Aurora Grid Renewables — Business Model & Revenue Streams
The revenue streams across generation, battery storage, energy trading and PPAs, the unit economics and the platform economics underpinning Aurora Grid.
Section 4 · Business Plan
Business Model & Revenue Streams
The revenue streams across generation, battery storage, energy trading and PPAs, the unit economics and the platform economics underpinning Aurora Grid.
Aurora Grid earns revenue across five divisions spanning the
renewable value chain. Utility-scale solar and wind provide the
contracted, asset-backed base; battery storage firms and dispatches that
energy and earns capacity and ancillary revenue; the Aurora Grid
Exchange trades, aggregates and wheels power to corporate offtakers; and
the carbon-markets division monetises the platform’s environmental
attributes.
| Division | Revenue share | Description & contracting basis |
|---|---|---|
| Utility-scale solar (3.5 GW) | 45% | PV in Northern Cape, Free State, North West, Limpopo; 15–20 year PPAs; contracted base. |
| Wind energy (2.0 GW) | 25% | Eastern and Western Cape wind; complementary profile; 15–20 year PPAs. |
| Battery storage (1.8 GW) | 15% | Grid balancing, dispatchable capacity, arbitrage and ancillary services; BESIPPPP-style availability payments. |
| Energy trading (Aurora Grid Exchange) | 10% | Corporate PPAs, aggregation, wheeling and energy risk management; margin on volume. |
| Carbon markets | 5% | Carbon credits, RECs and sustainability instruments. |
services mix
The blended EBITDA margin plateaus near 43–46%, not the 65–75%
typical of a pure generation IPP. This is not underperformance — it is
the arithmetic of the integrated model. Generation and storage are
high-margin, asset-backed businesses; trading, wheeling and grid
services are high-revenue, lower-margin activities (the platform buys
and resells power, or provides services, at a spread). Blending them
produces a lower but still healthy margin on a much larger revenue base,
and diversifies the earnings. Investors valuing the platform should
apply differentiated multiples by division — a premium infrastructure
multiple to the contracted generation and storage earnings, a lower one
to the trading margin — rather than a single blended multiple, and
should read the ~43–46% margin as the correct, realistic signature of a
trading-inclusive platform.
4.2 The Aurora Grid Exchange — trading, wheeling and aggregation
The Aurora Grid Exchange is the platform’s commercial engine,
converting owned generation and third-party supply into tailored
corporate offtake. It performs four functions: it originates and manages
corporate PPAs; it aggregates supply and demand across multiple
generators and offtakers; it wheels power across the Eskom and municipal
networks from generator to customer; and it manages energy price and
volume risk across the portfolio. Because Aurora Grid owns the
underlying generation and storage, the desk trades from a position of
physical strength — able to offer firm, dispatchable, decarbonised
supply that pure intermediaries cannot.
| Trading function | Revenue basis | Strategic value |
|---|---|---|
| Corporate PPA origination | Margin on contracted volume | Locks long-term offtake for generation |
| Aggregation | Portfolio balancing margin | Matches diverse supply to diverse demand |
| Wheeling | Wheeling fee / transmission arbitrage | Reaches multi-site corporate customers |
| Energy risk management | Hedging & structuring fees | Firms merchant exposure into contracted cash |
| Ancillary & capacity | Availability & services payments | Monetises the storage fleet’s flexibility |
Why trading is margin-accretive but not the
foundation. Trading and wheeling are high-revenue, lower-margin
activities — the desk earns a spread on large volumes rather than an
asset-backed return. They lift blended revenue and diversify earnings,
but they depend on an evolving regulatory framework (the
wholesale-market and trading rules are still being finalised) and on
counterparty credit. The Plan therefore treats trading as accretive
optionality layered on top of a contracted generation-and-storage core,
not as the basis of the investment — which is why 85% of targeted
revenue is contracted and why the trading division is scaled to the pace
of regulatory clarity.
4.4 Offtake strategy and counterparty credit
The 85% contracted-revenue target is built through a disciplined
offtake strategy that layers long-term anchor PPAs, medium-term
corporate contracts and shorter-term trading arrangements. Anchor
offtakers — large mining houses and industrials with long horizons and
strong credit — underpin the generation SPVs and the debt sizing;
corporate PPAs with data-centre, manufacturing and property customers
add volume and diversification; and the storage fleet earns availability
payments under BESIPPPP-style agreements with the National Transmission
Company.
| Contract type | Tenor | Counterparty | Role |
|---|---|---|---|
| Anchor PPA | 15–20 years | Mining / industrial (strong credit) | Underpins SPV debt |
| Corporate PPA | 5–15 years | Data centres, manufacturing, property | Volume & diversification |
| Capacity / availability | 15 years | NTCSA (BESIPPPP-style) | Storage availability payments |
| Wheeling agreement | 3–10 years | Multi-site corporate offtakers | Reach via wheeling |
| Trading contract | <3 years | Corporate & wholesale | Margin & flexibility |
Counterparty credit is actively managed: offtake is diversified
across sectors and names, anchor contracts carry credit support or
take-or-pay features, and the trading desk operates within
counterparty-credit limits and mark-to-market controls. This layered
structure delivers the bankable contracted base lenders require while
preserving the trading and ancillary upside that lifts blended returns —
the practical mechanism behind the 85% contracted target, and the reason
the platform’s core is resilient even if the trading division is
constrained by regulation.
4.1 The contracted-revenue structure
The revenue model is anchored in long-term contracts. The target
structure is 75% long-term PPAs and 10% capacity payments — 85%
contracted — with the balance from energy trading (8%), grid services
(4%) and carbon credits (3%). Average contract duration is 15–20 years,
producing the predictable, annuity-like cash flows that underpin
bankability and qualify the platform as infrastructure. Lenders size
project debt against the contracted base; the trading, grid-services and
carbon revenue provide margin-accretive upside on top.
The revenue build. Revenue scales from first solar
generation in Year 3 to over R42.8 billion by Year 10 as each project
reaches commercial operation and the trading platform matures. Because
generation and storage reach commercial operation roughly two years
behind capital commitment, the revenue follows a J-curve — modest
through the construction-heavy early years, then compounding as the
portfolio fills out. This ramp, and the contracted base beneath it, is
the foundation of the financial plan in Section 8.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Aurora Grid Renewables Holdings (Pty) Ltd.