Electric Energy Price Arbitrage Using Battery Energy Storage. Feasibility study

Abstract

The following thesis is a study into the feasibility of exploiting the inefficiencies of an openly traded electricity market by buying low cost electricity storing it in electric car batteries and reselling it to the market. To assess the feasibility a hypothetical project with all necessary equipment, infrastructure and personnel is set up and 15 years of daily electricity trading operation are calculated using the Discounted Cash Flow method and Net Present Value then used to determine the feasibility of the project. 29 energy systems on five power markets were tested and the result of the research is that it is feasible to conduct electric energy price arbitrage on four of the twenty nine systems: •SoCal•San Diego•SP-15•Long IslandThe present value of the cash generated in the operation on these systems was higher than the value of the cash needed to set it up, i.e. it is economical to spend the money in setting up the facilities and the operations because the cash generated by the business more than compensates the initial investment, even with opportunity costs, risk and time value of money taken into account.