  An increasing number of retail energy markets show price fluctuations,
providing users with the opportunity to buy energy at lower than average
prices. We propose to temporarily store this inexpensive energy in a battery,
and use it to satisfy demand when energy prices are high, thus allowing users
to exploit the price variations without having to shift their demand to the
low-price periods. We study the battery control policy that yields the best
performance, i.e., minimizes the total discounted costs. The optimal policy is
shown to have a threshold structure, and we derive these thresholds in a few
special cases. The cost savings obtained from energy storage are demonstrated
through extensive numerical experiments, and we offer various directions for
future research.
