Wholesale electricity markets are volatile by design, and that volatility is a revenue source for assets that can move energy through time. A battery that charges when the wholesale price is low and discharges into the evening peak captures the arbitrage spread, which in volatile regions routinely ranges from $40 to over $120 per MWh on a daily basis. Our trading practice turns that spread into a disciplined, forecast-driven operation rather than a reactive gamble.
Price forecasting and dispatch optimization
Effective dispatch begins with a credible price forecast. We combine day-ahead market signals, load and renewable-generation forecasts, and historical dispatch patterns to construct an expected price curve, then solve for the charge-discharge schedule that maximizes expected revenue subject to state-of-charge, cycling, and degradation constraints. The optimizer respects round-trip efficiency, typically 85 to 90 percent, so that the captured spread must clear the energy lost in each cycle before a trade is taken.
Degradation is a real cost, not an externality. Each full cycle consumes a fraction of the battery's warrantied throughput, so the optimizer prices that wear into every dispatch decision. A marginal trade that captures a thin spread may be net-negative once degradation is charged against it; bounding daily cycle-equivalents to two to four protects asset life while still harvesting the high-value spreads.
- Day-ahead and real-time price forecasting with renewable-load inputs
- Degradation-aware dispatch optimization with cycle-equivalent limits
- Co-optimization across energy, ancillary, and capacity markets
- Sub-second frequency response for fast ancillary products
- Risk limits, hedging, and state-of-charge reserve management
Stacking value across markets
A storage asset confined to energy arbitrage leaves revenue on the table. The same battery can co-optimize across ancillary-service markets, where its sub-second response makes it ideal for frequency regulation and contingency reserve, and capacity markets that pay for guaranteed availability at peak. We model the full value stack and co-optimize across these streams, allocating state-of-charge between them so that high-value ancillary commitments are honored without forgoing the day's arbitrage opportunity.
Frequency response is among the most valuable products an asset can offer because it rewards speed rather than energy volume. A battery holding a small reserve band can earn regulation revenue continuously while still cycling its bulk capacity for arbitrage, provided the dispatch logic carves out and protects the committed reserve.
Risk management
Trading without limits is speculation. We operate every asset under defined risk bounds: maximum exposure per interval, state-of-charge reserves to honor commitments, and hedging where forward contracts can lock in a portion of expected revenue against price collapse. The objective is a risk-adjusted return that survives a bad week, not a maximized expected value that ignores tail outcomes. That discipline is what makes merchant revenue financeable rather than merely possible.