Optimal microgrid operation considering battery degradation using stochastic dual dynamic programming

Intermittent energy sources demand temporal storages to balance generation and load, and batteries stand out as an alternative. However, the lifetime is limited, and cycling depth affects the battery degradation rate. Current stochastic multi-stage methods lack proper representation of battery degradation. This paper proposes a stochastic multi-stage model for optimizing battery operation in a microgrid considering battery degradation with a piece-wise linear cost function with uncertain wind power production and load. The model is solved using Stochastic Dual Dynamic Programming (SDDP) and is demonstrated on a 4-bus test case with limited import and export capacity to illustrate the battery degradation cost's impacts on the battery cycling strategy. The results show that the importance of a stochastic method is more pronounced when battery degradation is modelled.