements.