Optimal Whole-Life-Cycle Planning of Battery Energy Storage for Multi-Functional Services in Power Systems

One battery energy storage system (BESS) can provide multiple services to support electrical grid. However, the investment return, technical performance and lifetime degradation differ widely among different services. This paper proposes a novel method for the whole-life-cycle planning of BESS for providing multiple functional services in power systems. The proposed model aims to balance between extending BESS life duration and maximizing its overall revenue by strategically allocates battery capacity for each application over its whole life cycle. Specifically, BESS are initially used in ancillary service market for frequency regulation service; after certain lifetime degradation, the used batteries are transferred in energy arbitrage market for load shifting service. BESS depreciation along with the services is considered to accurately model the battery degradation effect under different marketing rules. The proposed method is tested on a modified IEEE 33-bus radial distribution system. Numerical results demonstrate that the proposed method can achieve higher economic benefits and longer life span than a single application service.