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Key Takeaways The player that can flex around mismatches in timing, demand, or constraints often captures more value than the lowest-cost producer.
Value creation ≠ value capture. Building the “best” product or generating the cheapest supply doesn’t guarantee you’re the one who ends up with the surplus. Position and leverage in the stack matter more.
If you stare at power markets long enough, you start seeing the same pattern show up again and again: someone can create obvious value, and someone else can capture a disproportionate amount of the surplus.
That’s why I like batteries as a leadership lesson. Solar and wind energy can be very cheap to produce, and they can also be subsidized. You look at that and it feels like the renewables operator “should” win. But a lot of the time, the battery operator is the one who ends up getting paid.
Once you see that dynamic in a market with explicit rules, it becomes hard to unsee it in business.
Renewables look like the winner, but batteries get paid
Here’s the basic setup.
Solar and wind are rigid. They can only produce power when the sun is out or the wind is active. That means there are hours when power is abundant and cheap, and hours when it is not.
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