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

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.