Impact of battery degradation on energy arbitrage revenue of grid-level energy storage

Wankmüller, Florian; Thimmapuram, Prakash R.; Gallagher, Kevin G.; Botterud, Audun

doi:10.1016/j.est.2016.12.004

Title: Impact of battery degradation on energy arbitrage revenue of grid-level energy storage

Journal Article · Thu Jan 19 00:00:00 EST 2017 · Journal of Energy Storage

DOI:https://doi.org/10.1016/j.est.2016.12.004· OSTI ID:1393934

Wankmüller, Florian ^[1]; Thimmapuram, Prakash R. ^[2]; Gallagher, Kevin G. ^[2]; Botterud, Audun ^[3]

Karlsruhe Institute of Technology (Germany); Argonne National Lab. (ANL), Argonne, IL (United States)
Argonne National Lab. (ANL), Argonne, IL (United States)
Argonne National Lab. (ANL), Argonne, IL (United States); Massachusetts Inst. of Technology (MIT), Cambridge, MA (United States)

This study investigates the representation of battery degradation in grid level energy storage applications. In particular, we focus on energy arbitrage, as this is a potential future large-scale application of energy storage and there is limited existing research combining the modelling of battery degradation and energy storage arbitrage. We implement two different representations of battery degradation within an energy arbitrage model, and show that degradation has a strong impact on battery energy storage system (BESS) profitability. In a case study using historical electricity market prices from the MISO electricity market in the United States, we find that the achievable net present value (at an interest rate of 10%) for a battery system with a C-rate of 1C dropped from 358 /kWh in the case considering no degradation to 194-314 /kWh depending on the battery degradation model and assumptions for end of life (EOL) criteria. This corresponds to a reduction in revenue due to degradation in the 12-46% range.Furthermore, we find that reducing the cycling of the bat-tery via introducing a penalty cost in the objective function of the energy arbitrage optimization model can improve the profitability over the life of the BESS.

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Research Organization:: Argonne National Laboratory (ANL), Argonne, IL (United States)

Sponsoring Organization:: Argonne National Laboratory, Laboratory Directed Research and Development (LDRD); USDOE

Grant/Contract Number:: AC02-06CH11357; DEAC02-06CH11357

OSTI ID:: 1393934

Alternate ID(s):: OSTI ID: 1413046

Journal Information:: Journal of Energy Storage, Vol. 10, Issue C; ISSN 2352-152X

Publisher:: ElsevierCopyright Statement

Country of Publication:: United States

Language:: English

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Cited by: 67 works

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Lithium-Ion Battery Storage for the Grid—A Review of Stationary Battery Storage System Design Tailored for Applications in Modern Power Grids Hesse, Holger; Schimpe, Michael; Kucevic, Daniel Energies, Vol. 10, Issue 12 https://doi.org/10.3390/en10122107	journal	December 2017
Optimal Operation of Battery Storage for a Subscribed Capacity-Based Power Tariff Prosumer—A Norwegian Case Study Berglund, Frida; Zaferanlouei, Salman; Korpås, Magnus Energies, Vol. 12, Issue 23 https://doi.org/10.3390/en12234450	journal	November 2019
Lifetime Expectancy of Li-Ion Batteries used for Residential Solar Storage Beltran, Hector; Ayuso, Pablo; Pérez, Emilio Energies, Vol. 13, Issue 3 https://doi.org/10.3390/en13030568	journal	January 2020
Assessment of Battery Storage Technologies for a Turkish Power Network Kocer, Mustafa Cagatay; Cengiz, Ceyhun; Gezer, Mehmet Sustainability, Vol. 11, Issue 13 https://doi.org/10.3390/su11133669	journal	July 2019
The Role of Domestic Integrated Battery Energy Storage Systems for Electricity Network Performance Enhancement Jankowiak, Corentin; Zacharopoulos, Aggelos; Brandoni, Caterina Energies, Vol. 12, Issue 20 https://doi.org/10.3390/en12203954	journal	October 2019

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