> However, because it is physically not possible to charge and discharge the battery at the same time, such trades have to be prevented.
The authors are observing that, if electricity prices are negative and your battery is not perfectly efficient, then you would like to charge and discharge simultaneously to get paid for wasting energy, but you can’t.
This is a silly limitation. Surely the power electronics or even just the control algorithms in a BESS could be slightly modified to consume power, get warm, and not transfer any current to or from the battery cells, effectively taking advantage of the BESS’s heat sink to sink excess power and sell that service.
More seriously, in a world with occasional negative prices, you would want your battery to be able discharge itself, without exporting power, in a controlled and power-limited manner so as to avoid overheating. And the optimization algorithms should factor this in. I wonder if real grid-scale BESS systems have this capability.
I have programmed batteries / algos to do this in some European markets. This is being done right now.
The yield you could make from batteries in the UK dropped from double digits to 2% in 8months once some hedge funds figured out how to build and bid (or commission companies like my employer) batteries in the UK short term reserve market.
There are a few firms in northern Jutland and London specialised in this sort of trading.
Battery production rates are creeping up to multiple twh/year now. This is accumulating to a lot of battery sitting around in vehicles, domestic storage, grid storage, etc. Mostly the goal of these batteries of course isn't supporting the grid but some other use case. But if it's plugged in, it could potentially be available for selling power. Right now, most EVs can't contribute power. But that's something that is starting to change. Small experiments with thousands or tens of thousands of vehicles have already been done and seem to work fine. Now imagine tens of millions of vehicles being part of the grid. That's a serious amount of stand by power for absorbing excess power or dispatching power when needed.
Another interesting aspect is that as grid demand fluctuates, a lot of cables are under utilized at least some of the time. Which means there is plenty of capacity for charging batteries provided there is excess generation and cable capacity. A lot of that power currently gets discarded instead. Batteries allow better use of this excess power. And having a lot of local battery means that cable capacity can be freed up as well when needed and then recharged when demand reduces.
And then finally battery prices are coming down. With sodium ion cell production ramping up in several places, things could get quite a bit cheaper. These don't depend on scarce metals or materials. And they last quite long as well (relative to NMC).
I'm not at all familiar with this whole field, but why would you publish a trading strategy if it has potential? Why not sell it to a hedgefund, at least? Or is this research formally publishing what industry is already doing?
Just use EVs. EVs are primarily energy storage devices, some people get to drive them about 20 - 30 mins/day. The remaining 23 hours, it is a energy storage device. It can absorb excess power when price is negative, and can even supply power back to the grid when prices are high!
In Australia 5 minute spot pricing is now accessible to many residential customers via retailers like Amber electric. With volatile pricing and a large home battery subsidy from the re-elected government, batteries can quickly pay for themselves through arbitrage alone.
EMHASS is an interesting tool to perform the optimisation.
> “Our method is able to solve over 24 million optimization problems in less than 90 minutes.”
that line is doing heavy lifting. sounds insane until you look closer
they batch out embarrassingly parallel, lowdimensional problems
no live latencies, no network I/O, no grid API jitter. just hammering a static dataset in memory. real markets stall, disconnect, price slippage, queue delays. none of that here. so yeah, 24 million looks cool in the abstract, but under the hood it's just cleanroom compute; feels like they optimised the benchmark more than the actual system
Imagine software that could run on EVs, Powerwall-type batteries, computers/tablets/smartphones, and so on, which would automatically charge and discharge for passive income. Essentially algorithmic trading, but with power instead of stock. You'd just have to configure any necessary time ranges and charge percentages, e.g. maybe your EV needs to be at 25% by 8am and again by 5pm on weekdays in order to make your daily commute.
Maybe some EVs will start to come with built-in crypto miners to burn negatively priced power when the battery is at capacity. Maybe Lyft/Uber and Waymo/Cruise will take advantage of it by increasing and lowering rates based on the price of power (if they don't already).
A world where individuals are incentivized to use some wasted space to place low maintenance automated trading batteries to make a little money on the side seems like it'd be an interesting solution to the renewable energy storage problem. Put a few units in otherwise useless locations like on roofs or in between highways and make some cash, sounds like a decent investment.
Would there be any expected problems in doing such distributed power storage on a very large scale around the grid that you'd have to account for? Perhaps issues with synchronization, power flow or the possibility of large scale drops in avaialble stored power at times?
pretty sure nodal energy market trading, duck curve arbitrage is the whole profit play for the tesla power wall/autobidder and the Base Power startup coming out of ERCOT. There is definitely a land rush from energy firms and GIS guys to front run land purchasing near solar buildouts and to build as much grid scale battery storage as possible. The percent swings can be huge. Also a huge rush for this in the Northeast now that the offshore wind contracts have been cancelled.
Energy overproduction is going to become a serious viability problem for baseload generators, which in time will significantly affect grid reliability. Rolling blackouts will become the norm unless we figure out a serious scalable solution to this.
If anyone is interested in Batteries, I highly recommend following NAATBATT.org on LinkedIn and joining their newsletter.
Obama set this org up as a senator to help bring lithium ion batteries supply chain to the US and it since evolved into the trade association for all things batteries.
Jesus! Why finance people are so hell-bent in extracting rent from every single thing, pervert it, make sure the incentives are all pointed to the shortest run while socializing all the costs to the rest of us?
Maximizing Battery Storage Profits via High-Frequency Intraday Trading
(arxiv.org)271 points by doener 12 June 2025 | 255 comments
Comments
The authors are observing that, if electricity prices are negative and your battery is not perfectly efficient, then you would like to charge and discharge simultaneously to get paid for wasting energy, but you can’t.
This is a silly limitation. Surely the power electronics or even just the control algorithms in a BESS could be slightly modified to consume power, get warm, and not transfer any current to or from the battery cells, effectively taking advantage of the BESS’s heat sink to sink excess power and sell that service.
More seriously, in a world with occasional negative prices, you would want your battery to be able discharge itself, without exporting power, in a controlled and power-limited manner so as to avoid overheating. And the optimization algorithms should factor this in. I wonder if real grid-scale BESS systems have this capability.
The yield you could make from batteries in the UK dropped from double digits to 2% in 8months once some hedge funds figured out how to build and bid (or commission companies like my employer) batteries in the UK short term reserve market.
There are a few firms in northern Jutland and London specialised in this sort of trading.
Another interesting aspect is that as grid demand fluctuates, a lot of cables are under utilized at least some of the time. Which means there is plenty of capacity for charging batteries provided there is excess generation and cable capacity. A lot of that power currently gets discarded instead. Batteries allow better use of this excess power. And having a lot of local battery means that cable capacity can be freed up as well when needed and then recharged when demand reduces.
And then finally battery prices are coming down. With sodium ion cell production ramping up in several places, things could get quite a bit cheaper. These don't depend on scarce metals or materials. And they last quite long as well (relative to NMC).
EMHASS is an interesting tool to perform the optimisation.
that line is doing heavy lifting. sounds insane until you look closer they batch out embarrassingly parallel, lowdimensional problems no live latencies, no network I/O, no grid API jitter. just hammering a static dataset in memory. real markets stall, disconnect, price slippage, queue delays. none of that here. so yeah, 24 million looks cool in the abstract, but under the hood it's just cleanroom compute; feels like they optimised the benchmark more than the actual system
Tldr: most applications of free energy have capital costs that far outweigh the free energy harvest potential.
Imagine software that could run on EVs, Powerwall-type batteries, computers/tablets/smartphones, and so on, which would automatically charge and discharge for passive income. Essentially algorithmic trading, but with power instead of stock. You'd just have to configure any necessary time ranges and charge percentages, e.g. maybe your EV needs to be at 25% by 8am and again by 5pm on weekdays in order to make your daily commute.
Maybe some EVs will start to come with built-in crypto miners to burn negatively priced power when the battery is at capacity. Maybe Lyft/Uber and Waymo/Cruise will take advantage of it by increasing and lowering rates based on the price of power (if they don't already).
Would there be any expected problems in doing such distributed power storage on a very large scale around the grid that you'd have to account for? Perhaps issues with synchronization, power flow or the possibility of large scale drops in avaialble stored power at times?
Obama set this org up as a senator to help bring lithium ion batteries supply chain to the US and it since evolved into the trade association for all things batteries.
https://www.linkedin.com/company/naatbatt-international/