Impacts of Battery Degradation Modelling on the Battery Controller Design for Grid Arbitrage

Battery energy storage systems (BESS) have been widely used in grid services. This paper focuses on BESS's participations in grid price arbitrage with considerations of three battery life models that account different factors for battery degradation. The BESS is optimized for maximizing the lifetime value using dynamic programming algorithms. Four cases are studied: case 1 - no battery degradation accounted; case 2 - an empirical battery degradation model using charge-discharge rate (Crate); case 3 - a semi-empirical model using Crate and the cell temperature; and case 4 - a new model that considers the influence of the battery's state of energy, Crate, and current state of health (SOH) on the battery aging rate. Taking the results of case 1 as a comparison benchmark, the battery SOH and power fluctuations of cases 2, 3, and 4 are much smoother, and the number of charge and discharge cycles during operation is reduced by 51.14%, 15.07%, and 66.23% respectively. In case 2, 3, and 4, after one year of continuous operation, the battery SOH decreases from 0.95 to 0.898, 0.89, and 0.9, respectively, leading to varied battery profits. These insights indicate the importance of selecting an appropriate battery degradation modelling in the controller design for BESS applications.