Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities

Liaqat Ali; M. Imran Azim; Jan Peters; Ehsan Pashajavid; Vivek Bhandari; Anand Menon; Vinod Tiwari; Jemma Green

doi:10.1109/iSPEC54162.2022.10032992

Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities

Liaqat Ali, M. Imran Azim, Jan Peters, Ehsan Pashajavid, Vivek Bhandari, Anand Menon, Vinod Tiwari, Jemma Green

Research output: Chapter in Book/Report/Conference proceeding › Conference Paper › Research › peer-review

8 Citations (Scopus)

Abstract

Battery energy storage systems (BESS) are a crucial component of local energy markets (LEMs). This paper examines a LEM of 100 participants from an Australian town, comprising three distinct players; consumers, prosumers with solar photovoltaics (PVs), and prosumers with solar PVs and BESS. BESS investment returns are calculated based on four capital budgeting techniques. Because there is an additional optimised revenue stream through peer-to-peer (P2P) trading-based LEM, the investment returns for residential BESS are better. Better returns mean that LEMs could encourage people to buy and install more BESS. The study finds the investment returns of residential BESS, and performs comparative analysis to prove LEM is a better solution to improve returns. Additionally, the results also show that participants with BESS get maximum reduction in their cost of energy usage.

Original language	English
Title of host publication	Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC)
Editors	Ehsan Pashajavid, Dowon Kim, Sumedha Rajakaruna, Ahmed Abu-Siada
Place of Publication	Piscataway NJ USA
Publisher	IEEE, Institute of Electrical and Electronics Engineers
Number of pages	5
ISBN (Electronic)	9781665485227
ISBN (Print)	9781665485234
DOIs	https://doi.org/10.1109/iSPEC54162.2022.10032992
Publication status	Published - 2022
Externally published	Yes
Event	IEEE Sustainable Power and Energy Conference 2022 - Online, Australia Duration: 4 Dec 2022 → 7 Dec 2022 Conference number: 4th https://ieeexplore.ieee.org/xpl/conhome/10032972/proceeding (Proceedings) https://attend.ieee.org/ispec-2022/ (Website)

Conference

Conference	IEEE Sustainable Power and Energy Conference 2022
Abbreviated title	iSPEC 2022
Country/Territory	Australia
Period	4/12/22 → 7/12/22
Internet address	https://ieeexplore.ieee.org/xpl/conhome/10032972/proceeding (Proceedings) https://attend.ieee.org/ispec-2022/ (Website)

Keywords

BESS
electricity cost
investment return
Local energy market
P2P energy trading
prosumer

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1109/iSPEC54162.2022.10032992

Cite this

Ali, L., Azim, M. I., Peters, J., Pashajavid, E., Bhandari, V., Menon, A., Tiwari, V., & Green, J. (2022). Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities. In E. Pashajavid, D. Kim, S. Rajakaruna, & A. Abu-Siada (Eds.), Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC) IEEE, Institute of Electrical and Electronics Engineers. https://doi.org/10.1109/iSPEC54162.2022.10032992

Ali, Liaqat ; Azim, M. Imran ; Peters, Jan et al. / Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities. Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC). editor / Ehsan Pashajavid ; Dowon Kim ; Sumedha Rajakaruna ; Ahmed Abu-Siada. Piscataway NJ USA : IEEE, Institute of Electrical and Electronics Engineers, 2022.

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title = "Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities",

abstract = "Battery energy storage systems (BESS) are a crucial component of local energy markets (LEMs). This paper examines a LEM of 100 participants from an Australian town, comprising three distinct players; consumers, prosumers with solar photovoltaics (PVs), and prosumers with solar PVs and BESS. BESS investment returns are calculated based on four capital budgeting techniques. Because there is an additional optimised revenue stream through peer-to-peer (P2P) trading-based LEM, the investment returns for residential BESS are better. Better returns mean that LEMs could encourage people to buy and install more BESS. The study finds the investment returns of residential BESS, and performs comparative analysis to prove LEM is a better solution to improve returns. Additionally, the results also show that participants with BESS get maximum reduction in their cost of energy usage.",

keywords = "BESS, electricity cost, investment return, Local energy market, P2P energy trading, prosumer",

author = "Liaqat Ali and Azim, {M. Imran} and Jan Peters and Ehsan Pashajavid and Vivek Bhandari and Anand Menon and Vinod Tiwari and Jemma Green",

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year = "2022",

doi = "10.1109/iSPEC54162.2022.10032992",

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Ali, L, Azim, MI, Peters, J, Pashajavid, E, Bhandari, V, Menon, A, Tiwari, V & Green, J 2022, Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities. in E Pashajavid, D Kim, S Rajakaruna & A Abu-Siada (eds), Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC). IEEE, Institute of Electrical and Electronics Engineers, Piscataway NJ USA, IEEE Sustainable Power and Energy Conference 2022, Australia, 4/12/22. https://doi.org/10.1109/iSPEC54162.2022.10032992

Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities. / Ali, Liaqat; Azim, M. Imran; Peters, Jan et al.
Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC). ed. / Ehsan Pashajavid; Dowon Kim; Sumedha Rajakaruna; Ahmed Abu-Siada. Piscataway NJ USA: IEEE, Institute of Electrical and Electronics Engineers, 2022.

Research output: Chapter in Book/Report/Conference proceeding › Conference Paper › Research › peer-review

TY - GEN

T1 - Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities

AU - Ali, Liaqat

AU - Azim, M. Imran

AU - Peters, Jan

AU - Pashajavid, Ehsan

AU - Bhandari, Vivek

AU - Menon, Anand

AU - Tiwari, Vinod

AU - Green, Jemma

N1 - Conference code: 4th

PY - 2022

Y1 - 2022

N2 - Battery energy storage systems (BESS) are a crucial component of local energy markets (LEMs). This paper examines a LEM of 100 participants from an Australian town, comprising three distinct players; consumers, prosumers with solar photovoltaics (PVs), and prosumers with solar PVs and BESS. BESS investment returns are calculated based on four capital budgeting techniques. Because there is an additional optimised revenue stream through peer-to-peer (P2P) trading-based LEM, the investment returns for residential BESS are better. Better returns mean that LEMs could encourage people to buy and install more BESS. The study finds the investment returns of residential BESS, and performs comparative analysis to prove LEM is a better solution to improve returns. Additionally, the results also show that participants with BESS get maximum reduction in their cost of energy usage.

AB - Battery energy storage systems (BESS) are a crucial component of local energy markets (LEMs). This paper examines a LEM of 100 participants from an Australian town, comprising three distinct players; consumers, prosumers with solar photovoltaics (PVs), and prosumers with solar PVs and BESS. BESS investment returns are calculated based on four capital budgeting techniques. Because there is an additional optimised revenue stream through peer-to-peer (P2P) trading-based LEM, the investment returns for residential BESS are better. Better returns mean that LEMs could encourage people to buy and install more BESS. The study finds the investment returns of residential BESS, and performs comparative analysis to prove LEM is a better solution to improve returns. Additionally, the results also show that participants with BESS get maximum reduction in their cost of energy usage.

KW - BESS

KW - electricity cost

KW - investment return

KW - Local energy market

KW - P2P energy trading

KW - prosumer

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DO - 10.1109/iSPEC54162.2022.10032992

M3 - Conference Paper

AN - SCOPUS:85148636015

SN - 9781665485234

BT - Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC)

A2 - Pashajavid, Ehsan

A2 - Kim, Dowon

A2 - Rajakaruna, Sumedha

A2 - Abu-Siada, Ahmed

PB - IEEE, Institute of Electrical and Electronics Engineers

CY - Piscataway NJ USA

T2 - IEEE Sustainable Power and Energy Conference 2022

Y2 - 4 December 2022 through 7 December 2022

ER -

Ali L, Azim MI, Peters J, Pashajavid E, Bhandari V, Menon A et al. Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities. In Pashajavid E, Kim D, Rajakaruna S, Abu-Siada A, editors, Proceedings - 2022 IEEE Sustainable Power and Energy Conference (iSPEC). Piscataway NJ USA: IEEE, Institute of Electrical and Electronics Engineers. 2022 doi: 10.1109/iSPEC54162.2022.10032992

Local Energy Markets Improve Investment Returns of Residential BESS by Arbitrage Opportunities

Abstract

Conference

Keywords

UN SDGs

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