BESS and Reduxi controller – a new revenue stream
Date: March 20, 2025
In today’s world, where users face rising electricity prices and grid fees, the use of advanced technologies is becoming crucial for cost-effective and sustainable electricity usage. One such technology is the Reduxi controller, which, with the help of advanced AI algorithms, enables the optimal use of battery energy storage systems (BESS) for various purposes, including trading electricity at Day-Ahead or Intraday prices (where suppliers allow it).
The prices of energy storage systems have been falling in recent years, but they are still high enough that careful consideration and a detailed financial plan are necessary to determine if their installation is truly cost-effective. However, most potential buyers of storage systems encounter a problem (or fail to notice it, despite its existence): how can they be used, and how can they be fully utilized?
Why Use an Energy Storage System and the Reduxi Controller
In short, besides allowing us to store excess electricity generated by solar panels and ensuring uninterrupted supply in case of a grid outage, an energy storage system can be utilized in three additional ways, all of which bring extra revenue or directly reduce electricity supply costs:
- Reducing peak power for lower grid fees: The Reduxi controller optimizes the use of the storage system to reduce peak loads, thereby lowering grid fees.
- Trading electricity: The storage system, combined with suitable control systems like Reduxi, enables trading electricity on Day-Ahead and Intraday markets, allowing for the exploitation of price fluctuations to maximize revenue.
- Providing system services: The storage system can be used to provide system services such as aFRR (automatic frequency restoration reserve) and similar services that contribute to grid stability – but only if the storage system is controlled by a system like the Reduxi controller.
The Reduxi controller is designed for energy management and, in addition to controlling the storage system, allows integration with various devices at the metering point, such as energy storage systems, solar panels, electric vehicle (EV) chargers, heat pumps, and other devices. Using advanced AI algorithms, the controller calculates how to best use the energy storage system to achieve the mentioned goals.
Trading Electricity on Spot (Day-Ahead) and Intraday Markets
Trading electricity on Day-Ahead and Intraday markets on the electricity exchange allows for the exploitation of price differences to achieve financial benefits. The Day-Ahead market enables electricity trading for the next day, while the Intraday market allows trading within the same day, enabling faster responses to changes in supply and demand.
Day-Ahead Market
The Day-Ahead market is an organized market on the electricity exchange where trading is conducted for the next day. Prices for each hour of the day are determined based on supply and demand. Using this data, the Reduxi controller can plan the charging and discharging of the storage system to optimize consumption (more during low or negative prices and less during higher prices) and output (more during high prices and little or none during low or negative prices). The differences can be significant, and a megawatt-hour of storage capacity can yield around €100 in daily earnings.
Intraday Market
The Intraday market allows for trading electricity within the same day. This market is more dynamic and allows for quicker adjustments to changes in supply and demand. Participants can trade in real-time, in 15-minute intervals, which enables the exploitation of short-term price fluctuations. Here too, the Reduxi controller ensures that, within the other constraints set by the user (such as minimum and maximum storage levels, and reserved capacity for peak shaving or system services), price fluctuations are maximized to reduce the final electricity cost for the user.
Using AI Algorithms to Optimize Storage Systems
The Reduxi controller uses advanced AI algorithms to optimize the use of energy storage systems. These algorithms analyze real-time data, including electricity exchange prices, historical data, weather forecasts, and other relevant factors. Based on this data, the AI algorithms calculate the most optimal use of the storage system to achieve the main goal of maximizing electricity cost savings, or more specific goals such as peak shaving.
Advantages of Using AI Algorithms
- Accurate Energy Demand Forecasting: AI algorithms can accurately predict energy demand patterns based on historical data, weather conditions, time of day, and other variables. This allows for better planning and adjustment of storage system usage.
- Exploiting Energy Price Changes on the Exchange: AI algorithms enable the exploitation of daily and hourly energy price fluctuations in real-time based on supply and demand. This allows for the optimization of energy use by taking advantage of lower prices during low demand periods for charging and higher prices during high demand periods for discharging the storage system.
- Analyzing and Adapting to User Habits: AI algorithms can analyze user habits, such as when they typically consume electricity and when they have low consumption (considering factors like season, weather, holidays, or workdays) and incorporate this into the system’s operation planning.
Reduxi Controller for Lower Costs and Greater Flexibility
Using energy storage systems to trade electricity at Day-Ahead or Intraday prices with the Reduxi controller and advanced AI algorithms enables greater efficiency and financial benefits for users who have contracts with suppliers for the delivery and purchase of electricity based on market prices. The Reduxi controller allows for the optimal use of storage systems for various purposes, including reducing peak power, providing system services, and trading electricity. With the help of advanced AI algorithms, companies can accurately predict energy demand, adapt to dynamic energy prices, and optimize the operation of storage systems, making electricity costs not only noticeably lower but also more predictable.