Energy arbitrage involves buying power at times of low energy prices i.e., during off-peak hours. It is then stored and used when grid electricity prices are at their highest utility hours. Yet, you can save energy if it doesn’t come for free. Energy arbitrage is the most convenient way to optimize energy round-trip efficiency. The basic strategy is to buy when prices are low and either use (or sell) them at the highest rates.

Energy costs are going up, while the installation cost of energy storage systems is declining. Thus with Behind The Meter (BTM) energy storage, more and more electricity customers can seize the opportunity. Many BTM energy storage systems are already in use for backup power and load management. But few of them are used for energy storage arbitrage.

Energy Time Shifting Arbitrage

The mechanism for electric energy time-shift is to purchase inexpensive electrical power when price or system marginal costs are low, store it in the storage facilities, and then transform the stored electricity into usable form during a later period of higher prices.

The storage system provides similar time-shifting functions. It can store up and save excess energy production from renewable sources such as the wind or photovoltaic (PV) that would otherwise be curtailed by a wholesale electric utility firm.

Must Read: What is Energy Imbalance Market (EMI)?

Benefits of Energy Arbitrage

Here are some benefits and uses of energy arbitrage:

  • Maximizes income: It allows utilities to make the most possible profit by buying low and selling high.
  • Boosts the use of renewables: Energy arbitrage has become an increasingly pivotal strategy for redistribution to enhance the utilization of renewables and achieve high returns.
  • Helps utilities overcome intermittency: Adding storage to renewable resources such as solar and wind enables grid-tied battery systems which help overcome intermittency problems.
  • Improves grid stability: Services provided by grid batteries include many different functions to help maintain the stability of the grid. Batteries can achieve a balance of generation and consumption, and control or regulate voltage and frequency.

Recommended: What is Energy Efficiency Rating?

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Elliot is a passionate environmentalist and blogger who has dedicated his life to spreading awareness about conservation, green energy, and renewable energy. With a background in environmental science, he has a deep understanding of the issues facing our planet and is committed to educating others on how they can make a difference.

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