Wholesale spot arbitrage
Trading a battery against the 5-minute wholesale spot price - buying when negative and selling into peak.
Wholesale spot arbitrage means dispatching a battery against the 5-minute (or 30-minute, depending on the market) wholesale spot price: charging when prices are low or negative, and discharging when prices are high.
Spot arbitrage is a large revenue stream for grid-scale (front-of-meter) batteries. For behind-the-meter batteries, participation is typically indirect - via a retailer or aggregator that has wholesale market registration and passes on a structured product to the customer.
Not all sites have meaningful wholesale-arbitrage upside. It depends on:
- Whether the site has wholesale exposure (usually only via specific retailer contracts)
- The volatility of the wholesale market in the local region
- The battery's cycle-life constraints and the operator's willingness to spend cycles on arbitrage revenue
In Australia
The NEM wholesale price settles every 5 minutes. Batteries can be bid into the spot market via an aggregator with market registration.