Electricity Trading and Negative Prices: Storage vs. Disposal

• Main Authors: ZHOU, Yangfang (Helen), Scheller-Wolf, Alan, Secomandi, Nicola, Smith, Stephen
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: inventory; electricity storage; Markov decision process; asset pricing models; negative prices; Operations and Supply Chain Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3483; https://ink.library.smu.edu.sg/context/lkcsb_research/article/4482/viewcontent/ZhouYFElectricityTrading2014.pdf
• Institution: Singapore Management University

Electricity cannot yet be stored on a large scale, but technological advances leading to cheaper and more efficient industrial batteries make grid-level storage of electricity surpluses a natural choice. Because electricity prices can be negative, it is unclear how the presence of negative prices mi...