Concepts & Background
Welcome! This section covers the basics you'll need to understand energy storage optimization in power markets. Whether you're new to the scene or a seasoned pro looking for a refresher, these concepts will help you get a handle on your energy storage projects.
What's Inside
- Power Markets: A look at how electricity is bought, sold, and priced.
- Storage Systems: The tech behind battery energy storage and what it can do.
- Revenue Stacking: How to make the most money by tapping into different markets.
Power Markets
Think of power markets as the stock exchange for electricity. They're where electricity is traded between generators and consumers, all while keeping the grid running smoothly.
The Main Parts:
- Day-ahead markets: Planning and scheduling electricity for the next day.
- Intraday markets: Making short-term adjustments closer to delivery time.
- Balancing markets: Keeping the grid stable in real-time.
- Ancillary services: Support functions like frequency, voltage, and reserves.
How it works in Europe: European power markets are connected through major exchanges like EPEX SPOT and Nord Pool. This setup allows for cross-border trading and helps find the best prices.
Storage Systems
Battery Energy Storage Systems (BESS) are the key to playing in multiple power markets at once, giving you the flexibility you need.
Key Specs to Know:
- Power Rating (MW): How fast you can charge or discharge.
- Energy Capacity (MWh): How much energy the battery can hold.
- Duration: How long it can run at full power (e.g., 1-hour, 2-hour, 4-hour).
- Round-trip Efficiency: Energy you get out vs. what you put in, usually 85-95% for lithium-ion.
Things to Keep in Mind:
- Batteries degrade over time, which impacts your bottom line.
- Warranties usually last 10-20 years.
- How you use the battery (cycling) affects its lifespan.
Revenue Stacking
Revenue stacking is all about getting the most value from your storage asset. You do this by participating in several markets at the same time, balancing the risks and rewards.
Where the Money Comes From:
- Energy Arbitrage: The classic "buy low, sell high."
- Ancillary Services: Getting paid for helping with grid stability (like frequency regulation).
- Capacity Markets: Payments for being available to support the grid when needed.
- Grid Services: Helping with local network issues like congestion.
The Tricky Parts:
- Juggling the battery's state of charge for different jobs.
- Balancing guaranteed income with more variable revenue.
- Factoring in battery degradation for long-term plans.
- Dealing with complex market rules and technical limits.
Explore Revenue Stacking Strategies
Getting Started
Ready to go deeper? Start with Power Markets 101 to get the fundamentals down. Then, see how Storage Systems fit in, and finally, learn how to maximize your returns with Revenue Stacking.