Buying electricity cheaply (charging during low-price periods) and selling at a higher price (discharging during high prices). The primary revenue driver for most NEM batteries.
Energy arbitrage is the practice of charging a battery when the spot price is low and discharging it when the spot price is high, profiting from the difference. It is the primary revenue driver for most merchant NEM batteries, particularly those without significant FCAS enablement or a contracted offtake arrangement.
How much arbitrage revenue a battery can realistically capture depends on its duration (energy capacity relative to power capacity — a longer-duration unit can hold charge through a longer high-price window), the size and frequency of the price spread it faces in its region, and how much of that spread it successfully times its dispatch against, measured on NEMPulse as its capture rate against the optimal-dispatch benchmarks.
Related terms: RRPLP Backcast
See also: Market economics
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