Bimergen Energy Corporation (BESS): From Stranded Power to Scalable Profits
Article #12
Summary
Roughly 60% of the current share price is in cash, leaving little value assigned to a business approaching a meaningful revenue and cash flow inflection.
Each 100MW project can generate meaningful earnings with ~50% margins, supported by contracted revenue floors and upside participation.
Projects are funded with debt, mezzanine, and tax equity, allowing BESS to scale with minimal balance sheet risk at the parent level.
The company anticipates $20M in development fees over the next 12–18 months, with initial operating cash flow beginning in late 2026.
BESS has A 2GW+ project pipeline, and a path toward 4GW, providing a clear runway for multi-year growth in earnings and valuation.
Intro
We all know by now that data centers are popping up everywhere there is access to water, cheap power, and strong data infrastructure. Power has become one of the critical bottlenecks in this business, but it has also highlighted just how valuable access to power really is. At the same time, much of the green energy buildout over the past few decades has resulted in a significant amount of what is known as stranded or curtailed power, the difference between power supply and demand. This power has been a major source of cheap energy for bitcoin miners.
Source: Investor Presentation
But what if there were another way to profit from stranded power at these renewable sites, and even at traditional power generation facilities? Many power plants have excess capacity at certain times of the day, when energy prices fall, followed by predictable periods of higher demand when electricity prices rise. This dynamic creates an opportunity for stationary battery storage, often referred to as Battery Energy Storage Systems, or BESS. Fittingly, Bimergen’s ticker reflects exactly what it does, Battery Energy Storage Systems, BESS.
BESS began as a solar project installer but pivoted to battery energy storage systems in August 2024 after selling its solar portfolio for nearly $20M to fund the transition into a pure-play BESS business. This shift led the company through an extensive due diligence process evaluating numerous opportunities in the space. Ultimately, the company met and brought on Cole Johnson as Co-CEO, who had been developing a portfolio of projects that BESS has since acquired. Our understanding is that this portfolio represents the bulk of the company’s near-term projects in Texas and explains Mr. Johnson’s significant ownership stake.
The share price dramatically declined following a $13.6M capital raise tied to the company’s uplisting from the OTC to the AMEX. As part of the raise, the company also issued approximately 3.4M warrants with a $5 exercise price. While the stock price reaction was quite negative, the raise meaningfully strengthened the company’s balance sheet. With only about 7M shares outstanding today, the company now has roughly $1.80 per share in cash and expects to burn approximately $5M this year, providing at least a two-year runway to bring projects online.
BESS works with three battery partners and remains largely agnostic as to which batteries are used, selecting the best solution for each project. The company’s role is to install and operate the systems, creating a straightforward model, purchase energy when prices are low, store it, and sell it when prices rise. While this is not a new or particularly complex business model, what makes the company compelling to us is the combination of valuation, project pipeline, time to cash flow, and the lack of capital requirements at the parent level, all of which we will discuss further.
To support its growth, BESS has secured up to $250M in mezzanine financing from two partners. $50M from a subsidiary of battery partner Rely-EZ, which has already contributed $10M to initiate early projects, and $200M in capital commitments from Cox, a leading European energy generation and transmission company. Together, these commitments unlock up to $1B in senior secured debt to fund total capital expenditures across the planned BESS systems. In addition, the company recently reached an agreement with the primary funder behind Eos, another battery partner, to help finance those deployments. In our view, this positions the company well to advance its project pipeline and create shareholder value over the next several years.
A profitable solution for curtailed power
The problem BESS is trying to solve stems from how power grids are designed. Utilities must build their systems to handle peak demand, not average demand. By definition, this creates periods where excess generation capacity goes unused, while at other times demand may meet or even exceed total available supply. Like any market, when demand exceeds supply, prices spike, and when supply exceeds demand, prices fall.
This dynamic is especially pronounced in energy markets, where there are predictable intraday swings driven by supply and demand. In energy, this concept is known as the “duck curve,” illustrated in the chart below.
Source: Investor Presentation
The chart on the right highlights the issue using solar energy as a reference, though the phenomenon exists across all forms of generation, albeit to a lesser extent. Solar amplifies the effect because it produces the most power during peak sunlight hours, which does not align with peak demand. As a result, between roughly 10 AM and 2 PM, demand falls while generation remains flat or, in the case of solar, increases. This widens the gap between supply and demand, creating the characteristic “duck curve,” which represents net load throughout the day. The multiple lines on the chart show this trough deepening over time, a trend management refers to as the “deepening of the duck curve.”
This deepening creates an opportunity to buy power when it is cheap during the day and sell it back to the grid when demand, and prices, are higher. The duck curve is, in many ways, a natural setup for energy trading. While energy trading has had its bad actors, Enron being the most infamous, the practice itself provides a real service. Traders act as incremental demand when natural demand is low and as incremental supply when demand exceeds capacity.
