Large-scale battery storage, short-term market outcomes, and arbitrage

Stefan Lamp and Mario Samano

Energy Economics, 2022, vol. 107, issue C

Abstract: The expansion of the share of renewable energy in the portfolio mix of the electricity generation sector has accelerated the development and integration of large-scale battery storage facilities. We document charging and discharging patterns in the California market and show how the utility-scale batteries’ activity correlates with load and real-time prices during 2018 and 2019. The empirical findings are partially consistent with the optimal solution of an arbitrage maximizer, indicating that battery owners respond to price incentives only at certain hours of the day. In addition, we provide evidence that battery deployment in the years 2013 through 2017 lowered average intra-day wholesale price spreads and that current market conditions limit the profitability of batteries in this market.

Keywords: Battery storage; Electricity markets; Renewable energy; Equilibrium prices (search for similar items in EconPapers)
JEL-codes: Q41 Q42 Q48 Q55 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:107:y:2022:i:c:s0140988321006241

DOI: 10.1016/j.eneco.2021.105786

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