| Term | Definition |
|---|---|
| aFRR | Automatic Frequency Restoration Reserve. Activated automatically by TSO signal to restore frequency to 50 Hz. Full response within 5 minutes. |
| Arbitrage | Buying energy when cheap and selling when expensive. For batteries: charge low, discharge high. |
| Big-M | A modeling trick using a large constant M to link binary variables to continuous constraints. Used to prevent simultaneous charge/discharge. |
| BMS | Battery Management System. Hardware/software that monitors cell voltages, temperature, SoC, and enforces safety limits. |
| Capture ratio | Realized revenue / perfect-foresight revenue. Measures how much of theoretical maximum the system achieves. Good: >0.7. |
| Constraint | A rule the optimizer must respect. Physical limits (power, energy) or contractual obligations (delivery commitments). |
| Day-ahead (DA) | Auction-based electricity market where energy for the next day is traded. Gate closure typically 12:00 D-1. |
| Decision variable | A quantity chosen by the optimizer (e.g., charge power per hour). Contrast with parameter (given input). |
| Degradation cost | €/MWh penalty representing battery wear per unit of throughput. Derived from replacement cost / lifetime cycles. |
| Delta (Δ) | The difference between new optimal schedule and existing positions. The trades needed to rebalance. |
| EPEX SPOT | European Power Exchange. Operates day-ahead and intraday markets for DE, FR, AT, NL, BE, and others. |
| FCR | Frequency Containment Reserve. Fastest balancing product — full activation within 30 seconds. Capacity-based payment. |
| Gate closure | Deadline after which bids can no longer be submitted or modified. |
| HiGHS | Open-source LP/MIP solver. Fast, free, no license. Suitable for battery optimization at production scale. |
| Intraday (ID) | Continuous electricity market for trading close to delivery. Pay-as-bid. Gate closure 5–60 min before delivery. |
| LP | Linear Program. Optimization with linear objective and constraints. All variables continuous. Solvable in polynomial time. |
| MCP | Market Clearing Price. The uniform price at which supply equals demand in an auction. |
| mFRR | Manual Frequency Restoration Reserve. Manually activated by TSO. Full response within 12.5–15 minutes. |
| MIP | Mixed-Integer Program. LP with some integer/binary variables. Harder to solve (NP-hard) but handles discrete decisions. |
| Objective function | The single number the optimizer maximizes or minimizes. For batteries: typically revenue minus degradation cost. |
| Parameter | A given input to the optimization (price, capacity, efficiency). Not chosen by the optimizer. |
| Pay-as-bid | Pricing mechanism where each participant pays/receives their bid price. Used in intraday continuous. |
| Price-taker | Assumption that your trades don't affect market price. Valid for small assets. Simplifies optimization. |
| Pyomo | Python optimization modeling library. Translates mathematical models into solver-readable format. |
| Robust optimization | Maximizes worst-case performance across scenarios. Conservative but protected against bad outcomes. |
| Rolling horizon | Reoptimizing as time progresses — shrinking the horizon and updating inputs continuously. |
| SoC | State of Charge. The energy currently stored in the battery (MWh or %). |
| SoH | State of Health. Remaining capacity as percentage of original nameplate capacity. |
| Stochastic optimization | Optimizing expected value across multiple scenarios with assigned probabilities. |
| Terminal value | Value assigned to energy remaining at end of optimization horizon. Prevents myopic emptying of battery. |
| TSO | Transmission System Operator. Manages the high-voltage grid and procures balancing services (e.g., TenneT, 50Hertz, Amprion, TransnetBW in Germany). |
| η (eta) | Round-trip efficiency. Fraction of energy recovered after a full charge-discharge cycle. Typical: 0.85–0.92 for Li-ion. |
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