Abstract
This paper explores whether negative electricity prices can change the rationale that efficient energy storage devices are more economical for arbitrage in electricity markets. An established model algorithm to determine the maximum available arbitrage revenue and optimum schedule of electrical energy storage (EES) operation is used to simulate storage with a time-series of electricity prices which includes some negative prices. Our results suggest that at any likely frequency of negative electricity prices, inefficient EES is not encouraged, and can only be encouraged for EES devices with very low energy capacity to power ratios.
Highlights
There has been a growing interest in negative spot prices for wholesale electrical energy and the impact they may have in providing additional revenue for electrical energy storage (EES) operators.One revenue stream for EES is from energy arbitrage; buying and charging a storage device at times of low-cost electricity and discharging and selling it at a later time period at a higher price
This paper considers whether the rationale to have energy storage devices with higher round-trip efficiencies is valid when subject to negative electricity prices
If the period during which negative electricity prices occur is sustained long enough, so that the efficient energy storage device becomes fully charged whilst the negative price period is still available, it is possible for an inefficient device to generate a larger revenue
Summary
There has been a growing interest in negative spot prices for wholesale electrical energy and the impact they may have in providing additional revenue for electrical energy storage (EES) operators. One revenue stream for EES is from energy arbitrage; buying and charging a storage device at times of low-cost electricity and discharging and selling it at a later time period at a higher price. All energy storage devices suffer some sort of energy penalty (round-trip efficiency loss), which is dependent on both the technology and manner of operation. The price uplift must cover the round-trip efficiency losses, as well as operation, maintenance and investment costs of the energy storage device. No researchers previously have considered the effect of negative electricity prices. This paper considers whether the rationale to have energy storage devices with higher round-trip efficiencies is valid when subject to negative electricity prices
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