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

Behnam Zakeri, Sanna Syri

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review

15 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 languageEnglish
Title of host publication2016 13th International Conference on the European Energy Market, EEM 2016
Number of pages5
Volume2016-July
ISBN (Electronic)978-1-5090-1298-5
DOIs
Publication statusPublished - 25 Jul 2016
MoE publication typeA4 Article in a conference publication
EventInternational Conference on the European Energy Market - Porto, Portugal
Duration: 6 Jun 20169 Jun 2016
Conference number: 13
http://www.eem2016.com/

Publication series

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

Conference

ConferenceInternational Conference on the European Energy Market
Abbreviated titleEEM
CountryPortugal
CityPorto
Period06/06/201609/06/2016
Internet address

Keywords

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

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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). https://doi.org/10.1109/EEM.2016.7521275