Energy Arbitrage is simply purchasing more electricity during off-peak periods, storing that electricity, and discharging it during peak periods.

With a varying tariff structure, electricity prices fluctuate throughout the day. At some time periods (morning 8am, evening 6pm), they are high, and at other times are low (afternoon 2pm, midnight).

Utilities and power producers can, with the help of software, purchase electricity when prices are low, store it, and sell it back when prices are high.