Stand-alone Battery
Powering Profit: Hytrade exploring BESS Market Strategy for Merus Power
Hytrade conducted a pilot project for Merus Power to assess and simulate the potential for their Battery Energy Storage System (BESS) to generate additional revenue streams beyond ancillary services, by participating in wholesale electricity markets, with a particular focus on the continuously evolving intraday market.
The project highlighted that successful engagement in these markets requires a nuanced understanding of market behavior, especially the unique dynamics of intraday trading which can differ significantly from ancillary services. Hytrade demonstrated the potential for Merus Power to turn their BESS into a more active and profitable asset within the fluctuating electricity market. A sophisticated simulation environment was created to model optimal electricity buying and selling, considering day-ahead bidding and rapid intraday changes, while respecting BESS charge/discharge limits. The primary goal was to identify profitable trading opportunities by developing and testing various strategies, starting with day-ahead forecasts refined in the intraday market. The results indicated that wholesale electricity trading offers a viable additional revenue stream for BESS through arbitrage between day-ahead and intraday markets, emphasizing the importance of closing positions strategically before physical operation. More advanced strategies like volume splitting and capitalizing on market shifts further enhanced profitability with manageable BESS utilization. The project also highlighted the necessity of understanding market behavior, robust forecasting, appropriate tools, and skilled personnel for successful market engagement.
“Hytrade’s competence lies in combining deep practical experience in traded power markets with advanced AI to develop diverse trading strategies for complex assets like our Battery Energy Storage Systems. They provided insightful analysis and delivered compelling strategies that help unlock the full financial potential of our BESS clients. Their support has been invaluable in shaping our strategic thinking as we empower our customers to navigate and succeed in dynamic power markets,” says Matti Uusipaasto, Head of Trading and Analysis, Merus Power.
Anne Särkilahti, CEO and Founder of Hytrade, adds: “The real-life pilot case proved highly valuable for testing our trading strategies and price forecast models. While a strategy might seem effective in theory, practical testing revealed the true profitability. This project provided crucial insights into what currently succeeds in the market and what doesn’t—or at least not yet. As is typical with hands-on work, we generated even more ideas for future development. Consequently, we now possess a tested model and the necessary tools for running batteries in the traded markets.”
This project received financing from Business Finland.