User-side Optimal Battery Storage Configuration Considering the Costs of Degradation

With the expanding capacity of user-side energy storage systems and the introduction of the “14th Five-Year Plan” new energy storage development strategy, battery energy storage systems (BESS) have gained widespread use among consumers. This paper explores the maximum benefit of user-side BESS, and establishes a mixed integer optimization model of BESS operation strategy with the optimization goal of maximum user comprehensive income. With the installation of BESS on the user side, the total cost primarily comprises the initial investment and the operational battery loss cost, and the complex battery degradation cost function is constructed into a simple linearized function without losing too much accuracy. In terms of revenue, it manifests as decreased electricity expenses due to peak cutting and valley filling, along with reductions in monthly maximum demand and improved demand response. The proposed model is solved by GUROBI solver. The simulation results demonstrate that optimizing the BESS operation strategy leads to a reduction in overall power consumption costs. If the capacity of BESS access users is properly selected, the benefits can cover the cost, which is economically feasible.