Arbitrage

Commercial

Also known as: Energy Arbitrage, Wholesale Trading

Energy arbitrage is the practice of charging a battery when electricity prices are low and discharging when prices are high. The profit is the price spread between buying and selling, minus round-trip efficiency losses and operating costs. Arbitrage opportunities have widened significantly as renewable energy penetration has increased price volatility — solar generation pushes midday prices down while evening demand peaks push prices up. Arbitrage is increasingly stacked with other revenue streams (frequency regulation, capacity payments) to maximise total returns. RTM providers optimise arbitrage trading on behalf of asset owners.

Related Terms

Revenue Stacking RTM Round-trip Efficiency