Fiji Energy Storage System Peak-Valley Arbitrage Solution

What is Peak-Valley price arbitrage?

1. Peak-Valley Price Arbitrage Peak-valley electricity price differentials remain the core revenue driver for industrial energy storage systems. By charging during off-peak periods (low rates) and discharging during peak hours (high rates), businesses achieve direct cost savings. Key Considerations:

How energy storage systems can be used to generate arbitrage?

Due to the increased daily electricity price variations caused by the peak and off-peak demands, energy storage systems can be utilized to generate arbitrage by charging the plants during low price periods and discharging them during high price periods.

What are energy arbitrage battery storage strategies?

These are some of the most common energy arbitrage battery storage strategies: Time-of-Use (TOU) optimization: Relying on predictable daily price patterns, TOU optimization strategies involve charging batteries during off-peak hours and discharging them during peak hours when electricity demand is higher.

How does energy storage cost affect arbitrage revenue?

As shown by the three curves, when the loan period is more extended from 5 years to 20 years, the revenue is increased, which allows for a higher breakeven cost of capacity cost of the energy storage plant. However, when efficiency drops, this decreases arbitrage revenue such that the breakeven capacity cost also decreases.

How can energy storage technologies be analyzed for maximum profitability?

Based on the above arbitrage revenue and capacity costs, the potential selections of energy storage technologies can be analyzed in more detail for maximum profitability once breakeven costs are achieved via attainment of technology readiness and/or system cost reductions.

Can arbitrage compensate for energy losses introduced by energy storage?

The arbitrage performance of PHS and CAES has also been evaluated in five different European electricity markets and the results indicate that arbitrage can compensate for the energy losses introduced by energy storage (Zafirakis et al., 2016).