Peak valley arbitrage refers to a behavior in the electricity market where energy storage systems are used to purchase low-priced electricity during peak periods and store it, and then sell the stored electricity at a high price during low periods to obtain profits. This behavior can take advantage of the fluctuation differences in electricity prices to obtain economic benefits.

In the electricity market, electricity prices fluctuate with supply and demand and load conditions. Usually, the electricity price is higher during the peak period of daytime electricity consumption, while the electricity price is lower during the low period of nighttime electricity consumption. Through peak valley arbitrage operations, energy storage systems can purchase cheap electricity for charging during low periods, and then sell the stored energy at a higher price during peak periods, achieving maximum profit. Meanwhile, peak valley arbitrage can also balance the supply and demand relationship in the electricity market, improving the stability and reliability of the power system.

To implement peak valley arbitrage, it is usually necessary to rely on intelligent control systems and market participation mechanisms to ensure that energy storage systems can accurately capture and utilize electricity price differences. In addition, it is necessary to consider factors such as the charging and discharging efficiency, lifespan, and cost of energy storage systems, and comprehensively evaluate the profit potential and feasibility of peak valley arbitrage.

Overall, peak valley arbitrage is a common application model of energy storage systems in the electricity market. Through reasonable operation and management, it can bring economic benefits to the holders of energy storage systems and also help improve the efficiency and stability of the electricity market. Meanwhile, peak valley arbitrage also plays a positive role in promoting the development of renewable energy and responding to changes in electricity supply and demand.