Impact of Battery Degradation on Market Participation of Utility-Scale Batteries: Case Studies

Abstract

The recent decrease in battery manufacturing costs stimulates the market participation of utility-scale battery energy storage systems (BESSs). However, battery degradation remains a major concern for BESS owners while determining their BESS investment and operation strategies. This paper studies the impact of battery degradation on BESS's operation and revenue/cost in real-time energy, reserve, and pay as performance regulation markets. Comparative case studies are performed on two optimization frameworks which model the participation of a price-maker BESS in energy and ancillary services markets with and without considering battery degradation cost. A synthetic test system built upon real-world data is adopted in the case studies. Analyses reveal that degradation cost plays an important role in the scheduling of BESSs and should not be neglected. Several potential enhancements to the optimization frameworks are discussed based on the performed analyses.

Incremental Degradation Estimation Method for Online Assessment of Battery Operation Cost

“…This can help to reduce the extra degradation, which is normally result of battery operation without considered cost of degradation. For example, certain operating conditions cause accumulation of battery degradation, but result with minor benefits for the users (e.g., performance, service provision, economic) when battery is utilized [7]. Such operating conditions can be avoided if battery operation is decided as the optimum of the benefits it provides and the degradation it causes.…”

Bidding a Battery on Electricity Markets and Minimizing Battery Aging Costs: A Reinforcement Learning Approach

“…Other authors report increased financial benefits from bidding on more than one market. Such market combinations include frequency regulation and energy arbitrage [33], frequency regulation and real-time markets [34], energy arbitrage and reserve markets [35], energy arbitrage and spinning reserves [36], energy arbitrage and demand response [37] and demand response and nodal markets [38]. It is notable that some authors specify their targeted market in general terms, such as energy arbitrage, while others identify a more specific market, such as real-time electricity markets.…”