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Comment by ic_fly2 | Hacker News Reader

I have programmed batteries / algos to do this in some European markets. This is being done right now.

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.

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Are/where you already trading at a second to sub-second level on the continuous intraday markets? How did you backtest your strategies then, if so? Or is backtesting, e.g. for parametric extensions of the optimization, not yet quite relevant?

At least the grid is better off and it’s not all approximately zero sum…

I'd make the same argument for the other markets they operate in.

The REIT ones e.g. are much less clearly positive than this and e.g. the variance swap and co. folks at least have the decency to be so exotic that nobody cares either way.

That's a very bold statement.

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.

Sometimes the efficient market happens to you (and that's good)

That’s yield over what base?

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