Energy Storage Arbitrage: 2 common Interview Questions
A new online course is being prepared about Energy Storage Trading using optimisation, machine learning (including reinforcement learning) , beginner-friendly ( no prerequisites ). This course will explain what energy storage trading is, what energy storage arbitrage is, etc - also all developed in Python. This is a topic that all energy companies are interested in, so there is very high probability that a relevant interview question will be asked . Even if you're not looking for jobs at the moment, you may look soon, so it is definitely useful to know this terminology. Here are two common interview questions: Interview Question1: What do we mean by Energy Storage Arbitrage? Interview Question2: What is the difference between Financial Arbitrage and Energy Storage Arbitrage? ================== Answer to Question1: It is when an Energy Storage unit buys electricity when the electricity price is low, and sells it when the electricity price is high. This operation generates economic profit by exploiting this price volatility over the course of a day, as shown in the attached slide. Answer to Question 2: The main difference is between space and time. Financial arbitrage exploits price differences between two different locations (e.g. New York and London) at the same moment (i.e. we buy a financial asset in New York and immediately we sell the same asset in London at a slightly higher price e.g. $100 versus $100.1 ). While Energy Storage arbitrage exploits price differences at different times within the same location (electricity market) e.g. the same storage unit (same location) buys electricity when its price is low, and sells it when the price is high. VIDEOS: Also, in the Classroom/6.3 I have uploaded 2 videos, each for these two questions (they provide some extra analysis). These two videos will also be part of the new course (in a few days).