Thomas Blesch 👨🏻‍🔬🔋🇩🇪

Still looking for topics to discuss with family over Christmas? 🎄 What about how discharge duration affects arbitrage profits for energy storage? 🔋🪫🔋 Jokes aside, here you see that across major world markets, profits drop sharply when moving beyond 4-hour duration. For example, you can expect an increase of ~$5-20 per kW per year when increasing a 1-hour to a 2-hour system in Europe. However, if you’re planning an 8-hour system and wonder whether a 9-hour system is better, your increase is only ~$1 /kW-year. Given that an extra kWh of lithium-ion system costs around $140 at the moment, it's not a good trade-off (yet). The caveat of this analysis is that it's based on 2012-2019 data. So, developers, operators and investors in energy storage systems need to ask: 1⃣ How frequent are events that temporarily increase power price volatility like COVID in 2020 and extreme natural gas prices in 2022? 2⃣ How will this relationship change towards 2025/2030 as more renewables increase power price volatility more generally? Now, that’s something worth discussing, isn’t it?! If you want to learn more, this graph comes from our open-access book “Monetizing Energy Storage” global.oup.com/academic/prod… And if you're curious, you can easily replicate this analysis yourself in 3 easy steps: · Go to EnergyStorage.ninja · Open the “Arbitrage” tab and click “Calculate” · Click “Storage parameters”, change “discharge duration” to “9” and click “Calculate” You will see that arbitrage profits for a 1 MW / 8 MWh system in the British power market increase by less than USD 1,000 (i.e., <1 USD/kW-year). Message me if you're interested in exploring more recent years or other markets. Merry Christmas everyone! 🎄🔋🪫🔋🎄