Interviewer view · keep this screen to yourself

Standard: Rijnstroom Energie: should it build a grid battery?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Rijnstroom Energie, a Dutch utility, is considering a 100 MWh grid battery. Should it invest?

Format note: Difficulty: Standard. Format: candidate-led, with interviewer dialogue. Industry: Energy. Region: Netherlands. Interview length: about 30 minutes. The company is fictional and all figures are illustrative.

2. Answers to clarifying questions

Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.

If asked: How big is the battery and how is it used?
Answer: 100 MWh; it can charge and discharge fully about 300 times a year.
If asked: How does it earn money?
Answer: By buying power when prices are low and selling when high (an average spread of EUR 60 per MWh), with 85 percent round-trip efficiency, plus about EUR 2 million a year for grid-balancing services.
If asked: Cost, life, and cost of capital?
Answer: EUR 20 million to build, 12 years of life, 8 percent cost of capital.

3. The hypothesis a strong candidate states

Listen for an early, testable guess like this one. It does not need to match word for word.

Battery returns depend on price spreads that shrink as more batteries are built. My hypothesis is that the project pays today, but the grid-services income and future spreads decide whether it is a good investment.

4. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Yearly income versus the EUR 20 million cost
- Trading income: size x cycles x spread x efficiency
- Key: Grid-services income
- Payback and NPV
- Sensitivity to spreads and service prices

5. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Trading income
What a strong candidate does: Candidate: "100 MWh, 300 cycles, EUR 60 spread, 85 percent efficiency." (A simplification: applying the efficiency to the spread is close enough for a first estimate.)
Trading income (EUR a year): 100 × 300 × 60 × 0.85 = 1,530,000
Step 2: Total income
What a strong candidate does: Plus EUR 2 million from grid services.
Total income (EUR a year): 100 × 300 × 60 × 0.85 + 2,000,000 = 3,530,000
Step 3: Payback
What a strong candidate does: Cost divided by yearly income.
Payback (years): 20,000,000 ÷ 3,530,000 = 5.67
Step 4: NPV
What a strong candidate does: Interviewer: "At 8 percent over 12 years, each EUR 1 a year is worth about EUR 7.54 today." Candidate: "Then NPV is:"
NPV (EUR): 3,530,000 × 7.54 - 20,000,000 = 6,616,200
Step 5: Curveball: spreads narrow
What a strong candidate does: Interviewer: "Many batteries are being built. Spreads may fall to EUR 40." Candidate: "NPV becomes:"
NPV at a EUR 40 spread (EUR): (100 × 300 × 40 × 0.85 + 2,000,000) × 7.54 - 20,000,000 = 2,770,800
Step 6: And if grid-service prices also fall
What a strong candidate does: Candidate: "If grid-service income also falls 30 percent, the project loses value."
NPV with both falls (EUR): (100 × 300 × 40 × 0.85 + 2,000,000 × 0.7) × 7.54 - 20,000,000 = -1,753,200

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Invest, but only after locking in part of the grid-services income. First, at today's prices the battery pays back in under six years with an NPV of about EUR 6.6 million. Second, it still creates value if spreads fall to EUR 40, but not if grid-service prices also fall 30 percent, when NPV turns negative. Third, grid services are the most uncertain and the largest part of income, so a multi-year contract with the grid operator for part of the capacity would remove the main risk. Build if such a contract covers at least half of the grid-services income.

Risks a strong answer names: Battery capacity fades over time; Market rules for grid services may change; Grid connection fees and operating and maintenance costs, left out here, lower the return.

Next steps: Negotiate a multi-year service contract with the grid operator; Get fixed-price quotes and warranties from two battery suppliers.

Strong versus weak

A strong answer

Asked for the drivers, built income from them, used the given annuity factor for NPV, and tested the two uncertain prices.

A weak answer

Called batteries "the future of energy" and approved the project without checking what happens when spreads fall.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.