  Storage is expected to be a critical source of firming in low-carbon grids. A
common concern raised from ex-post assessments is that storage resources can
fail to respond to strong price signals during times of scarcity. While
commonly attributed to forecast error or failures in operations, we posit that
this behavior can be explained from the perspective of risk-averse scheduling.
Using a stochastic self-scheduling framework and real-world data harvested from
the Australian National Electricity Market, we demonstrate that risk-averse
storage resources tend to have a myopic operational perspective, that is, they
typically engage in near-term price arbitrage and chase only few extreme price
spikes and troughs, thus remaining idle in several time periods with markedly
high and low prices. This has important policy implications given the
non-transparency of unit risk aversion and apparent risk in intervention
decision-making.
