Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services

Behnam Zakeri; Sanna Syri

doi:10.1109/EEM.2016.7521275

Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services

Behnam Zakeri, Sanna Syri

Department of Energy and Mechanical Engineering

Research output: Chapter in Book/Report/Conference proceeding › Conference article in proceedings › Scientific › peer-review

42 Citations (Scopus)

Abstract

Electrical energy storage (EES) systems can offer different services in power systems, including flexibility for integration of variable renewable energy. The market value of energy storage in different power market designs should be quantified to justify business models and/or policy supports. This paper analyzes the economic potential of EES in the Nordic power market (Norway, Denmark, Sweden, and Finland) both in energy and ancillary services markets under current market conditions (2012-15). We propose a model for profit maximization of EES in different market levels, i.e., the day-ahead, intraday and regulation markets. The results introduce Finland as the most profitable area for price arbitrage in the day-ahead (Elspot) and regulation markets. According to the results, recent cross-border market couplings have diminished the price volatility in the intraday market (Elbas), yet the Danish bidding areas are the most lucrative places for flexibility solutions in this market. The actual benefits in the balancing market show higher uncertainties compared with inter-hour energy markets, but this market promises greater revenues. The aggregation of benefits from price arbitrage does not realize any storage profitable. The inclusion of ancillary services, however, suggests return on investment for low-cost, long lifetime batteries.

Original language	English
Title of host publication	2016 13th International Conference on the European Energy Market, EEM 2016
Publisher	IEEE
Number of pages	5
Volume	2016-July
ISBN (Electronic)	978-1-5090-1298-5
ISBN (Print)	978-1-5090-1299-2
DOIs	https://doi.org/10.1109/EEM.2016.7521275
Publication status	Published - 25 Jul 2016
MoE publication type	A4 Conference publication
Event	International Conference on the European Energy Market - Porto, Portugal Duration: 6 Jun 2016 → 9 Jun 2016 Conference number: 13 http://www.eem2016.com/

Publication series

Name	International Conference on the European Energy Market
ISSN (Print)	2165-4077

Conference

Conference	International Conference on the European Energy Market
Abbreviated title	EEM
Country/Territory	Portugal
City	Porto
Period	06/06/2016 → 09/06/2016
Internet address	http://www.eem2016.com/

Keywords

Ancillary services market
Battery energy storage
Electricity market
Electricity storage
Value of flexibility

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1109/EEM.2016.7521275

Cite this

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title = "Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services",

abstract = "Electrical energy storage (EES) systems can offer different services in power systems, including flexibility for integration of variable renewable energy. The market value of energy storage in different power market designs should be quantified to justify business models and/or policy supports. This paper analyzes the economic potential of EES in the Nordic power market (Norway, Denmark, Sweden, and Finland) both in energy and ancillary services markets under current market conditions (2012-15). We propose a model for profit maximization of EES in different market levels, i.e., the day-ahead, intraday and regulation markets. The results introduce Finland as the most profitable area for price arbitrage in the day-ahead (Elspot) and regulation markets. According to the results, recent cross-border market couplings have diminished the price volatility in the intraday market (Elbas), yet the Danish bidding areas are the most lucrative places for flexibility solutions in this market. The actual benefits in the balancing market show higher uncertainties compared with inter-hour energy markets, but this market promises greater revenues. The aggregation of benefits from price arbitrage does not realize any storage profitable. The inclusion of ancillary services, however, suggests return on investment for low-cost, long lifetime batteries.",

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Zakeri, B & Syri, S 2016, Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services. in 2016 13th International Conference on the European Energy Market, EEM 2016. vol. 2016-July, 7521275, International Conference on the European Energy Market, IEEE, International Conference on the European Energy Market, Porto, Portugal, 06/06/2016. https://doi.org/10.1109/EEM.2016.7521275

Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services. / Zakeri, Behnam; Syri, Sanna.
2016 13th International Conference on the European Energy Market, EEM 2016. Vol. 2016-July IEEE, 2016. 7521275 (International Conference on the European Energy Market).

Research output: Chapter in Book/Report/Conference proceeding › Conference article in proceedings › Scientific › peer-review

TY - GEN

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AU - Syri, Sanna

N1 - Conference code: 13

PY - 2016/7/25

Y1 - 2016/7/25

N2 - Electrical energy storage (EES) systems can offer different services in power systems, including flexibility for integration of variable renewable energy. The market value of energy storage in different power market designs should be quantified to justify business models and/or policy supports. This paper analyzes the economic potential of EES in the Nordic power market (Norway, Denmark, Sweden, and Finland) both in energy and ancillary services markets under current market conditions (2012-15). We propose a model for profit maximization of EES in different market levels, i.e., the day-ahead, intraday and regulation markets. The results introduce Finland as the most profitable area for price arbitrage in the day-ahead (Elspot) and regulation markets. According to the results, recent cross-border market couplings have diminished the price volatility in the intraday market (Elbas), yet the Danish bidding areas are the most lucrative places for flexibility solutions in this market. The actual benefits in the balancing market show higher uncertainties compared with inter-hour energy markets, but this market promises greater revenues. The aggregation of benefits from price arbitrage does not realize any storage profitable. The inclusion of ancillary services, however, suggests return on investment for low-cost, long lifetime batteries.

AB - Electrical energy storage (EES) systems can offer different services in power systems, including flexibility for integration of variable renewable energy. The market value of energy storage in different power market designs should be quantified to justify business models and/or policy supports. This paper analyzes the economic potential of EES in the Nordic power market (Norway, Denmark, Sweden, and Finland) both in energy and ancillary services markets under current market conditions (2012-15). We propose a model for profit maximization of EES in different market levels, i.e., the day-ahead, intraday and regulation markets. The results introduce Finland as the most profitable area for price arbitrage in the day-ahead (Elspot) and regulation markets. According to the results, recent cross-border market couplings have diminished the price volatility in the intraday market (Elbas), yet the Danish bidding areas are the most lucrative places for flexibility solutions in this market. The actual benefits in the balancing market show higher uncertainties compared with inter-hour energy markets, but this market promises greater revenues. The aggregation of benefits from price arbitrage does not realize any storage profitable. The inclusion of ancillary services, however, suggests return on investment for low-cost, long lifetime batteries.

KW - Ancillary services market

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KW - Electricity storage

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SN - 978-1-5090-1299-2

VL - 2016-July

T3 - International Conference on the European Energy Market

BT - 2016 13th International Conference on the European Energy Market, EEM 2016

PB - IEEE

T2 - International Conference on the European Energy Market

Y2 - 6 June 2016 through 9 June 2016

ER -

Value of energy storage in the Nordic Power market - Benefits from price arbitrage and ancillary services

Abstract

Publication series

Conference

Keywords

UN SDGs

Access to Document

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