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Quantitative Finance · Glossary

What is Battery arbitrage?

Definition 23.3 Strategies II: Volatility, Relative Value, Macro and the Bank Desks · Chapter 23 — Power and Gas Trading

Battery arbitrage is scheduling a battery to charge in cheap hours and discharge in dear ones, first against the day-ahead auction and then by re-optimising against intraday prices, within its power, energy, efficiency and cycle limits.

German day-ahead prices (DE-LU) by hour of the day, averaged over 2024 and over 2025, and the share of hours with negative prices over both years. Data: Bundesnetzagentur / SMARD.de (CC BY 4.0).
Figure 23.1. German day-ahead prices (DE-LU) by hour of the day, averaged over 2024 and over 2025, and the share of hours with negative prices over both years. Data: Bundesnetzagentur / SMARD.de (CC BY 4.0).
Cumulative revenue of a 1 MW, 2 MWh battery on German day-ahead prices, 2024–2025, and with its schedule re-optimised against synthetic intraday prices. Data: Bundesnetzagentur / SMARD.de (CC BY 4.0); s2_powergas.battery_table.
Figure 23.2. Cumulative revenue of a 1 MW, 2 MWh battery on German day-ahead prices, 2024–2025, and with its schedule re-optimised against synthetic intraday prices. Data: Bundesnetzagentur / SMARD.de (CC BY 4.0); s2_powergas.battery_table.
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