Maximizing Battery Storage Profits via High-Frequency Intraday Trading
arxiv.org
arxiv.org
The authors are observing that, if electricity prices are negative and your battery is not perfectly efficient, then you would like to charge and discharge simultaneously to get paid for wasting energy, but you can’t.
This is a silly limitation. Surely the power electronics or even just the control algorithms in a BESS could be slightly modified to consume power, get warm, and not transfer any current to or from the battery cells, effectively taking advantage of the BESS’s heat sink to sink excess power and sell that service.
More seriously, in a world with occasional negative prices, you would want your battery to be able discharge itself, without exporting power, in a controlled and power-limited manner so as to avoid overheating. And the optimization algorithms should factor this in. I wonder if real grid-scale BESS systems have this capability.
In winter yes also if its not getting to warm for you, but also heating water is easy enough. But you don't need that much hot water
Potentially also cooling down your fridge more and your freezer. But that is not that much energy.
While that works, it would still be quite a waste. It would be a lot better to save it and discarge it later
Whether the negative energy price is enough to balance wear on the system and potential noise is a different question.
This is not a common occurrence or situation, or shouldn’t be anyway, or someone is screwing up pretty badly somewhere.
But like I said before when rates go negative you will typically see it in occurrences where you have abnormal conditions (wind and solar generating at the same time) or aggressive night winds. And it does not happen long enough to need to curtail generation.
But yes, certainly poorly managed solar/wind that doesn't have good mechanisms to turn off in response to lack of demand is mainly the issue. In the future, when control systems are better, I'm sure negative pricing will be much less common.
My gut would expect it to approach $0 if full communication were possible, based on the instinct that most people would run their dishwashers if the energy cost was $0.
‘Overproduction’ in this sense is from something like a spinning generator which starts to overspin, or an inverter which oddly starts to overvolt the output for some inexplicable reason.
We currently have the situation where operators of solar farms of all sizes get a fixed amount of money for each joule they feed into the grid. Of course those people have zero interest in turning down their inverters when the sun is shining and there's already a surplus in the grid.
While they can be configured to overvolt the outputs or drive frequency higher than they should if they have the excess energy, that is certainly not a normal setup and seems pathological, frankly. Which I guess goes to your point regarding solar operators - if they have an incentive to keep pushing power into the grid even if the grid doesn’t need it, they certainly can configure their equipment to do that. But that is also a clearly screwed up situation for the grid eh? And of all the generation providers, they are the ones with the least excuse to actually do that.
It’s trickier with something with moving parts (like wind generation), where there may be some element of physical inertia or direct physical coupling to the output power. But inverters are not that.
And my understanding is that all modern wind turbines do automatic blade feathering and a significant degree of voltage/frequency regulation to avoid blowing things up ‘downstream’. So with any luck it would be a minutes at most, type situation.
Still, 90% of the problem is likely with wind farms or the baseload eh? Unless the solar operators are doing this intentionally to screw their competition.
And the same thing for residential scale is literally just a ceramic space heater running at ~1500w.
They're dirt cheap, usually have temp safety checks built in, work on a residentially sized circuit, and are available everywhere.
I needed a cheap and consistent load to do LFP battery testing, and I could spend $5,000 for a real test unit, or $21 for a ceramic heater that will do basically the same thing.
If you've already got the monitoring for the batteries/inverters, a heater is a GREAT load choice.
I'm not sure that this really is a completely off-the-shelf stove element. But obviously, the technology is basically identical to what you'd have on your stove.
A neat example of regenerative braking being important is the London Underground: they've had a persistent problem with high temperatures in the subway, of which a decent % is actually heat from trains braking. By using regenerative braking rather than putting that energy into the tunnels as heat, they can transport that energy outside the tunnels, keeping them cooler.
There are several challenges with this, safety, thermal runaway, and life cycle of the asset which has a limited amount of cycles.
Also the architecture of the system for the AC inverters and the DC side can come from very different places in the supply chain and aren’t as vertically integrated leaving you in a position where you can’t actually make this work without compromising something in the supply chain. That being said we are talking about a LOT of energy in these systems and to dissipate that much heat you’d need a load bank.
For example, if the electricity price is -28€/MWh (like today in Germany), and your battery efficacy is 80%, you could get paid 28€/MWh charging, then only pay back 22€ discharging, generating a 6€/MWh profit.
There is also the problem that your battery would likely degrade fast depending on the technology.
Either way I think people are overthinking it though.
He's just trying to burn energy because a negative rate means he's getting paid to use it.
So sure - it's great to give that energy a functional use first (ex - charge his batteries) but eventually he runs out of functional ways to use the energy but could still be making money by using it.
Enter the desire for a dummy load.
It's straight forward to add a giant resistive load that just converts electricity back to heat.
I can get 10kw heaters for just a couple hundred bucks or 1.5kw heaters for literally $20 usd. And that also switches on/off easily.
For hydro... just boiling water with a heater is going to be pretty much unbeatable if we're playing the "waste energy" game. No need to approximate it slowly with your pump motor and risk other infrastructure.
If you really wanted to be clever, your best bet would probably be to turn it into a laser beam and send it back to space. Would mimic that energy getting reflected instead of absorbed, albeit through a pretty inefficient and convoluted process.
Might make more sense to run carbon capture devices at that point, but again - in either of these cases we're back into the "it's getting pretty expensive to waste this energy" spot.
New designs store the power in batteries, but most locomotives used in the US still have a compartment filled with fans and resistors instead.
You can build this at a small scale pretty cheaply but the connection to sink meaningful amounts of power would quickly become a significant part of the expense.
You mean crypto miner.
If I buy a device for $100 that, given free electricity, will mine $500 of cryptocurrency in its useful life - I can easily lose money if I run it less than 20% of the time.
And I doubt electricity is negative priced >20% of the time.
Rather than coming up with some grand scheme, maybe it would be good if our dishwashers and washing machines could listen to the grid and activate when power cost was negative. (We may need to coordinate a bit though, so we don’t all activate at once).
If you think of it, a dryer is sort of a combination of a flywheel and a heating element, so it should be the over-provisioner’s best friend. IMO a real failure has been not taking advantage of our appliances.
I know there are some places where this happens though but it's more along the lines of the devices delaying their start until energy is cheap rather than being used as loads to shed excess capacity afaik.
This is what I meant, sorry for the ambiguity. Load the washer up and kick it off whenever energy is cheap. I don’t care when it happens other than, like, that it happens once a day, so why not defer this to the power company, right?
Also there are downsides to having clothes just sit there for hours potentially before you dry them. They can get pretty dank from the moisture and for dryers some clothes need to be removed immediately when the cycle finishes.
So it's already possible to incentivize people correctly with price signals, at least in some regions of the world. But people are not yet familiar with this. I guess that will change as the pricing between dynamic and traditional contracts keeps diverging. With a traditional contract, you are essentially paying the average evening peak price all the time. With a dynamic contract, you get access to the cheaper and even negative rates.
With enough solar panels deployed, you could still argue that they change the albedo of the Earth and therefore it's temperature.
Now to figure out how much exactly you need to take into account the solar panel absorption spectrum & the albedo of the earth.
Aside from software integration to remotely control household PV systems, is there anything else needed to curtail during negative price events?
https://www.reddit.com/r/energy/comments/1iu2kkz/solar_curta...
Anything that would really love free energy also cost a lot to build and maintain/operate besides electricity. So much that a few hundred hours of free (or even better than free) energy a year is far from enough when you need >90% uptime to make sense. Maybe it makes you go from 95 to 85%, but still clearly it's far more than there are sunshine hours.
The problem is that things that can use bulk energy productively like electrolysers, hydrocarbon crackers, smelters, AI training farms, etc. are very expensive and having them on warm standby but idle most of the time waiting for good grid weather makes for bad returns on the capital expenditure and operational costs.
Not that it matters, because the effect would be miniscule in any case.
When I first heard it, it seemed wild that they couldn't hold on for the price to go back above zero, but I guess if we're talking high frequency trading it makes more sense. They might have bought and sold many times while the price is different levels of negative before switching to charging up in preparation for the later price rises.
And the round trip inefficiency helps too.
As you know, negative electricity prices mean that someone is willing to pay you to dispose of electricity they need to generate for some reason. For example, a conventional steam-turbine-based electricity plant might prefer to just keep running for a brief period of time when demand is low, rather than subject their equipment to a power cycle, which increases their maintenance costs. There's other, dumber, examples based on stupid contracts and badly designed solar... but this example is a reasonable one that exists for good engineering reasons.
The battery provider in this circumstance is profiting from their ability to accept power when demand to dispose of electricity is particularly high. When that need goes down, they can reasonably profit by dumping that energy on someone else who is also able to dispose of the electricity. But at a lower cost. E.g. imagine an big industrial refrigerated storage facility that can consume some excess energy by supercooling their refrigerators. But they can't consume unlimited excess energy, because at some point their warehouse just gets too cold, and they don't have unlimited refrigeration capacity anyway.
So in this simplified example, the battery storage service is getting paid a lot of money to quickly absorb a lot of energy, which they then dump more slowly to the refrigerated warehouse (and similar providers) as the surplus diminishes, in anticipation of another surplus in the near future.
Oh, that's right. This is supposed to be wealth transfer.
I'd recommend digging elsewhere for conspiracy bait. This is a mild curiosity at best.
But I’m not sure that’s entirely correct, and maybe it’s time to revisit this.
Any system that is selling responsiveness as part of their service has to keep a certain amount of equipment sitting idle. That’s just how queuing theory works. So while you cannot move all server load to the coldest available zone, we should still be able to run that center near capacity and use the hottest one for all reserve capacity.
Power plants also have to deal with fines for exceeding emissions limits, but I suspect the problem here is that Bayesian analysis tells them that if a plant has to kick on early for some reason (early school release day, or another plant exceeded a maintenance window), it will still be needed for sure an hour from now, so it’s better to leave it running for 45 minutes doing nothing than to cycle it.
Exactly. There are genuine economic/engineering reasons for negative prices to occasionally exist. But in a well-designed, well-run, grid price will be negative only a small minority of the time. It just doesn't make sense to install a bunch of expensive equipment to provide this service when sufficient capacity exists from "happy accidents" like spare battery storage.
In the long run, better managed solar and wind should make negative prices a fairly rare event.
The former is already happening and useful, the latter would be a relatively simple and easy add-on that could be used to offer ever so slightly cheaper electricity.
I'm not sure: why doesn't someone 'just' put up a few resistive heaters and fans to benefit from negative prices?
It can even happen productively: "Hey, they're paying us to run the heat! Turn the glass kiln on so we can get a head start on tomorrow."
Or "Hey, they're paying us to charge our batteries! Let's charge them!"
It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!"
Whatever it is: If the demand satisfies the supply, then the supplier is satiated. And then the price can go back to something more-profitable for that supplier.
It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot).
Is it possible to build one of this heat dumping facilities in a zone where there is permanent snow? (Ignoring environmental and moral concerns.)
PS: Seriously, heating a swimming pool may be a nice application.
You could probably just boil off your water, instead of returning any?
It would be funny, to use the steam to generate electricity.
You get a lot of salt residue that you have to dispose. The usual nuclear plant tower [1] evaporates most of the water to dump heat, but returns a small part of it to avoid collecting salt. But it has to be not to hot nor too salty to avoid killing the fishes.
[1] https://www.google.com/search?q=nuclear+power+plant+cooling+... [How to I link to the images pages?!?! Google changed the format of the URL and I can't find the correct &something=xyz to make a short link to the images :( .]
Ye olde format still works: https://www.google.com/search?tbm=isch&q=nuclear+power+plant...
...and that ultimately lands at https://www.google.com/search?q=nuclear+power+plant+cooling+... which also works.
But it doesn't have to be big. A negative price is still a negative price, even on a small scale.
So, for instance: At home, I have electric hot water. I have some baseboard heaters in parts of the house (that I never actually use, but which I could use). I have central aircon.
All of these things could stand to be automated just for automation's sake, and that's something I'll probably do some day even with the fixed-rate electricity I buy right now.
With automation and price feeds, it's a programmatic no-brainer to switch on the electric baseboards on during the heating season during negative price events and get paid some non-zero amount to get ahead on the temperature game.
During the cooling season, I can probably stand to get paid to supercool the house for awhile.
And during any season: I normally run my electric water heater at a fairly low temperature because that's more efficient, but I'll cheerfully accept money to temporarily raise its temperature.
Or if I had an EV: Maybe I might normally like to keep it at 70% SoC for battery health, but if it's plugged in and the price is negative then I might cheerfully run it up to 85 or 90% or more.
So anyway, it's hypothetically pretty easy for an individual like me to dump a few kiloWatts in a useful way.
A thousand such people make it easy to dump a few megaWatts.
A million such people make it easy to dump a few gigaWatts. (And a million sounds like a lot, until one counts the eventuality of smartly-connected EVs.)
Btw, many passenger trains have something like that as well, especially in the metro or tube: the stations are deliberately built slightly higher than the normal lines, so that you can convert kinetic and potential energy back and forth.
There are negative spot prices in Europe all the time - but they are not usually negative enough to make up for the grid fees and taxes. Or they are in countries like Germany that hasn’t rolled out smart meters, so consumers have no way to access spot prices
How is it not better to discharge the batteries instead? I guess if you don't have that hardware option integrated into the platform maybe, but otherwise...
Unless you specifically design for it (specifically, with a dummy load), the efficiency of the system is inversely proportional to its ability to do this. You need a secondary system.
The power system can connect the battery terminal to in or to out, so if you switch both on at once you effectively bypass the battery. It's called shoot-through current and is generally considered a destructive process. If you can switch on and off fast enough you could limit it to a non-destructive level, but in practice most systems will not switch fast enough. They are designed to operate with the battery load, which is at minimum ~10x higher resistance than the transistor itself. In practice it is often 100s of times higher.
That's where the efficiency comes into it. If a power system is 98% efficient (pretty normal- this does not include power lost to heat in the battery itself), that means the electronics can only burn 1/50th as much power as normally passes through the system. Worse, when you put the switch into shorted position it will try to pass 50x its rated current. You need to switch much faster -certainly more than 50x faster- and that will probably put it outside its operating region.
It is relatively easy to just have a large resistor, but it is not very well suited to use battery power systems. Batteries are very low impedance, and the power system exists to transform to a lower voltage and higher current. Resistors are cheaper when they are higher voltage, so the power system is a hacky kludge.
The overall solution is just more batteries. Oversupply is a transient problem and always will be.
Many multicell BMS already have this kind of "power shedding" capability. They use it for cell balancing - to equalize voltage between cells with slightly different characteristics. This is desirable despite the power waste, because it reduces wear, increases charging efficiency and allows battery packs to last longer.
Some battery packs are also designed to be able to dump enough power into heat to be able to keep the batteries warm during extreme cold.
Similarly, the heatsinking capacity of the battery is designed for charging/discharging losses (say 5% of charge/discharge power).
Modern water heaters will keep temp for a shockingly long period of time.
Water needs a lot of energy to cool or heat, concentrated at a district, you could easily absorb a lot of energy at negative prices.
The point is all this stuff costs money to build, money to maintain, so if you don't use it most of the time the time you do needs to be incredibly valuable.
They are about as close to an ideal load as one could imagine.
And capacity is easily expanded with a water tower. You can scale the total thermal energy stored and the efficiency of that storage by simply building a very large water tower. You don't even need special insulation because the water insulates itself.
> You'd pay a lot of money for a rarely used asset
Assuming you've converted over to district heating and cooling, it'd be frequently used as climate control for surrounding buildings.
> that has to be replaced by something else most of the time
What? No. District heating is the most efficient way to provide climate control, bar none. The only thing that needs to happen is setting minimum and maximum temps. Maintain the minimum temp and when negative power price events hit heat to the maximum or cool to the minimum.
And if you want to get super clever, part of your storage can be sand which can store huge amounts of energy.
> because people want their heating to be reliable.
District heating/cooling is as reliable as plumbing. That's because that's effectively all that it is. It's super reliable. If the incoming water is 60C or 90C, it doesn't make too much of a difference in terms of heating a home.
It's a proven tech. Many universities use it because it significantly reduces the heating and cooling cost for their buildings. My own city uses district heating in the downtown to great effect.
It'd take a far amount of math to figure out if that tips it over though I don't feel like tackling haha.
Heating water, cooling water, pumping water, charging batteries, running power hungry machines.
It's half century old tech and usually the only thing missing is a financial incentive to do so.
I had to go search my bookshelf for this one:
"There has been an increasing awareness among engineers of the last two decades that machines can perform a useful purpose in many applications, even though their characteristics do not conform to the orthodox standards of goodness. The main objective of the engineer is to make money -- to exploit economically the physical properties of materials. Economic considerations, however, do not stop at the first cost of an article, nor at the running cost, but extend to everything connected with that article in the situation in which it is to be used."
This is one of those efficient market things where you need to manage the market in order that wasteful things happen sometimes... but that waste is an opportunity.
If you and your competitor are both in the business of dumping energy into heat, you're going to compete with each other for access to that money.
Then one of you is going to try to find a way to make _more_ money with that energy and find something quickly scalable with not-too-high idle overhead costs to do with that energy besides just flowing through a resistor.
Negative prices are a sign of an inefficient market or just the lag time between a changing landscape of resources and someone to utilize them.
If there's a free resource someone's going to figure out how to use it, just let it hang out for a while and the problem fixes itself.
Especially with solar energy, this is just going to be a thing. There's a certain balance where overprovisioning is cheaper than storage and so you just do that. Then you wait for industry (or consumers) to figure out how to take advantage of the intermittent cheap energy.
Yes, exactly.
Which reminds me of the occasional story about how one native group or another was so in tune with nature, because they used every part of the (insert important animal here).
Modern economies obviously use all parts of the animal, for exactly the reason you outline.
> Especially with solar energy, this is just going to be a thing. There's a certain balance where overprovisioning is cheaper than storage and so you just do that. Then you wait for industry (or consumers) to figure out how to take advantage of the intermittent cheap energy.
Yes, though you also need to make sure that regulations don't get in the way. Or at least not too badly.
One example I can think of is forcing utilities to charge people by net-metering, forcing the utility to implicitly pay the same price for electricity as they charge. We don't do that for eg used car salesmen.
A large proportion of the cost of consumer electricity is distribution built in to the per kWh cost. Their buy price needs to be lower than their sell price. I think most people would be surprised by how much of the cost of their electricity is incurred between the power plant and their home.
So one solution is to incite demand (with negative rates) for folks to ramp up their use of electricity (into e.g., a dump load resistor bank), bringing demand back in line with supply, and bringing the operating frequency back under control.
I hate the waste, agreed. But it would be irresponsible of the operator to bank that extra supply energy into the momentum of spinning things owned by the consumers just so they could pull it out later by intentionally under-supplying. E.g., an aquarium's big water pumps designed to spin only so fast or produce so much pressure might not like being operated at 110% the rated speed at random times of the day.
related links:
https://fnetpublic.utk.edu/frequencygauge.html (you can watch the grid frequency fluctuate in real-time, here!)
> (I know people who have had their AC turned off during heat waves and were not very pleased)
I suspect they probably agreed to pretty harsh control in the name of cheaper electricity, but actually were only willing to tolerate relatively small amounts of loadshedding. I wonder whether better contracts can help align expectations here in the future. Eg allow the electricity company to set your aircon's thermostat up to 3K warmer (or something like that), but not turn it off completely?
Those contracts mean the person producing the power is still incentivised to do it even with negative prices.
The yield you could make from batteries in the UK dropped from double digits to 2% in 8months once some hedge funds figured out how to build and bid (or commission companies like my employer) batteries in the UK short term reserve market.
There are a few firms in northern Jutland and London specialised in this sort of trading.
Huge part of the reason why negative prices exist in the first place is separation of generation and transmission. With pay-as-clear model negligible-variable-costs generators (i.e. renewables) can bid at zero and pump more into the grid than the local segment can drain, requiring artificial balancing sinks. However, the cost of artificial sinks fall on the grid as transmission costs and are not reflected in the wholesale market.
Another interesting aspect is that as grid demand fluctuates, a lot of cables are under utilized at least some of the time. Which means there is plenty of capacity for charging batteries provided there is excess generation and cable capacity. A lot of that power currently gets discarded instead. Batteries allow better use of this excess power. And having a lot of local battery means that cable capacity can be freed up as well when needed and then recharged when demand reduces.
And then finally battery prices are coming down. With sodium ion cell production ramping up in several places, things could get quite a bit cheaper. These don't depend on scarce metals or materials. And they last quite long as well (relative to NMC).
... and a serious issue should one of the few large manufacturers or remote-control dispatcher/trader companies get hacked. The outage in Spain a few weeks ago was just a small warning, probably caused by a technical malfunction. But now imagine this being used as a side track in an act of war? The first day of the Russian invasion of Ukraine was accompanied by the hack of Viasat satellites, which led to 5.800 wind turbines shutting down due to a lack of remote control capabilities [1]. Now imagine the large Chinese inverter and power bank controller vendors that often enough just white-label for other brands? That's a whole lot of a different game now.
If everyone agrees, you can use grid frequency/phase to coordinate, and not a separate realtime communication system. Grid interactive demand/response is a proven way to manage supply and load.
When your section of the grid is stressed, supply power or abstain from charging; when your section of the grid is abundant, charge.
Coordination is useful too, of course; predictive charging is helpful, and you wouldn't get that only by monitoring the grid; you also want to know somehow that a supply or load is scheduled to be added or removed at time X, or was unexpectedly removed and will not be reconnected for some time. And the system operator would want to know about capacity in many dimensions.
Grid frequency cannot be used at scale to coordinate energy production as a result, because the grid elements themselves don't know why the frequency is going down on its own or where the cause is. For that you need to monitor the country or region crossing to see where energy is flowing and aggregate this.
Drop a couple gigawatts from the production side, for example, all at once and the frequency will immediately drop, only not crashing due to the mechanical inertia of the large power plants. Immediately, electricity and physics will lead to current balances redistributing and automated systems will kick in (e.g. gas peaker plants ramp up in a matter of seconds, battery storage kicks in even faster). But when too much capacity gets dropped, the available spare capacity isn't enough and eventually the first lines will trip due to overcurrent or frequency deviation. That is what happened in Spain, made worse by the fact that inverters don't have mechanical inertia and so immediately more inverters dropped out for safety reasons as the frequency sagged too much for their protection circuits. The inverse, adding a couple of gigawatts of consumers, causes the same effect.
That's also why very large consumers such as smelters must contact the local electricity distributor in advance before any load change - dispatch must know precisely when the consumer will drop or add load, so that other plants can be regulated up or down to avoid too much of a sag or hike in frequency.
There's a separate Scandinavian grid for East Denmark (Zealand) and north.
(And the British Isles are their own grid.)
[1] https://de.wikipedia.org/wiki/Verband_Europ%C3%A4ischer_%C3%...
[2] https://www.entsoe.eu/news/2025/02/09/entso-e-confirms-succe...
The lesson here is that distributed power is a good thing in war time scenarios but you might want to pay attention to digital security. Central power generation becomes a tempting target.
Now the good news with Chinese stuff is that a war is not imminent and we have the benefit of hindsight and can do something about that.
We are and we have been at war with China (and Russia and North Korea, fwiw) for many years at this point. The ongoing cyberwarfare from either country is more than enough to warrant this label, the problem is we were and are governed by chickens who refuse to accept the reality we are living in and still think that kowtowing to China's every demand will save our economies.
How is power discarded? I would expect peaking generation to be cut back or perhaps even base load plants can reduce output. (AFAIK "base load" means they are expected to be kept operating continuously whereas "peaking" is designed to start up when needed and shut down when not.)
It isn’t, not at scale in any traditional sense.
As for baseload. It's one of those waffly terms that's rarely specified in GW that is needed. Which as it turns out is far less than we used to have given that much of it was replaced with wind and solar over the last decade or so. The real question is how low can we go with this stuff before we need some more solutions. Some would say all the way but the consensus is that the last 5-10% might get very hard and costly.
Either way, having some peaker plants on stand by ready to spin up over the course of hours/days while batteries slowly deplete is probably a good short term compromise. Replacing spinning mass (fly wheels) with batteries seems a particularly popular and very cost effective use for batteries.
Nor should they. People don't want to be cycling their batteries and reducing their life. This use case would be better served by batteries that are designed for that purpose instead of being designed to be light for a vehicle.
More battery cycles just costs money. For the right price, I'd do it.
But more than that: I don't want to be stranded without power in my vehicle because someone in the electric grid made poor power management decisions and decided to offload that decision to consumers.
That said, most EV incentive programs use around 10% (often less) of an EV battery capacity so the actual effects are barely noticeable.
A price that can be measured in money. How much more does it need to pay to be worth any extra hassle?
So in a sense it is just money. Money is hassle, fundamentally. It's a hassle to make it and you spend it to save other hassles.
Another factor is that not all charge/discharge cycles are the same. Going between 60% and 80% five times is a lot lighter on the battery than going between 0% and 100% once. Which pairs great with EV batteries, because their batteries are deliberately oversized compared to average use to account for uncommon events.
This is how most Time-of-Use metering already works. The driver sets a minimum battery percentage to charge immediately (eg 40% range, enough to reach the local hospital), and then schedule a time when the car should be fully charged (eg 80% by 7AM). The software just Does The Right Thing, using the same prediction and bidding algorithms as stationary batteries.
The search term is "V1G" (a cheeky reference to unidirectional V2G).
As with batteries, it would require some work with the utility companies, so that they can signal the best times to power on/off, and offer the appropriate financial incentives to do so. We are already doing that in some way with peak/off-peak pricing, but it doesn't help with high frequency, unplanned variations.
Some also work (usually only for a short amount of time if profitable), most don’t really work at all for various technical reasons (lookahead bias, model doesn’t account for slip/trading costs or assume infinite liquidity or a portfolio too large to realistically rebalance etc.) and some again work, but have unfavorable risk-adjusted return profiles compared to simpler strategies.
They do not last forever, have inefficiency/loss (order(s) of magnitude larger than slippage/fees) etc.
It can seem like the Wild West with many opportunities for arbitrage, but there are practical challenges.
Many countries prefer to improve energy infrastructure through private initiatives, and this is one of the incentives as I see it:
If you get a foothold, profitable trades can be made with only limited competition.
This should also help decrease volatility of electricity-prices, as predictable fluctuations gets evened out from arbitrageurs.
And its not like they can just do that and get rich. Its particular for/with battery storage systems.
Basically making battery storage systems more interesting for investors to invest into.
I've had a few chats with some folks working on battery startups, and I think the more conventional approach is to forecast prices + run an optimization to find optimal storage decisions. You could measure the system's performance by looking at how well the algorithm does when it has perfect information about prices (obviously, when you have perfect information about prices it is trivial to optimize the battery).
I'd also be quite interested in strategies for grid-scale BESS trading in the US' real-time markets. Do you know more about it, or could forward me to someone who would be willing to talk about it? ;)
I'd be happy to provide you the names of the firms I spoke to over email, if that would be of use!
It also seems like a sensible idea to publish details and theories about an idea, not necessarily a finished trading product though ;)
2) It's worth more to your career
3) Selling a strategy to a hedge fund as a stranger is, unless they hire you, probably a good few months of umming and ahhing and paperwork.
that line is doing heavy lifting. sounds insane until you look closer they batch out embarrassingly parallel, lowdimensional problems no live latencies, no network I/O, no grid API jitter. just hammering a static dataset in memory. real markets stall, disconnect, price slippage, queue delays. none of that here. so yeah, 24 million looks cool in the abstract, but under the hood it's just cleanroom compute; feels like they optimised the benchmark more than the actual system
An EV could be good for this sort of thing, but I guess it would have to sit around at less than 100% charge, to have the capacity.
<absolute max that you are willing to charge your battery to> - <minimum that you are willing have your battery sitting at>
The "virtual power plants" are the closest thing to this idea that is actually done in practice. That's individuals who own batteries joining some collective that then sells to the grid the ability to reduce demand a bit. Tesla did a pilot program with its Powerwalls iirc.
Tesla Electric customers report making as much as $150 a day https://electrek.co/2023/07/05/tesla-electric-customers-repo...
In my country for home consumers the difference between day/night rates is 10-20c/kWh. With spot pricing I can see it working to cover the post commute power spike - but you're effectively doubling your commute discharge rate and pushing charge levels to suboptimal levels.
Batteries might work but at 80% capacity they are worth significantly less than new - both in terms of utility and resale value.
Maybe if battery range gets extended so far that even at 80% capacity it's an overkill - like 1000mile batteries - I could see myself doing something like this - but at current ranges and charging setups - I'll skip the few dozen euro a month.
The caveat to this market is who knows how much of a premium you'll end up paying to replace the battery given that it's attached to a certain model of car.
Are they ? I keep hearing this but in practice the price of an EV is still dominated by the battery pack and the movement in EV prices is anything but exponential. China started pushing out the affordable EVs but that's because they are using less efficient/cheaper chemistry and even with better packaging they are significantly less energy dense.
I've seen Toyota announce 1000 miles solid state battery - if battery tech was dropping exponentially that should be cheaper than ICE in a few years - I would take the opposite side of that bet.
China's LFP battery packs, as of 2022, have a density of 160 Wh/kg [1], which matches the NMC battery pack in a Model Y from the same year [2] (Note: The Model Y battery pack was no doubt designed and built earlier given that it was already in a product). I.e. is isn't really the case that the batteries they are putting in are less efficient than the earlier iterations. Though you could have even high energy density batteries if you didn't switch to LFPs.
I'm not sure we are racing towards 1000 mile cars, because I'm not sure it's the case that there's a huge market for 1000 mile cars, and there's limits on density short of technological leaps that would make such vehicles heavy. I think we're rather more likely to see 600km cars just keep dropping in price instead.
[1] https://insideevs.com/news/576870/catl-third-generation-ctp-...
The problem, however, is that a lot of plugged vehicles are required to guarantee a meaningful amount of firm power/energy capacity and owners typically do not want to sacrifice a lot of flexibility when they rent out their batteries to provide such services.
Furthermore, as you can see from the replies, many are scared about battery degradation. Because of this and due to the fact that reverse charging is not possible for most vehicles, this schemes are often restricted to delayed charging which further limits revenue potential.
However, using arrays of old car batteries as stationary batteries is a very viable idea that, in my estimation, will lead to a significant growth in installed BESS in a couple of years.
EMHASS is an interesting tool to perform the optimisation.
I have a large array (12.8kWp east/west split) but a low export limit of 5kW. In the winter it's charging overnight at 7p per kWh (Intelligent Octopus Go) and then using that stored energy during the day to avoid importing at peak rates, and in the summer it makes sure to discharge most of the battery before the peak generation hours so that battery charges from power which would otherwise be curtailed (discharge to minimise import on my SolarEdge system, but charge from clipped power would also work).
Tldr: most applications of free energy have capital costs that far outweigh the free energy harvest potential.
Imagine software that could run on EVs, Powerwall-type batteries, computers/tablets/smartphones, and so on, which would automatically charge and discharge for passive income. Essentially algorithmic trading, but with power instead of stock. You'd just have to configure any necessary time ranges and charge percentages, e.g. maybe your EV needs to be at 25% by 8am and again by 5pm on weekdays in order to make your daily commute.
Maybe some EVs will start to come with built-in crypto miners to burn negatively priced power when the battery is at capacity. Maybe Lyft/Uber and Waymo/Cruise will take advantage of it by increasing and lowering rates based on the price of power (if they don't already).
And we already have energy provider which provide a tarif for exactly this.
The only idea i hate is the mentioning of crypto. Not only is it waste, it converts the energy in heat which needs to get disipated and potentially wastes even more energy to get this heat away from the current location (ac).
The FERC passed Order 2222 which is a bigger step in that direction by forcing the regional wholesale markets to allow aggregators to aggregate up the smaller stuff that is normally considered noise.
The industry has a ton of jargon (literally thousands of acronyms amongst the US regional markets) and in many cases there are 8 terms that mean the exact same thing.
It would be a bit weird but you could have your home supply at a fixed-ish rate and your EV on a separate meter riding the raw market.
If you can prevent too much cheating.
Also large industrial consumers have been participating in similar approaches for decades. See the crazy clever trading schemes that Enron used to do fraud and drive up prices.
Would there be any expected problems in doing such distributed power storage on a very large scale around the grid that you'd have to account for? Perhaps issues with synchronization, power flow or the possibility of large scale drops in avaialble stored power at times?
https://www.tesla.com/support/energy/tesla-software/autobidd...
Obama set this org up as a senator to help bring lithium ion batteries supply chain to the US and it since evolved into the trade association for all things batteries.
That's a much more complicated problem. On an energy market, you have only one price to look at, and the battery operator can always buy, sell, or hold energy. The article here talks about optimizing this problem at 5-minute to several-hour intervals.
If you drop excess power into desalination, however, now you have two prices to worry about: energy and water. I also doubt we have 5-minute spot markets for water, so the operator must probably commit to some medium-term water delivery regardless of price.
This means that a desalinating firm takes on much more risk. This might still be profitable, but it's a long-term play based on a deep model of expected energy prices (i.e. knowing that energy is "always" almost free at noon in summer) rather than short-term time-shifting.
Why couldn’t it just be a giant heating element and some sort of steam condenser at the top and some way to flush it periodically?
It might burn some laughable 3kWh per kg of water, but who cares? every water utility on the coast could add a few megawatts of tea kettles and get opportunistic little splashes of water in volumes small enough they can probably already handle them and the brine discharge would be so small, disperse, and infrequent it’d be easier to deal with, and it’d basically cost nothing
Even free power would likely not be worth using if it was sporadic, and it’s extremely energy intensive. So that really is saying something.
Why would anyone give them money if they were just going to throw up their hands and go ‘well, nothing we can do I guess!’.
There is of course the risk that the money gets burned instead of more money getting made, which is the risk in risk/reward.
Rent seeking type behavior tends to happen when there are no obvious ‘green field’ type endeavors to invest in. Or when risk appetites are trending negative.
Note - many of those people with money that want to use it to make more money are retirees, pension funds, etc.
Poverty and misery in the world are mainly caused by this kind of mechanism.
On the other hand if prices are high, and someone has sells electricity that was bought when prices were close to zero, then the cold people will get warm for cheaper than if there wasn't a battery.
Sorry, but you really make no sense.
What makes this application of this social regime so different from e.g. food or medicine?
In case of some failure of the system you're proposing, the prices would skyrocket, the poor would not get power at all, and the rich would have power all the time but for a very high price. Economically speaking, that's great for investors in batteries and supporting systems, socially speaking, it's a horible world to live in. And the system is very unstable already, in portugal it already failed horribly not long ago.
i.e. if we want to avoid food shortages, we need to overproduce the raw goods and therefore waste some. Transporting and transforming those raw goods into food that someone can eat still costs money, it's not just so farmers can get paid. We probably should still actually make sure no-one goes hungry, but that does actually involve some cost and effort on the part of the government, and the challenge there is mainly political elements who don't like the idea of someone getting something for free.
In the short term adding more batteries may allow someone to generate income using this strategy but long term what it will do is push electricity prices down and prevent power generation from being overwhelmed. As the battery "market" gets crowded profit margins will fall and everything will reach an equilibrium.
This is a great demonstration of how capitalism works and why it's beneficial.
(And the kind of optimisation that happens with this kind of paper is really in the margins stuff. It generally helps the predictive power of the grid, and usually doesn't make much money once more than one group starts doing it, since it's pretty cheap to run and the margins shrink quickly)