Cross-market optimization of large-scale battery storage systems
Trading battery storage systems across different electricity markets (cross-market optimization) represents an attractive business model for their operation. In contrast to participating in individual markets, cross-market positioning not only offers additional revenue potential but also strengthens the ability to adapt to changes in the currently highly dynamic market environment.
A marketing logic was developed for and in cooperation with an innovation and technology service provider, trading a large-scale battery storage system in the balancing and spot markets. The project focused on analyzing suitable markets, and developing a rule-based method for sequential trading in various markets based on opportunity costs.
Methodology
- An overview of the electricity markets suitable for battery storage systems in Germany, their market parameters, and the creation of a market timeline.
- Listing of the players in the field of battery storage marketing in Germany.
- Development of a simplified, rule-based method based on calculating opportunity costs for cross-market positioning.
Results
Figure 1 shows the sell-and-buy positioning of a battery storage system on an exemplary day for a cross-market optimization for the day-ahead and the intraday auction markets. In the example, the storage system operates a maximum of 2 cycles per day and is first traded in the day-ahead market, whereafter it is subsequently optimized in the Intraday auction IDA1. A total of 13 quarter-hourly counter trades are executed, increasing revenues by 22 % compared to marketing solely on the day-ahead market.
Conclusion
The sequential marketing of the battery storage system on the day-ahead and intraday auction markets alone can generate relevant revenue increases. The marketing logic developed also allows the inclusion of balancing markets to generate additional revenue. There is further significant revenue potential in optimizing continuous trading, in which a single delivery window can be traded multiple times with many transactions are virtual trades without physical delivery.
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