In this work, we study the profitability of energy storage operated in the Nordic, German, and UK electricity day-ahead markets during 2006-2016. We build a linear optimization model which maximizes profits from arbitraging hourly prices and use the model output of profits and storage cycles in further econometric analyses. We quantify and disentangle the effects of electricity spot price volatility, electricity demand, carbon emission price, wind and solar generation, and spread between gas and coal prices on profits and operation of 1-13MWh energy storages. Among others we find that solar generation is associated with lower profits but higher operating frequency of energy storages in Germany. Wind power generation is associated with positive effects on profits in the UK and Germany. vRES does not affect profits or operation of the Nordic energy storages.
Energy storage optimization profitability risk analysis