Participation of Battery Energy Storage Technologies in Co-Optimized Energy and Reserve Markets

Improvement in performance and efficiency of Battery Energy Storage Systems (BESS) over a past few years has resulted in their deployment in ancillary service markets as a key resource. The primary constituent of BESS's operation cost is cycle ageing cost; thus, the battery degradation cost must be considered in the market-clearing formulation. As per the recent Federal Electricity Regulatory Commission Order 841, system operators are required to facilitate the participation of BESS in co-optimized energy and ancillary service markets by including their physical and operational characteristics. Various battery technologies available in the market vary in operational and degradation characteristics; therefore the different market deployment price. This work proposes a simplified mathematical model for each of the BESS's degradation cost function based on depth of discharge for its participation in co-optimized energy and reserve markets. A case study is performed on the modified IEEE 30-bus system that compares the operational and degradation cost of different battery technologies, and thus their participation in energy arbitrage and reserve market.