Using imbalances to trade with your German BESS: some options, featuring Jackson Lamb

"In common language, the phrase "playing devil's advocate" describes a situation where someone, given a certain point of view, takes a position they do not necessarily agree with..."

First a general update: paid subscribers now have access to a chat/forum, where I will note preliminary thoughts which may or may not lead to full posts and respond to feedback or ideas.

This third post on “inside information” is a personal thought experiment based on publicly available information and extrapolations which may or may not be reasonable. To make this very clear I have mixed in extracts from Mick Herron’s Slough House series, a wonderful work of spy thriller fiction, which sets and maintains an appropriate tone.

 ‘So we just forget it happened?’ said Catherine.
 He sighed. ‘I’m not playing devil’s avocado here. It was almost certainly nothing… They filed out. Before leaving, Catherine turned. ‘Advocate,’ she said. ‘By the way.’

― Mick Herron, London Rules

Premise

If you’re a trader and you’re not using aFFR/mFFR activations to support a spot trading strategy, aren’t you leaving money on the table for your customers or your shareholders?

If you’re an asset owner thinking about entering the spot market, might explicit use of the activations be a way of closing the gap to optimisers nervous about the use of activations?

Suppose that you have an energy storage system at your disposal and you want to trade it in the spot markets. You may be a trader offering your services to asset owners. You may be an asset owner thinking about trading yourself (not an unrealistic goal even if you have no prior energy trading experience as many of the ingredients required are available “as a Service”).

Suppose also that you have existing access to aFFR or mFFR activation signals. Also not unrealistic if you have access to assets participating in ancillary services as you will see the activation signals and your asset responding. Or perhaps your friend has access to such assets and is willing to feed you the data. Why not? (Please tell me if you know.)

If Moscow rules meant watch your back, London rules meant cover your arse. Moscow rules had been written on the streets, but London rules were devised in the corridors of Westminster, and the short version read: someone always pays. Make sure it isn’t you.
― Mick Herron, Slow Horses

So, would you use aFFR/mFFR activation signals as part of your spot trading strategy? Your first response may be “no, because I don’t need to, there are ways of being successful without this information.”