How energy storage systems can be used to generate arbitrage?

Due to the increased daily electricity price variations caused by the peak and off-peak demands, energy storage systems can be utilized to generate arbitrage by charging the plants during low price periods and discharging them during high price periods.

What is electricity arbitrage?

Electricity arbitrage involves the storage of energy at times when prices are low, and offering it on the markets when prices are high. This activity is justified because the price of electricity in the wholesale market varies continuously due to the changes in the demand and supply curves.

Do energy storage owners have an arbitrage profit maximization problem?

This paper proposes a stochastic formulation of a storage owner's arbitrage profit maximization problem under uncertainty in day-ahead and real-time market prices. For investments in energy storage to increase, participating in the market must become economically viable for owners.

What is the arbitrage strategy?

The present arbitrage strategy is designed for the given technology attributes (including round-trip efficiency) to store the off-peak energy when the electricity price is low and releases the energy when the price is high (during the peak demand period).

How do price differences influence arbitrage by energy storage?

Price differences due to demand variations enable arbitrage by energy storage. Maximum daily revenue through arbitrage varies with roundtrip efficiency. Revenue of arbitrage is compared to cost of energy for various storage technologies. Breakeven cost of storage is firstly calculated with different loan periods.

What are arbitrage revenue and storage technology costs?

Arbitrage revenue and storage technology costs for various loan periods as a function of storage capacity for (a) Li-ion batteries, (b) Compressed Air Energy Storage, and (c) Pumped Hydro Storage. Fig. 11 c shows the current cost of PHS per day and the arbitrage revenue with round trip efficiency of 80%.