aalto1 untyped-item.component.html
The impact of battery energy storage on day-ahead electricity prices
Loading...
URL
Journal Title
Journal ISSN
Volume Title
School of Electrical Engineering |
Master's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.
Authors
Date
Department
Major/Subject
Mcode
Language
en
Pages
45
Series
Abstract
The increasing penetration of variable renewable energy sources has intensified short-term price volatility and inter-temporal price spreads in European electricity markets, increasing the value of flexibility resources capable of shifting electricity across time. Battery energy storage systems (BESS) are emerging as a key source of short-duration flexibility, yet their influence on day-ahead electricity prices remains insufficiently quantified, particularly under alternative regulatory charging-cost structures. This thesis develops a price-based analytical framework to assess how large-scale BESS operating through day-ahead arbitrage modify electricity price formation in the German market. The methodology combines a profit maximising, price-taking battery arbitrage optimization model with an iterative price-adjustment mechanisms that up-dates hourly prices conditional on battery charging and discharging behavior. Using historical day-ahead prices for four representative weeks from 2023-2024, the analysis focuses on price dynamics rather than storage profitability. Results show that BESS arbitrage reduces price extremes, compresses inter-temporal price spreads, and lowers short-term volatility, with the magnitude of these effects strongly dependent on charging-cost structures. The findings highlight the role of charging-cost-regulation in shaping storage-induced price dynamics in high-renewable power systems.