Market Dynamics & Pricing
How energy storage transforms electricity markets and creates new revenue opportunities
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Section 3 of 5Storage's Role in Energy Markets
Energy storage fundamentally changes how electricity markets work. Traditional markets balance supply and demand in real-time, but storage introduces temporal flexibility - the ability to shift energy from periods of low demand to periods of high demand. This creates new market dynamics and revenue opportunities.
Storage participates in multiple market segments simultaneously: energy arbitrage, frequency regulation, capacity markets, and ancillary services. The economic value depends on market design, grid conditions, and regulatory frameworks. Understanding these dynamics is crucial for optimizing storage investments.
Market Transformation
Storage enables higher penetration of variable renewables by providing flexibility, reduces curtailment, and can lower overall system costs through peak shaving and demand management.
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Market Balance
Market Scenarios
💡 Market Dynamics Insight
Storage transforms energy markets by providing flexibility. During oversupply, storage charges at low prices; during shortages, it discharges at high prices. This arbitrage value, combined with grid services, creates multiple revenue streams that improve storage economics.