Market Pricing Analysis for Wind Energy with BESS: A Stochastic Evaluation of PPA Strategies and Storage Integration

(BESS) as a mechanism for temporal energy arbitrage capable of shifting a limited amount of surplus energy from low-to-high price periods. The model is implemented in Python with multiprocessing to evaluate return distributions under uncertain conditions. Economic viability is assessed through discounted cash flow analysis, internal rate of return percentiles, coefficients of variation and the Markowitz risk–return frontier. BESS is found to reduce the median return, reflecting the additional capital expenditure required to enable arbitrage under average pricing assumptions. When surplus energy is shifted at a premium price, the standard deviation of returns decreases modestly, indicating a smoothing effect on revenue distributions.

As a result, the coefficient of variation remains largely determined by the technology mix, with solar-heavy portfolios exhibiting lower risk due to their lower generation volatility. When considering the portfolio from a risk-return perspective, the inclusion of BESS changes the local shape of the frontier and shifts the Sharpe-optimal configuration toward a higher wind share, even though overall risk levels remain the same. These findings indicate that, within an arbitrage-only representation, BESS serves more as a stabilizing amplifier than as a mechanism for enhancing peak profitability or contract firmness. Sensitivity analyses incorporating flat ancillary-type revenues show that additional remuneration can materially improve return distributions and alter the relative attractiveness of storage-integrated portfolios. As storage costs continue to decline, the model can provide a basis for determining when and under what circumstances BESS will be economical attractive for hybrid renewable energy portfolios in the long run.