Electricity storage systems (ESS) for bulk energy storage are principally used for load levelling purposes or for relieving the intermittency of renewables. Another use is electricity arbitrage through the rule of 'buy low, sell high'. This operation tracks the market-clearing price (MCP) profiles and produces profit by exploiting the differences between peak and off-peak prices. The profits made in this way depend on technology characteristics and the market competition level. We investigate the influence of demand-side management (DSM) on ESS profitability when the only income is from provision of electricity arbitrage services, by optimizing the time allocation of the charge and discharge operations. Two scenarios of DSM in the market have been selected for two management periods (MP): I day and 3 days. The longer MP is examined in order to investigate the potential for higher economic value when energy transfer to the next day is permitted. The key finding is that a very small load shifting from peaks to off-peaks, due to DSM, significantly affects the ESS profit. The significant profit losses the ESS showed are a result of the high capital costs and the small difference of the peak and off-peak electricity prices in the Greek market. Therefore, under the assumptions we have made for this research, any attempt to use ESS in 'buy low. sell high' operation is not profitable. Copyright (C) 2008 John Wiley & Sons, Ltd.