Quote Originally Posted by mfd View Post
The arbitrage is doing the opposite of surge pricing. They will bid when supply is cheap (making it a little pricier) and offer when supply is pricey (making it a little cheaper). Acts as a smoothing function on price and supply.

Means that those really expensive bids from, say, a factory with contacted supply deciding to close for a shift and selling back the power, are no longer needed.
Interesting. Thanks for the reply.

A classic arbitrage will take advantage of pricing differences, geographic or time-based for example, in order to purchase low and sell at market. The hog is just wondering if there are periods of significant demand the pricing benefit for consumers (i.e. lower prices) are substantially dictated by competition between those able to remove duration/timing discrepancies. If there is limited competition from these players, the improvement in market efficiency will also be limited, no?