What is the reality of intraday trading

Smart power: trading storage power on the spot market

So far, the common business model with commercial storage systems has primarily been to cut power peaks when switching on machines and systems in the company. This reduces the required connection load, which in turn has an effect on reducing energy costs. A second - so far less common - business model is the marketing of control power. But here the operators of commercial storage batteries are mainly faced with the challenge that, on the one hand, the systems have to be prequalified and, on the other hand, the competition on the control reserve market is fierce.

Respond to price signals

It looks different on the spot market. Here - in contrast to the control reserve market - the flexible electricity demand is adjusted to the volatile feed-in of solar and wind power plants by means of price signals. Since the storage facilities can flexibly feed in electricity or store it temporarily, the system operators have the advantage of adapting to these price signals. You can store electricity if it is inexpensive in intraday trading due to the high feed-in of solar and wind power. They supply this back to the grid when the amount of solar and wind power is too low to meet the demand.

Develop suitable algorithms

The main challenge here is to find an algorithm with which the price differences can be optimally used. These not only have to react immediately to the signals from the power exchange, they also have to be coordinated with the respective storage system. Various electricity traders are currently developing corresponding solutions. In order to be able to test this in reality, Smart Power offers storage capacity and storage capacity for use.

Large storage is available

For this purpose, the developer of large storage projects from Feldkirchen near Munich is currently using a system that the company did not build on behalf of a customer, but kept in its own portfolio. This is a storage system in the Trostberger Stadtwerke network. The system can temporarily store 1.5 megawatt hours of electricity and, if necessary, feed it into the grid with 1.2 megawatts. Operation is contractually regulated in such a way that the municipal utilities use the storage facility for three months a year to cut off peak loads. Smart Power uses the storage system for its own purposes for the remaining nine months.

Verbund is the first test customer

During this time, the company operates the system as a test laboratory for electricity traders. The Austrian electricity supplier Verbund Energy4Business is the first company to use the opportunity to test its algorithms with the storage system near Trostberg, not far from Lake Chiemsee, in live mode. For this purpose, it was first connected to the Austrian trading platform Volery. This is able to network various power generators and storage units of different sizes and to control them in real time. The platform reacts to the price signals from the electricity exchange.

Develop business models for large-scale storage

Since June 2020, Verbund has also been trading storage power from Trostberg on the spot market via Volery, thus testing its own platform. Other electricity traders can do the same. Because Smart Power has launched a so-called intraday challenge. "Everyone can approach the matter with their own market intelligence and their own trading algorithms and test the real performance of battery optimization in intraday trading," explains Georg Gallmetzer, who is responsible for sales and the development of business models at Smart Power. “In this way we not only determine the actual economic potential of this business model, but also the best possible solutions through different approaches. We are in a pioneering phase in the development of sustainable business models for large-scale storage power plants and we want to identify viable financing instruments in this way. "

Convert electricity trading to the energy transition

This is the first step towards restructuring electricity trading and adapting it to the volatile feed-in of green electricity, which will grow in the future. “Ultimately, everyone will benefit from this project in the long term,” emphasizes Ulrich Bürger, technical director at Smart Power. "Because intraday trading has a long-term positive effect on system stability, dampens high price fluctuations and supports the compensation of forecast inaccuracies in renewable energies." The spot market represents a business model with which the storage can be financed as cheaply as possible and thus faster integration renewable energies into a stable and fail-safe energy supply system of the future.

Do you want to stay up to date on which business concepts with large storage systems are gaining acceptance? Then simply subscribe to our free newsletter! Here you can sign up.