Methodology: Historical BESS Revenue Simulation

Our proprietary optimisation engine demonstrates how to maximise revenue for Battery Energy Storage Systems (BESS) by running powerful simulations against historical data from the Great Britain (GB) electricity markets. The strategy is built on a sophisticated two-stage mathematical model that backtests a robust and flexible approach to energy trading, showing the full potential revenue available on previous dates.

Stage 1: Day-Ahead (DA) Strategic Optimisation

The first stage establishes an optimal 24-hour trading plan by analysing the historical Day-Ahead market data for a selected day. This process simulates the perfect foresight a BESS operator would have had at the start of the trading day.

Key Activities:

  • Co-optimisation of Revenue Streams: The model simultaneously evaluates historical prices for energy arbitrage (charging when prices were low, discharging when high) and ancillary services like Dynamic Containment to determine the most profitable combination of actions.
  • Dynamic Opportunity Cost Analysis: For any 4-hour block, the model calculates the potential arbitrage profit using actual historical prices. It then compares this to the ancillary service revenue available in the same period, selecting the service only if its revenue exceeded the opportunity cost.

Stage 2: Intraday (ID) Tactical Refinement

This stage simulates how an operator could have capitalised on price movements closer to the time of delivery, using the optimal Day-Ahead schedule as a baseline.

Key Activities:

  • Historical Price Refinement: The model analyses the actual price movements in the Intraday market for the same historical period, identifying new profit opportunities that were unknown at the time of the Day-Ahead auction.
  • Capturing Additional Value: It simulates the execution of profitable trades based on these Intraday price signals, reacting to historical market events to generate additional revenue on top of the DA plan.
  • Ensuring Compliance: Throughout the simulation, all tactical adjustments respect the commitments made in the Day-Ahead stage and adhere to the battery's physical limitations, providing a realistic assessment of potential earnings.

Core Features & Benefits

Holistic Revenue Stacking

By simulating a co-optimisation strategy, we demonstrate how a battery’s full potential can be utilised, stacking revenues in a way a single-market model cannot.

Demonstrated Profitability

The two-stage simulation demonstrates a strategy that combines a day-ahead plan with intraday agility, providing a clear picture of balanced risk and reward.

Asset Health and Integrity

The optimisation is governed by constraints that reflect the battery's physical characteristics, ensuring the simulated strategy is both profitable and sustainable.

Technical Foundation

Our model is built using Pyomo, a powerful Python-based optimisation modelling language, and leverages high-performance solvers to find the optimal schedule under complex conditions.