Optimal forward trading and battery control under renewable electricity generation

Juri Hinz and Jeremy Yee

Journal of Banking & Finance, 2018, vol. 95, issue C, 244-254

Abstract: The increased market penetration of renewable energy sources and the rapid development of electric battery storage technologies yield a potential for reducing electricity price volatility while maintaining stability of the power grid. This work presents an algorithmic approach to control battery levels and forward positions to optimally manage power output fluctuations caused by intermittent renewable energy generation. This paper will also explore the effect of battery technology on the firm’s optimal trading behaviour in the electricity spot market.

Keywords: Approximate dynamic programming; Battery control; Distributed energy systems; Energy storage; Forward contracts; Real options (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:95:y:2018:i:c:p:244-254

DOI: 10.1016/j.jbankfin.2017.06.006

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